What The Accommodation Industry Can Learn From The Airline Industry

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Lessons Hotels Airlines
80 DAYS Benchmark
80 DAYS Benchmark

The airline and accommodation industry have a lot in common. Both their customers book in advance, the markets are highly saturated with competitors, both use online booking systems and distribution channels, and manage their occupancy. So what can the accommodation industry learn from the airline industry? A lot, in particular rate setting and flexing, and leveraging a multi-skilled workforce. We explain them below:

Flex your rates

Flexing rates is not about having 100% occupancy, it’s about ensuring your average rate is as high as guests will pay. Demand is the biggest factor that affects rates. Increased demand allows you to sell rooms at a higher rate. This is because as occupancy increases, supply (rooms available) decreases. When this happens, lower rates can be removed from sale and only the higher rates are available.

Selling all rooms at the same rate rarely produces good occupancy or an optimal average rate.

Consumers know that airline rates fluctuate based on different seasons, holidays, and even what day of the week you choose to buy your flights. Use the same kind of knowledge about the tourism industry to flex your accommodation rates. It doesn’t have to be as complex as the airline industry’s method, but you can flex your rates for seasonal and holiday periods.

Leverage a multi-skilled workforce

The airline industry leverages technology to help move their staff around as needed. The person that checked you into your flight may also be at the gate, helping to board you. This is to facilitate a more efficient service. The accommodation industry can follow this practice. Move staff out of rigidly defined roles, and train them in multiple areas. This will help them be on hand when certain areas get busy. A front-desk staff can also help in the restaurant when it’s busy, even if it’s just in a hosting capacity. Leverage technology to help communicate any staffing changes. These will also make staff roles multi-dimensional and more dynamic.

Loyalty

Airlines know how to capitalise on customer loyalty. They have loyalty programs in place that award you points based on how far you fly during a trip.They then reward loyal customer’s with upgrades, free flights, lounge access, priority seating and baggage,and other rewards. These incentives can be applied to the accommodation industry too. You can reward returning guests through providing free room upgrades, or by providing a free breakfast or beverage, or affording them access to amenities that would usually cost extra. This is an easy way to grow a returning customer base.

Improve revenue, staff retention, and guest loyalty

Flexing your rates, and setting them based on the market will help you improve your revenue management. Training a multi-skilled workforce not only helps with efficiency, but also productivity. Staff will feel challenged with the variety of their role, and this will ultimately ensure a seamless customer experience. Finally, being able to reward customers for returning to your accommodation will go a long way in developing returning guests. Preno has a view-option for you to easily identify a returning guest so you can welcome them back every time.

  • Mark Cvetkovski

    Great article! How do you think flex rates affect the way customers will perceive your business, especially if you run a supposedly more affordable place like a BnB?

    • PrenoHQ

      Hey Mark, thanks for your comment. Rate flexing won’t have a negative impact on how your business is perceived, especially when done right. While for hoteliers, it is about maximizing yield, from the guest perspective, it’s about making it accessible for them. When rate flexing, high season doesn’t always mean expensive, sometimes it means lowering your rate to optimize yield. Which means a cheaper rate for guests during ‘high season’.