Timeless Marketing and Revenue Management Principles

What Every Hotel Needs to Know About Managing in Uncertainty

A High Tide Floats All Boats

One valuable lesson that we’ve learned from a healthy hospitality market is that a high tide floats all boats. When consumer demand is strong, it’s easy to hide poor revenue management strategy or bad distribution decisions because the market will carry you.

But as soon as the high tide recedes, or there’s a market blip like we recently experienced, the sins of bad marketing strategy are exposed and hotels without a strong foundation for decision-making begin to suffer. They start to lose occupancy points and erode RevPAR. It’s not hard to guess what’s next.

Rate cuts. Hotels that start the race to the rate floor by following their competitors every price drop will hurt the market in the long run.

Timeless Principles to Follow

Hoteliers that hold strong and maintain competitive advantage through economic peaks and valleys know and follow three basic principles of competitive strategy:

1.  Stay close to your competition, but don’t be so fast to follow them.

When there is a market change, revenue managers are known to panic. Since they don’t know how bad it’s going to be or how long it’s going to last – they often choose to sacrifice rate to maintain occupancy. Many times the reality is that a lower rate is not justified; it is self-imposed in anticipation of lower performance. And this anticipation sets in motion a rate cutting snowball effect that can take months or even longer to recover from.

To avoid rushing to cut rate, hoteliers need to not only watch competitors but also listen to the market and their consumers. This is where forward-looking consumer demand can provide the right indicators to guide rate strategy. Be able to answer these questions before you make decision that will impact RevPAR and profitability in the long run:

  • How does unbooked consumer demand for this month and next compare to the previous month?
  • Is my rate variance to my compset for future arrival dates significantly different than the past month, and do I see impact on demand as a result?
  • Are my direct bookings falling compared to OTA share as more travelers are booking on third parties?

2.  Make decisions based on forward-looking intelligence not “gut feel” or historic data.

In a changing economic environment, you have to make decisions differently, more proactively. Tomorrow is not going to be the same as yesterday, so you can’t use yesterday’s data to make decisions for the tomorrow.

Consumer travel intent for your market provides a good indication of consumer confidence and future demand. The assumptions behind that historic information are by definition out of date, especially in an environment where consumers are always connected and have real-time choices of where to stay and what to pay every day. Forward-looking data gives hotels the following advantages:

  • Shows travel intent peaks and valleys for future arrival dates, based on specific hotel rates
  • Know the impact of rate changes on future consumer demand
  • See when revenue management or additional marketing is needed to attract greater demand

3.  Know your consumers better than your competitor does.

In every market, in any market – this is the hotelier’s mantra. Knowing your consumer translates converting more guests online. Here are ways hotels can start getting a closer relationship with consumers, regardless of market conditions:

  • Understand the travel consumer and their shopping behavior
  • Know how consumers are searching and booking you on travel websites compared to your website – what consumers don’t shop you directly? where can you improve?
  • Personalize content and target hotel internet marketing to the interests and preferences of top personas with intent to travel to your hotel and comp set


Focus on the principles of knowing your competition, understanding the future demand for your market and, of course, being in tune with your clients—keeps your decisions consistent. Hoteliers that keep these basics top of mind – regardless of economic ups and downs – will maximize market opportunity and grow consumer engagement, ultimately ensuring profitability.


To help hoteliers manage through uncertainty, nSight offers the Hotel Online Traffic Report, comparison analytics benchmarking a hotel website’s performance against third-party websites. For a limited time, the report is available in a 60-day free trial. Go here to learn more and to sign up.