How to Increase Hotel Revenue in Low Season?

The low season for hotels is the opposite of the peak season, meaning travelers are searching less for accommodation. The demand is quite low, and hoteliers lower their room rates to attract travelers so that they can increase their occupancy level.  

There are various factors that are responsible for a hotel's low season such as whether it's a weekend or weekday, location of the hotel, traveler preferences, climate, or temperature of the area.

Weather conditions are one of those.  

Consider a scenario where your hotel is in an area that experiences a few months of dryness, excessive heat, or sizzling rain. Would you expect travelers to prefer visiting your place? No, they wouldn't. Thus, there will be a reduced number of visitors to your location.

Another factor was during the COVID-19 pandemic when hoteliers had to face a massive drop in occupancy levels as travelers weren't going outside. But they had the urge to travel more.

For hotels in Southeast Asia, the low season can be between May-October. Hotels located on the verge of mountains experience a sudden rise in sales in winter. While this is the opposite for beachside destinations.  

In the offseason, the demand for hotel services is almost less and competition is at par. To maintain occupancy level, hoteliers have no option except to lower their prices to attract the maximum number of guests. 

Such highs and lows affect the hotel's revenue, so it's important for hotel owners to create some strategies to face this low season.  

Also Read - How to Increase Hotel Revenue in Low Season?

What challenges do hotels face during the low season?  

A change in traveler preferences and seasonal fluctuations pushes hoteliers to face the low season. Let's discuss some of the challenges that hoteliers face when they experience low season.  

1. Decrease in occupancy level  

The dynamism in the hospitality landscape and seasonal fluctuations affect the occupancy levels. It occurs because of changes in weather conditions, traveler demand, or the occurrence of any special event.  

Other than that, there will be a smaller number of guests willing to travel because of unfavorable weather conditions. Thus, hoteliers face seasons of lower occupancy and most of their resources are underutilized.

2. Drop in cash flow  

During the off-season, it becomes challenging for hoteliers to increase their cash flow. As they experience low demand, they need to create a balance between managing expenses and cash flow. 

3. Reduced ROI and unstable income  

Off-seasons are months when hotels experience decreased demand and hence result in lower revenue. In such cases, hotel managers lower their room prices to attract more guests which results in lower revenue per available room (RevPAR).  

4. Recruitment cost increases  

During low season, hoteliers face reduced demand and thus decide to reduce the staff. While one of their concerns is to provide quality service to guests, that's possible when they have a bunch of trained staff available.  

But this is also true that they can retain their staff by paying competitive packages. Staff retention results in increased labor costs.  Also Read - Hotel Staff Training Best Practices

6 Best Strategies to Increase Hotel Revenue in Low Season  

No matter how big or small your hotel biz is, every hotelier faces such challenges too. There are always months of highs and lows, so it's better for you to create a strategic plan, adopt marketing gimmicks, and use clever psychology principles to ace your hospitality game.  

Here are the few key strategies that hotel managers adopt to increase their revenue in low season and keep their business profitable -  

1. Focus should be on bringing REPEAT GUESTS  

A hotel becomes profitable not just by acquiring new guests. Rather, repeated and loyal customers make your hotel more successful. One recent study found that the cost of customer acquisition is 5-20 times more expensive than the cost of retaining an existing guest.

If you want your hotel to maximize your revenue during low season, then you should nail the art of bringing REPEAT guests. Even research studies back this statement.  

A study was conducted by Bain & Company, and the findings of the study revealed that hotels that focus on increasing their guest retention rate by 5% experience a sudden increase in profits of 25-95%.  

While many hotels put more effort into creating engaging marketing material to bring new guests, they forget to make their existing guests happy and satisfied.  

But this is a fact that returning guests are likely to spend more on services and prefer to choose you over others. Make sure that your staff treats them well and provides the best possible experience.It's all about how well they build relationships with guests.  

2. Offer loyalty schemes

The other way to increase your hotel revenue during the low season is to run guest loyalty programs. Today guests demand more elite services and premium offers, and loyalty programs are truly a game changer.

Offering benefits such as late checkout, exclusive perks, reward points, and special discounts on room upgrades not only makes your hotel stand out but it enhances the guest experience.

This reduces your customer switching cost and makes your services differentiated.  

3. Partner with local businesses  

Just operating your hotel in isolation won't reap good rewards in the long run, unless you partner with local businesses. By doing such collaboration, both parties can do cross promotions and increase their revenue during low season.  

Moreover, guests crave local experiences, so you can collaborate with them and customize your packages. According to booking.com, 34% of global travelers love connecting with local experiences. They said whether it's a cooking class or wellness retreat, these experiences enhance the guest's stay.  

Such mutual relationships drive more revenue for hotels experiencing low season.  

4. Create enticing offers and discounts  

The other way around is to encourage your guests to spend a longer time at your hotel even during less popular months. You can do this by customizing your packages and offering good deals to them.

Come up with compelling offers such as booking for 3 nights and getting 1 free. The best way is to segment your guests into various categories such as business travelers, leisure travelers, and families and then serve them accordingly.

If you don't offer discounts to guests, you will lose bookings. By creating offers and packages, though you run the risk of decreasing your revenue per available room, ultimately you get more bookings at the end. Thus, resulting in more revenue for your hotel.

5. Invest in e-mail marketing  

E-mail marketing isn't a mere tool for sending tons of emails to guests; rather, it's about building relationships, nurturing the audience, and increasing your revenue.  

Studies suggest that every 1 dollar spent on email marketing gives you a return of $36. Hoteliers too can leverage powerful marketing tools to share special offers and customized packages with guests.

Make sure to keep your subject line short and snappy so that it increases your open rates. Highlight the best things at your hotel such as spa, scheduled yoga sessions, wellness center, and kids center, so that guests are more likely to book a stay at your place.  

By sending regular targeted emails, you constantly add value to a guest's life. Thus, they're more likely to stick with you online.

6. Curate an off-season strategy  

Creating an off-season marketing strategy is another technique for maximizing your hotel's revenue at the time of the off-season. Here, you can lower the prices of your services to attract more guests.

This way, you can convert LOOKERS into BOOKERS.

A successful off-season pricing strategy starts with segmenting travelers based on various categories such as location, demographics, climate, etc.

However, relying on just one factor will not give you fruitful results as you need to fine-tune the pricing strategy by combining other factors such as guest preferences, past booking prices, number of guests, etc.

Wrapping up

You won't sit idle hoping that your hotel revenue will eventually rise. After all, you need actionable strategies to increase your hotel revenue and scale your hospitality business. During the off-season, many hoteliers feel like shutting down their hotel businesses or wanting to wait for peak season.

But you can't wait months to urge travelers to choose your accommodation over others. That's when you would fine-tune the revenue strategy so that you won't be affected by seasonal drops, declining revenue, and zero occupancy.

Although you can't directly control future demand, you can tweak your revenue strategies by adopting the above-mentioned tactics so you can enjoy increased revenue all year round.