Differentiating the prices of your rooms is by far the most relevant step to increase your hotel’s revenue. The price segmentation though is the milestone of any revenue strategy but the question is: how can it work at its best? As we have already said in our article “How to segment the price of your rooms”, analyzing the occupancy rate of your hotel is the necessary condition to create a proper strategy. In other words, you ought to monitor the trend of your registered reservations in a specific time range. Here you will find some advice to analyze the occupancy rate of your property but first let’s understand why it is such an important process.

Why it is important to analyze the occupation of your hotel

The analysis of the trend your hotel’s registered reservations in a given time range allows you to first detect the presence of some cyclic trends in sales. The wider the period taken into account, the more you will be able to trace the trends that will help you understand how your hotel business goes.

In other words, the occupation rate of your facility allows you to:

  • Record the time of the year in which you have more reservations;
  • Find out the critical period where you have more difficulty in selling your rooms.

These data will then enable you to develop a model that can predict the future performance of your hotel sales in order to adjust your future revenue strategy.

How to analyze the occupation rate of your hotel

In order to obtain a forecast model that is really useful in developing a proper price segmentation strategy, you will need to analyze the trend of bookings by considering at least three other factors except the date, namely:

  • The room type;
  • The duration of the stay;
  • The country of origin of the guests.

Let’s analyze them one by one!

1 Room type

Any hotel manager needs to know which type of room leads to more reservations and, above all, how sales are distributed according to the type of room in the different periods of the week and of the year. This analysis is primarily intended to establish the differentiation of rates between standard and superior rooms and to acquire important information about your guests’ habits and behaviors.

The occupancy analysis by room type allows you to identify not only recurring trends, but in some cases also the differences over the previous years or months. For instance, you might notice a loss of interest of your users in a superior room type, perhaps due to a higher price compared to your competitors’ one. In this case, the next step is the price analysis applied by the competition to similar room types in order to adjust your pricing strategy. For this purpose, a rate checker is the best solution to take into account, provided that it allows you to capture the price data of your competitors by comparing them also by room type.

2 Duration of the stay

The analysis of the average duration of the stay and how shorter stays are distributed over the week and / or year compared to long stays provide useful information in order to set your rates. For instance, if you do not manage to receive long-term bookings in a specific time of the year, you might offer targeted discounts to stimulate the demand. Since knowing your competitor’s strategy is also important, you may be able to monitor the price data of your competitors with regard to stays of 3 or 7 nights instead of limiting the analysis to stays of 1 or 2 nights.

3 Country of origin of your guests

The last data any hotel manager needs to consider in order to define their marketing strategies is the origin of the guests and, in particular, how the various origins are distributed in your booking planning over the year. Obviously, this type of information will allow you to develop targeted offers aimed at encouraging foreign guest reservations over the different periods of the year.

By matching the source data with the room type and duration of the stay, you will also be able to find out the buying behaviors of your customers with respect to their geographical location. For instance, you might find that French-speaking guests are more interested in short stays, whereas German customers prefer long ones or vice versa. In the same way, the British might prefer standard rooms whilst Russians choose upper category rooms.