How hotel brands can minimize the cost of guest acquisition

It is not good for your business that you are spending more per guest. So cost-cutting is very important to increase your revenue. Hotel brands should work to minimize the cost of guest acquisition.

Getting high revenue from its business is the wish of every hotelier.  For this either he can increase the prices of hotel rooms or he can minimize the cost. But by increasing the cost you may lose your guests.

If the hotel will increase the price and it goes higher then competitors it will harm the hotel business. The customer does not want to pay extra for the same service.

So, hotels cannot go with this strategy. Now they can work on their cost.  By minimizing their cost of guest acquisition they can earn a desirable profit.

 Hence hotels need to work on their spending on getting a booking. It is very important to know all the costs of acquisition. And find ways to reduce these costs.

Here in this blog, you will find some tips to minimize the cost of guest acquisition in your hotel business.

Recognize what are the costs for hotels

The first step is that the hotel should understand all the costs which it has to bear in getting the booking. Certainly, in guest acquisition cost there are many things that are included.

Hotels have to give a commission to OTAs for hotel bookings. In addition, cost occurs in managing the hotel website also. The hotel should include all the costs that occur in sending emails, taking reservations by using mobile phones also.

The cost of staff is a big part of guest acquisition cost for hotels.  When hotels know clearly about its expense and all the cost, then it can make a better strategy for minimizing them.

It will help hotel owners to manage all those expenses that can be reduced. Notably, you should minimize the cost but not compromise with your hotel services.

Control on channel mangers is important

A hotel does not depend on only one channel manger. It works with many channel managers.  Hotels need to know which channel manager is more profitable for their business.

Hotels should calculate all the costs from the channel managers. And it is important to know which channel manager is only costing high but not more profitable.

Analysis of cost and profit for every channel manager is important. Therefore knowing these data hotels decides on which channel manager they should focus on.  

Hotel owners should focus on those channel managers which are profitable to them. It is not necessary that a channel manager is giving a large number of booking but it is profitable.

 It may cost more and then your revenue will go down.  Therefore, manage all your channel managers and focuses on more effective channel manger.

Direct bookings will reduce the cost of guest acquisition

Hotels have to least spending on getting direct bookings. Because they are not giving any type of commission to any third party. But hotel owners need to know what is the of acquiring a direct booking.

You should plan a direct booking strategy that is profitable for your business. Hence, set your budget so that you can minimize the overall spending in guests’ acquisition.

Offer some extra benefits like complimentary breakfast, discount on spa or F&B services, free wifi, etc to guests who directly book with the hotel.

Focus on your loyal customers

You should reward your regular guests. It will build more close relationships with them. Hence you will have more chances to get them back.

Hotels can provide a discount to loyal customers. But consider that it will not harm your profitability.

Manage your commission with OTAs

OTAs are very important for the hotel business. However, they charge a commission from hotels but they generate business for your hotel. OTAs commission, then, is the cost of acquiring guests in this case.

Hotel only has paid to OTAs when they get confirmed bookings from them.   If there is no booking then there will be no commission for OTA.

Real-time integration with OTAs is very important for your business. It helps in getting more bookings. Because it shows the right occupancy of your hotel inventories. 

But hotels should define the criteria of guests which they want from OTAs. However, getting a corporate guest from OTAs is not beneficial for the hotel business.

Make your presence on Mobile phones

Hotels need to have a mobile-friendly website. The hotel should also work on developing a mobile app. Now people are spending more time on their smartphones. They use this digital device more than a desktop or laptop.

People see any beautiful location on their social media. And make bookings by using their mobile phones.  So, get direct bookings from your customers a mobile app is very important for the hotel business.

Having mobile apps increase the chances of getting more direct bookings.  So, becoming mobile-friendly is very crucial for your business.

New age people are spending more time on their phones. Moreover, having a mobile-friendly website and mobile app will help in getting bookings to the hotel.

Increase the database of customers for minimizing the cost of guest acquisition

Maintaining the database is very important for increasing the customer. It helps make good customer connections. If you maintain a customer database then it will help you to get more deals for your hotel.

It lets you target customers and send promotional offers to them. Hotels can understand customers’ actions, and then make strategies. So possessing a database will make your marketing plan more effective.

Better implementation will help you get more guests in less expense Hence increasing the customer database will decrease the cost of guest acquisition.

Conclusion

In conclusion, it can be said that minimizing the cost of guest acquisition in the hotel business is very essential. So, you can not spend more on getting a customer with you. It does not make any sense.

Spending more per guests will only harm your revenue. Hence find all the costs and work to reduce them.  

Manage your channel manager effectively. Similarly, focus on more profitable channel managers which help you in earning more revenue.

For instance, direct bookings and loyalty programs are very important snd help in getting more bookings at less cost.

If you are searching for software to make your hotel website then consider QloApps. It will launch a beautiful website to manage your hotel.

If you want to know more about Qloapps contact us by QloApps Forum.

Comment your ideas and suggestion regarding minimizing the cost of guest acquisition in hotels.