How to Increase Hotel Occupancy - 12 Effective Strategies

Hotel occupancy is a crucial aspect of any hotel business. Hotels are supposed to be lively places, brimming with satisfied guests, in order to exist as well as thrive in a highly competitive marketplace. Guests make or break the hospitality industry. Thus, in this blog, we give you some very effective yet easily doable strategies to increase hotel occupancy.  

Hotel occupancy rate is the metric that reflects the overall occupancy health of a hotel. Let’s start by learning about this rate.  

What is the hotel occupancy rate?

The hotel occupancy rate is the total number of rooms available divided by the total number of rooms in use. 

One of the main key performance indicators (KPIs) for the hotel revenue management strategy, the hotel occupancy rate helps a hotel determine its seasons or peak periods. This helps in building the most optimal pricing strategy, determining the most suitable times to promote special packages, along with helping with revenue management. 

A recent Statista study showed that the hotel occupancy rates in India were estimated to be 66% in the year 2022.  

Hotel occupancy rate could be calculated by day, week, month, or longer period. The results can then be used for comparisons with other similar local hotels, in order to get an idea of where the hotel stands in the marketplace.  

A hotel’s priority should be to boost hotel demand and increase hotel occupancy rates by offering flawless services, excellent room amenities, and warm hospitality.  

When to use the occupancy rate for accommodation?

There are various ways through which you can use occupancy rate to assess the hotel’s performance -

• An occupancy rate serves as the benchmark for determining the performance of your property during a specific period. It's an exact metric to tell you whether your hotel is profitable. 

A higher occupancy rate indicates that you’re effectively utilizing resources to the optimal level and have pricing strategies in place. This way you can maximize the hotel’s revenue. 

Alternatively, a lower rate indicates that you’re not making an optimalutilization of resources. 

• Historical data gives insights into how well the property performed in the past. This sets the benchmark for them to predict future demand and tweak their prices accordingly. 
• Comparing your occupancy rate against competitors provides a rough picture of where your property stands in terms of occupancy rate. Let's say you figured out that your property has a 60% occupancy rate while your competitor has an 80% occupancy rate, then it means there are performance gaps, and you need to work on that. 

Types of Accommodation Calculations

Here are different types of accommodation calculations - 

• Hotel occupancy rate

This rate determines that number of occupied rooms are divided by the total available rooms on the property.

• Airbnb occupancy rate

You can calculate the Airbnb occupancy rate by finding how long the property is booked and how many days it’s available. 

Airbnb occupancy rate = Booked nights/available nights *100 

• Apartment rental occupancy rate

The apartment rental occupancy rate is calculated by the total number of apartments available divided by the average length of stay.

Factors affecting occupancy rate

Here are several factors that affect the occupancy rate of accommodations - 

1. Seasonality

Seasonal factors affect the occupancy rate of accommodations. There might be some seasons where the occupancy rate of your property is high. For other reasons, you might experience a sudden drop in occupancy rates. 

2. Marketing activities

Running marketing campaigns and investing in digital advertising makes your property stand out. It increases your online visibility and as a result, it drives higher occupancy rates. 

3. Local events or festivals

If there’s a business meeting planned near your accommodation or a festive season is coming, it’ll naturally attract more visitors to your site.

4. Economic forces

Economic factors such as recession or inflation affect your occupancy rate.  

5. Competitor prices

When you compare your occupancy rate with competitors, you can figure out your areas of improvement.

How do you calculate the annual occupancy rate?

You can calculate the annual occupancy rate for the hotel using the below-mentioned formula - 

Total number of occupied rooms/total no of available rooms *100 

Let us understand this with an example - 

Your accommodation has 80,000 rooms. Out of which, 50,000 rooms are booked for one year. 

Now the annual occupancy rate = 50,000/80,000 *100 = 63% 

How to calculate the change in occupancy rate?

You can calculate the change in occupancy rate only when you have available figures for period 1 and period 2. 

You can use the same formula to find the change in occupancy rate - 

(occupied rooms time 2 period – occupied rooms time 1 period)/ occupied room time 1 *100%

Strategies to increase hotel occupancy

Hotel occupancy decides the present as well as the future of the hotel business to a large extent. It has a huge impact on hotel finances/revenue and thus, administration and operations.  

A hotel thus needs to employ strategies most suitable to its demography and target audience, to attract guests and keep the property brimming with human energy. 

Let’s now look at 12 strategies that would work wonders to increase hotel occupancy rates and revenue:  

1. Dynamic pricing 

Dynamic pricing is setting up room prices as per the market demand. The concept is based on basic economics that states that prices and supply should be adjusted as per the demand. Hotels thus must adjust to the changing market demand and conditions and set their occupancy forecasts and hotel pricing strategies accordingly.  

And hotels do that by employing dynamic pricing strategies. This helps them to maintain occupancy during low seasons, keep the house full during medium/shoulder periods as well as make the most of peak periods. This is the seasonal pricing concept of the dynamic pricing strategy.  

In simpler terms, it means to raise room rates when demand exceeds supply to maximize average daily rate (ADR) and decreased in case of low demand to increase hotel occupancy rates. 

CreateWith, Hotel in a Box, a revolutionary product by BOTSHOT, helps hotels to take direct bookings with a customized website, manage multiple channels such as OTAs, etc., and exercise dynamic pricing, among other things, through one single platform.  

2. Incentivize guests with specials, and packages  

Specials and packages attract guests and provide them with added value for the services, for the same price. A better alternative to discounts, specials, and packages make you stand out and give an incentive to your guests to choose you over others.  

This could be done by combining services and amenities. Offer restaurant services poolside, or perhaps along with massages or other spa services. Curate special packages according to the seasons and type of guest for optimal results.  

3. Cross-sell 

Another way of ensuring that your hotel doesn’t remain vacant or people-less for long is to practice the marketing technique called cross-selling. It refers to inviting potential guests/guests to buy related or complementary services. 

These services also act as an incentive for guests to choose you over your competitors. You can further upsell with some additional services like herbal massages, local food tours, etc.  

A marketing product by BOTSHOT, eMark-IT, is a 360 degrees marketing tool that helps hotels to cross-sell services to the targeted groups efficiently by creating personalized campaigns at just a click.  

4. Work on perfecting guest services and staff training 

Guest service is the most important part of the hospitality business and thus should be top-notch. Hotels with the best guest service are always at the top. People pay for the warm and impeccable services.  

A hotel thus must ensure that guests are treated warmly and that their requests are addressed on a priority basis. This is only possible with good staff training. A well-trained and coordinated staff could connect with the guests and offer first-class services with warm hospitality. It is a long-term investment. They are the leaders and managers of tomorrow, thus their training today matters a lot.  

Thus, investments in training sessions and guest service programs come with a lot of benefits for the hotel.  

5. Offer loyalty program discounts 

One of the most effective marketing techniques, loyalty program discount help hotels to build a guest relationship for a longer time.  

Loyalty program discounts allow hotels to enhance guest retention, thereby increasing hotel occupancy rates. With discounts on booking rates online, a hotel can incentivize guests to stay a little longer than planned and revisit.  

A hotel can also offer these discounts to guests on their celebratory days such as birthdays and anniversaries. This would make your guests feel cherished and would ultimately get you more business, new and repeat, thus increasing hotel occupancy.  

6. Collaborate with a revenue manager 

Skilled revenue managers are assets for hotels. Using their work experience and skills and automated systems, these managers can leverage hotel and guest data and the gathered business intelligence. This data includes hotel performance across market segments, channels, and properties. This helps them to understand guest behavior, patterns, taste, and preferences.  

Marketing strategies are built and optimized with the help of this analysis and hence, occupancy rates are targeted through these strategies. Furthermore, revenue managers use historical hotel data to predict future demand and suggest strategies to enhance engagement and revenue.  

7. Prioritize repeat business 

Repeat guests matter a lot to hotels. They give present assurance and future hope. And thus, they are important.  

Guests who have experienced the hospitality of your hotel and choose to live it again and gain are easier to market than acquiring new guests. This is the reason hotels should focus on such guests, give them flawless service, communicate targeted marketing campaigns, and ensure repeat business.  

Giving guests a reason to revisit is of paramount importance for this strategy to work.  

8. Updated hotel amenities  

Hotel amenities should be aligned with the changing times and their needs. Thus, a hotel should ensure that it is offering additional in-demand amenities to all its valued guests. Further, it should determine what amenities are more accepted by the guests and add more to the sales and marketing campaigns. Additionally, the hotel also needs to identify which ones need more push, through special packages and offers.  

Intently hear guests in reviews and feedback and add and subtract amenities accordingly. This widens the scope of hotel guests by adding more services, and amenities and thus, attracting more categories of guests.  

9. Online reputation management 

Online reputation management is another very crucial aspect of any business, especially a customer-centric business like that of a hotel.  

Online reviews, search engine results, social media posts, local press, etc., influence the decisions of potential guests a great deal. Acknowledgment of both positive and negative reviews, engagement on social media accounts, etc., are some important online reputation management practices that a hotel should carry out regularly. There should not be any tardiness related to these tasks.  

10. Keep your property lit up with events 

Events are a great way to attract crowds and revenue, especially during low seasons. However, they should be done as per the hotel’s target groups, and marketing campaigns undertaken to reach those groups. For example, if you are marketing for youngsters/youth for weekend travel, you can hold an event where a motivational speaker speaks about life and the important decisions of the moment, etc.  

Additionally, events also offer hotels a chance to upsell services or hotel amenities such as rooms, restaurant services, spas, wellness, etc. Partnerships with local organizers or event sponsors further help a hotel to set up promotions that would lead to an increase in bookings with discounts for guests attending or participating in the event.  

Events provide effective marketing opportunities as well as increase hotel occupancy in low seasons as well.  

11. Offer subscription models to digital nomads 

Digital nomads or the bliesure travelers are the new norm post-pandemic. Furthermore, cities and hotels are brimming again with the usual business travelers. Therefore, catering to these business travelers can help a hotel shoot up its occupancy rates in no time.  

Hotels can offer hotel subscription models to digital nomads and business travelers. This would help them lock in fixed money every month/ half-yearly/yearly and have a list of regulars. This also helps in the formation of pricing strategies and revenue management.  

These subscription models could target different groups of travelers and guests, a hotel thus needs to study its guest base and type and offer the most suitable one, forging long-term relationships with its guests. This in turn would ensure fixed hotel occupancy for the hotel and in the long run would also, increase hotel occupancy.  

12. Partner with suitable brands 

Another quick and effective way to increase hotel occupancy is to collaborate and create strong relationships with other, suitable brands that are in line with the hotel's vision and image.  

A hotel can begin by figuring out the brands that might benefit from co-marketing with it. Many other hospitality industry businesses like airlines, travel agencies, tour, and travel operators, etc., can refer your name to its guest and customers, in exchange for the pre-decided fees.  

Or a hotel can enhance its package deals, including flight tickets and tour operators, among other add-ons, and offer everything to the guest on one platform. This might require the hotel to tie in with these businesses and curate upselling packages that would benefit both parties.  

FAQs:   

1. What factors can impact hotel occupancy?  

Many factors can influence a hotel’s occupancy. Some of these factors are: 

• Room rates,  
• Guest experience,  
• Hotel’s online reputation,  
• Room service, amenities and cleanliness and,  
• The quality and availability of hotel facilities 

2. How do you attract guests to your hotel?  

Some ways to attract guests to your hotel are:  

• Engage with your guest pre-arrival, during and post-arrival 
• Allow them to skip reception queues through contactless check-in and check-out 
• Greet guests warmly upon arrival 
• Offer excellent room services and amenities 
• Ask for guest feedback post-stay and constantly better your services 
• Practice dynamic pricing 
• Offer subscription models 
• Send marketing campaigns to the targeted groups post-stay through Email and WhatsApp marketing
• Have an online presence through a website, OTAs, and social media