Hotel Business Strategies for 2024 to Boost Revenue

The hotel industry is ever-evolving. For properties to stay profitable, they must adopt new hotel business strategies. However, the landscape transforms every year, making it difficult for hotel businesses. And that’s mostly the case that’s going to be in 2024.  

Meaning, that the accommodation providers will have to think outside of the box to bring in better business in the coming year.

In this blog, I am sharing some of the noteworthy strategies on how to improve your hotel business and keep it profitable in 2024.

Current Landscape of the Hotel Industry

Talking about the current scenario of the hotel industry, it is much better than what it was a couple of years ago. The industry has been scoring a moderate growth number and has great potential to score even more in the future.

According to a report, the hospitality industry in India is estimated to reach USD 29.61 billion by 2028, growing at a CAGR of 4.73% during the forecast period (2023-2028). Meaning more travel and business. But this also means the landscape is constantly evolving and there are certain changes in travelers’ behaviors and preferences.

Safety

The major behavioral change in travelers that we can witness is a safety concern.

As travelers embark on journeys to explore new destinations, the need for a secure and risk-free experience has become increasingly crucial. From the choice of accommodation to transportation modes, they meticulously evaluate the safety measures in place.

The global community’s awareness of potential threats, unforeseen challenges, and health-related concerns has led to a paradigm shift in travel preferences. As a result, hotels are compelled to prioritize and enhance safety protocols, reassuring travelers that their well-being is a top priority.

Millennials and Gen Z

Another thing to notice is that millennials and Gen Z are among the top travelers at present. Millennials and Gen Z have compelled the hospitality industry to evolve, adapt, and innovate. The focus is now on creating memorable, technology-driven, sustainable, and socially connected experiences that resonate with the values and preferences of these influential generations.

Workation

Moreover, these are not the only changes in the landscape.

Recently, we interacted with two leading personalities from the hospitality domain, Pranav Dangi, Founder and CEO at The Hosteller, and Darshan Bora, Sales and Revenue Manager at goSTOPS.

Both of them have shed light on the fact that workation is a trending segment that is going to go a long way.

Sitting at home during a pandemic and working within four walls of the home has hit like a saddening wave to many people, affecting their mental health as well.

People are tired of working from home and it is affecting their efficiency and mental health. Since people are allowed to travel, WFH has converted into Work from Anywhere (WFA).

The above-mentioned points are just to name a few. Various other things are happening in the industry.

So, how can your hotel be ready for all of it? With a new hotel business strategy. And this brings me to my next point.

Top Hotel Business Strategies to Incorporate in 2024

This section is going to be all things hospitality business strategy as I list some of the effective and creative hotel business strategy tips for your hotel.

1. Make smarter distribution decisions

The first and foremost thing to do when you are creating a hospitality business strategy is to relook at all the distribution strategies you have made so far.

You must be investing in various distribution channels. However, do all of them deliver the results that you expect? If they are, well and good. But if they aren’t, then you might want to have a peek and see what can be done.

The best way to go about it is by analyzing cost vs profit across all your distribution channels. Consider calculating the cost-per-acquisition of each channel and determining which ones are faring for you and which ones aren’t.

Just because distribution is important, you cannot afford to invest everywhere. It is important to control costs if you want to navigate the difficult waters.

2. Start monitoring demand for better marketing

Next up, is undoubtedly a creative business strategy for the hotel industry. You have to start monitoring traveler behavior and preferences. As I said above, travel behavior is changing and hotel marketers need to tap into every new demand.

For example, a hill station-based hotel was running marketing campaigns only for adventure enthusiasts. However, lately, workation has become a trend and people are looking for hill stations to spend time working and relaxing.

So, the hotel was quick enough to embrace this trend and tweaked its marketing campaign accordingly. Soon, they could see a good amount of bookings coming in.

It is just like hammering the iron when it’s hot. The quicker you are in monitoring and spotting demand, the better your marketing is going to be.

3. Implement sustainable hotel practices

Climate change is real. Those who think otherwise must be living under the rocks.

To contribute to saving our environment, many industries have stepped in and done their part. And hospitality is no expectation. However, not every hotel is active in adopting sustainable practices.

At present, it is important for hospitality establishments to contribute extensively to minimizing the impact on the environment by reducing the unnecessary use of energy. It can be done by turning to alternative energy, reducing greenhouse gases, and various other practices.

Furthermore, there’s a bitter truth. Many hotels around the world are putting in efforts not exactly to change the course of global warming but to gain traction in the industry. That really shouldn’t be the case.

If you’re planning to be sustainable, go for the earth, not for your business.  

We have a detailed blog on sustainable hotel practices. Do give it a read to learn more about this aspect.

Sustainable hotel practices for being eco-friendly.

4. Conduct market positioning analysis

Another top hotel business strategy that you need to add to your list is analyzing your property and seeing where it stands in the market.

This is where positioning analysis comes into the picture. Also, it should be aligned with the target market’s demand.

In simple words, marketing positioning analysis is the process of determining how your hotel brand is perceived with the needs of the targeted market. When you have this insight, you can better your hotel offering and other aspects to match the changing preferences of the marketplace.

So, if you haven’t done any sort of positioning analysis, it is time to get your hands on it.

5. Perform compset analysis

I am sure you are already aware of the compset analysis.

However, I would still like to put this in the prominent hotel business strategies of 2024 because of the benefits it brings to the table.

There are different competitive hotel business strategies used in the industry, but competitor or compset analysis remains one of the tops.

When you are in the hospitality domain, you can never overlook what your competitors are doing. The better you understand your rivals, the better you can make decisions about your hotel and its operations.

Here’s a blog to help you perform competitor analysis the right way.

Step-by-step guide on performing hotel competition analysis.

6. Incorporate revenue management into your property

Revenue management is a vital element of every hotel’s business strategy. If you aren’t leveraging it, then you are overlooking one of the great hotel growth strategies.

However, there are various misconceptions about revenue management. A significant number of hoteliers think that it is expensive and doesn’t deliver results. But that’s absolutely not the case.

I have talked about revenue management in my blogs a lot of times. And I cannot emphasize enough the role it plays in boosting a hotel’s revenue. Be it a revenue management system or a revenue manager, a hotel must ensure that it has someone who is an expert in making smart pricing decisions.

Moreover, revenue management today is a vast segment, from outsourcing the best revenue management service to deploying AI-powered systems, everything is possible.

If you would like to read about revenue management in-depth, click here to access our archives of blogs on the same.

7. Re-evaluate supplier partnerships

Hotels spend a huge amount on outsourcing several things such as software, housekeeping essentials, and raw materials. However, at times, they end up getting into a loss. It is mostly because of poor product quality or over price.

Also, it is not a small issue. I have seen how it has taken a huge toll on hotels.

What can be done? Re-evaluation is the key.

Look at all supplier partnerships and see if anything is going wrong. This will help you break ties with suppliers that aren’t doing any good to your business and help you fix your pockets.

8. Optimise your direct booking channel

Let me give you a scenario.

Your hotel is listed on all the possible OTAs and seeing all the business you are getting from that, you’re thinking it’s a pretty good deal.

Not just that. You’re so into getting bookings from OTAs that you’re completely overlooking the direct channels.

But wait, did you forget about the commissions you’re paying to those OTAs?

I am not saying you should break ties with them. But what I am trying to state here is that your direct bookings are more profitable. This is when you should step in and start optimizing your direct reservation channels.

The most prominent one is your hotel website.

There is nothing better for any hotel than having an attractive and business-oriented website. What I mean by this is that your hotel website should have a robust booking engine for channeling direct bookings and a better conversion rate.

Apart from that, you can also optimize your social media pages. For example, you can use a ‘book now’ button.

Hence, make sure to opt for your hotel website optimization for better conversion.

9. Re-look at your hotel’s tech stack

What does your hotel technology stack look like?

No, I am not only talking about the internet, intercom, door locks, etc. But I am also weighing more on technologies like:

• Property management system (PMS);
• Mobile app;
• Point of sale (POS) system;
• Channel manager;
• Booking engine;
• Revenue management system;
• Review management system;
• Customer relations management system etc.

These are some of the hotel tech essentials. A property with an arsenal of these technologies is more likely to succeed in this competitive industry.

Furthermore, these systems work in sync with PMS being at the heart of it. Meaning, PMS is the epicenter of all operations, departments, data, and more. And when other systems are connected to it, systems work together seamlessly.

10. Emphasise mobile-friendly services

Hotel reservations on mobile devices have gained tremendous traction in the last couple of years. At present, it is one of the most preferred ways to book accommodations by travelers.

Therefore, hotels must ensure that they have an app to let people book a stay on the go.

Now, in terms of a hotelier, mobile hotel PMS is also on the rise. There are PMS providers who offer mobile PMS as well. Meaning, hoteliers can manage their properties’ each and every operation without even being present on the property.

This is not just me who is preaching about going mobile. People are actually inclined towards businesses that offer some sort of mobile-friendly services.

11. Keep abreast with contactless services

I have said this in my previous blogs and I am saying it again.

Contactless hospitality is here to stay. Hands down!

Ever since COVID happened, people have been inclined towards safety over luxury (if not all, then at least the majority of them). Now, what’s more interesting is that people have built a notion that to make their travel safe, they should take charge of certain things such as checking into a hotel without standing in a queue at the front desk.

And contactless hospitality solutions help with just that.

Guests can choose their room, check-in, avail services, make payments, and even check out, with little to no human contact.

When you have such a solution, you get more time to focus on other aspects of your hotel and make the entire guest journey satisfactory.

12. Identify key hotel risks

People usually don’t talk about it much. And I really don’t understand why. Maybe they think it is common to have risks when you’re running a hotel business.

But in reality, it is a hospitality business strategy that accommodation businesses must know where the water is difficult.

When you’re preparing to welcome 2024, do not forget to identify and analyze all the potential events that may negatively impact your hotel business. Next up, determine the severity of the risk so that you can prioritize your actions accordingly.

13. Focus on employee retention

The hospitality industry is one of the largest employers in the world. But, the employee turnover rate in this industry is also supremely high.

However, despite knowing this fact, the industry is sort of operating in denial and not focusing much on retaining staff.

This should not be the case at any cost. Employees are the brand ambassadors of a hospitality establishment and retaining them is a prominent hotel business strategy to succeed. Their experience working with the hotel speaks volumes.

So, make sure, you as a hotelier are taking every necessary measure to retain your employees. Also, it is not just about the reputation, frequent hiring is an expensive task and might take a serious toll on your business.