Seasonality is a major factor in running a hotel. During the peak season, when an area sees the most tourist activity, filling vacancies and maintaining revenue isn’t too difficult. However, during the low season hoteliers can struggle to find unique ways to attract customers.
Data analytics can be used to identify trends in customer behavior and local activity to inform unique offers and incentives, helping you to increase hotel occupancy in the low season.
What Is the Low Season?
The low season is any period of the year where tourist activity is consistently low. Different hotels will have different low seasons depending on their location. For example, Japanese hotels see peak tourist activity in late March/early April for the cherry blossoms, but tourists usually avoid July and August due to their tropical summer and heavy rains.
Multiple factors can influence when a low season occurs, including the weather, local events, public holidays and economic trends. Overlaying records of such events onto sales data can help to highlight the impact each has on your occupancy rates.
How Can You Increase Your Hotel Occupancy in Low Seasons
Just as data comparisons can help to highlight seasonal trends, they can also help to identify missed opportunities. If you can find the right datasets about customer habits, local business activity and economic trends, it’s possible to produce insights to help boost occupancy rates.
Here are some strategies to increase hotel occupancy in the low season.
Market to Repeat Guests
Repeat guests are one of the most valuable demographics to hoteliers, with data revealing this demographic can add as much as 20% to total room revenue figures. Further research suggests returning customers spend 13%-29% more than new guests, so creating offers tailored to individuals in this group may help to increase occupancy rates in the low season.
Develop a Loyalty Program
You can increase your number of repeat guests by introducing a loyalty program. One study found the number of annual room-nights booked by guests enrolled in loyalty programs increased by nearly 50%, showing the potential for such schemes to boost occupancy rates.
Loyalty programs tailored to the hotel industry may include rewards like free room upgrades for members who book during the low season, a reward almost 40% of guests welcome, or offering members extra loyalty points for low season bookings to incentivize off-peak activity.
Repurpose Underutilized Space
Many hotels have spaces like basements, gardens and function rooms that are only used a few times a year. Occupancy levels and other environmental metrics can be measured using smart sensors to help you identify areas that are underused. Recontextualizing these spaces to host receptions, meetings and unique events can help to boost sales during quiet periods.
Partner With Local Businesses
Businesses in other sectors may have different high and low seasons to your own, so it can be wise to strike up professional relationships. Try hosting unique events in partnership with local restaurants, bakers or even popular artists to give guests a reason to make a booking during the low season, as well as to market your hotel to loyal patrons of other businesses.
Consider Dynamic Pricing
Dynamic pricing allows you to adjust the cost of rooms based on demand, so prices can be reduced during the low season to maximize bookings. Compare competitor prices to your own, and to the spending habits of your target demographic, to highlight reasonable prices.
The introduction of dynamic pricing increased room occupancy by 12% in a recent study of 37 hotels, while also increasing revenue per available room and average daily rate metrics.
9 Hotel Occupancy Metrics To Monitor
Before implementing any new strategies, it’s wise to analyze all available data to help ensure your work is backed by high-quality insights. Below are 9 hotel occupancy metrics to monitor.
Occupancy Rate
The number of rooms occupied compared to those available. Analyzing your occupancy rate will show you exactly when your low season occurs and help you identify trends in booking activity, the results of this analysis can be used to inform effective dynamic pricing strategies.
Average Daily Rate (ADR)
The average rate paid for a room over a specific period, calculated by dividing room revenue by rooms sold. Your ADR can help to optimize and measure the efficacy of loyalty programs by showing you the total projected profit for a room during normal and discounted bookings.
Revenue Per Available Room (RevPAR)
The average revenue generated by a room over a specific period, calculated by multiplying ADR by occupancy rate. Analyzing this metric can help you to finetune low season discounts by showing you the lowest possible price you can assign to a room while still making a profit.
Revenue Per Occupied Room (RevPOR)
The average revenue generated by each occupied room, calculated by dividing total revenue by number of rooms sold. Comparing your RevPOR to the industry standard can help you to evaluate your market position so you can adjust marketing efforts around competitor activity.
Gross Operating Profit per Available Room (GOPPAR)
A snapshot of your hotel’s overall financial health, calculated by dividing total gross operating profit by the total number of rooms available. GOPPAR data can help you reduce operating expenses by identifying services that return minimal profits, enabling you to limit unnecessary spending to free up extra funds earmarked for marketing and loyalty programs.
Market Penetration Index (MPI)
Compares your average occupancy rate to that of your competitors, producing data-backed values that can be used to inform dynamic pricing strategies. MPI data also provides insight into the state of your local market, helping you adjust prices to reflect customer expectations.
Average Length of Stay (ALOS)
The average length of stay for a typical guest. Analysis of this data can be used to identify prospective repeat and loyalty program customers. By highlighting accounts that commonly book extended stays you can tailor discount offers to guests most likely to benefit from them.
Booking Lead Time
The average time between a reservation being made and a guest’s arrival. Looking into booking lead time metrics can highlight peak periods for interaction with your online services, uncovering peak seasons for reservations that might be different to peak seasons for visits, enabling you to ramp up online marketing efforts for low season offers at opportune times.
Cancellation Rate
The average percentage of reservations that end up being canceled. Comparing this data to your advertising and outreach campaigns can help you to analyze the efficacy of marketing strategies, uncovering practices that work and can be used to advertise low season offers.
Use Occupancy Metrics to Enhance Low Season Marketing Efforts
Analyze your occupancy metrics to determine where your hotel is underperforming, then use these insights to inform new low season strategies.
Using data analytics tools like ClicData to centralize key hotel metrics in one dashboard helps you access and act on insights that might otherwise be missed.
How does ClicData work?
ClicData is a cloud-based data analytics and business intelligence (BI) platform that helps users manage, visualize, and analyze data from multiple sources in one centralized dashboard. Here’s how it works:
- Data Connectors: ClicData connects to various data sources, including databases, cloud storage, Excel files, CRMs, ERPs, and APIs. Our platform supports over 250 connectors like Google Analytics, Salesforce, MySQL, and more.
- Data Preparation (ETL): Once data is imported, users can clean, transform, and structure it. ClicData allows for data cleansing, merging, filtering, aggregation, and creating calculated fields, enabling better analysis.
- Dashboard Creation: Users can create interactive dashboards using drag-and-drop features. Visualizations like charts, graphs, tables, and maps are customizable to match specific business needs.
- Automation: Data refreshes and reports can be automated to ensure dashboards display the most up-to-date information. Alerts can also be set up for specific KPIs or performance metrics.
- Collaboration and Sharing: Dashboards can be shared with team members or stakeholders via direct links, scheduled email reports, or embedding them in websites and apps.
If you want to see how ClicData can help monitor your hotel occupancy, let’s meet!