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Going Rogue: Will Deflagging Boost My Sales? [Part 1 of 2]

Posted on Jul 10, 2018 8:08:54 AM

Transitioning from a branded property into an independent requires careful navigation through multiple challenges. When it comes to hotel deflagging and sales, the move can be financially rewarding when handled correctly. If you’re considering hotel deflagging, but you’re concerned about how that decision may impact your revenue, read on for ways to boost sales in your new indie status.

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Repositioning, Rates & Revenue

Increase revenue as an independent by analyzing your market and repositioning your hotel. Then go ahead and raise your rates. Many deflagged indies found that by bumping themselves upmarket, and transforming into lifestyle brands, they were able to increase their rates, which led to a lift in revenue per available room (RevPAR).

OTAs & Occupancy

Revenue managing your newly independent hotel requires a different distribution approach when compared with your previous branded status. Online travel agencies (OTAs) currently capture 39 percent of the US online digital bookings and make up 45 percent of all mobile bookings. Although commissions can run high, when used strategically, OTAs and metasearch websites help keep occupancy high for independent hotels. Carefully consider the cost and reach of each channel. And use analytics to determine which channels your customers prefer so you can focus your efforts there.

Going Direct

But don’t sit back and rely solely on OTAs to help ramp up business. A key source of revenue for indies is direct bookings. These generate the highest revenue because there are no agency commissions or other distribution fees. An effective direct booking strategy includes an intuitive booking engine with enhanced marketing capabilities, and an easy-to-navigate website that promotes conversions. 

Goodbye Loyalty Programs and Hello Referrals

Now that you are no longer required to participate in a brand loyalty program (which are becoming less effective), consider trying something new. A Nielsen survey revealed that 83 percent of global respondents trust personal recommendations most. So, implementing a referral program could be much more lucrative. Reward satisfied guests with a special discount when they refer family and friends to your property, and gain a win-win: repeat and new business.

Social Media Matters

Manage your social media and review sites in order to sustain higher rates and earn better revenues. A study from New York University’s Preston Robert Tisch Center for Hospitality and Tourism found that travelers are almost four times more likely to choose a hotel with higher review scores when prices are the same. 

In the end, when looking at hotel deflagging and sales, each hotel must implement a unique sales strategy that works best with their own target market in their specific destination. And while there are risks and headaches that come with hotel deflagging, if carefully managed, it can lead to a significant boost in sales as well.

Contact us for a free assessment to see whether deflagging may be right for you!

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Topics: Pegasus Solutions, Hotels, Blog, increase hotel sales, deflagging a hotel, hotel deflag

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