There is little doubt that making a buck in the hotel industry is challenging. Expenses continue their marginal march upward, especially pertaining to labor expense, while shifting guest expectations and other operating trends are making it more difficult for hoteliers to achieve optimal profitability.
But it’s not unachievable; in fact, it’s attainable if the right strategies are employed at the hotel level to maximize revenue and exact flow-through.
A webinar, “Mastering Total Profitability in Hotels,” hosted by HOTELS Magazine examined those tactics with three leaders from different segments in the hospitality space, each sharing actionable insights for optimizing revenue, managing expenses and leveraging data.
Here are six themes discussed in the webinar.
1. Data Consolidation
Dana Cariss, SVP of revenue optimization for management company CoralTree Hospitality, highlighted the importance of integrating diverse data streams to create a holistic view of operations. “It all starts with data,” Cariss said, a nod to the famous Peter Drucker counsel: “What gets measured gets managed.” CoralTree consolidates revenue data from property management systems, sales and catering, point-of-sale systems and even golf and spa departments, providing a unified view, which Cariss said enables better decision-making and more personalized guest experiences.
2. Embrace Data-Driven Decision Making
Sudharshan Chary, manager of the resorts division at Otelier, emphasized the need for a mindset shift. “You can have the best data and dashboards, but without a data-driven culture, it’s just numbers on a screen,” Chary said. He stressed the importance of empowering department heads to embrace analytics and make proactive decisions based on trends, forecasts, and key metrics.
3. Labor Optimization
Labor costs remain the largest expense for most hotels. Chary suggested using time clock data alongside payroll metrics to track regular, overtime, and double-time hours by department. “With real-time labor data, department heads can monitor performance daily and adjust staffing to avoid costly overruns,” he said.
Yohannes Semere, corporate director of revenue strategy at Peregrine Hospitality (formerly KSL Resorts), added that accurate forecasting plays a key role. “We aim for less than 3% variance in our 90-day forecasts. This precision allows us to align labor needs with anticipated demand,” he said.
One of Peregrine’s principles is to establish core department disciplines that guide process. It allows the GM, a generalist, for example, to not get into the weeds of all departments but understand enough so he or she has a sense of the day-to-day happenings.
4. Revenue Management Beyond Rooms
While room revenue remains central, ancillary revenues, such as F&B, golf, spa and retail, are increasingly significant. Chary pointed to a Florida golf resort where package deals boosted Total Revenue Per Available Room (TrevPAR) by $450 over RevPAR. “The key is to understand the interplay between departments and strategically bundle offerings,” he said.
At the same time, though luxury hotels, which by nature have higher expenses than lower chain-scale hotels and more line items, are more challenging to operate and necessitate higher staff counts, they generate higher revenue due to their composition of room rates and F&B costs. “Higher top-line revenue can cover up a lot of mistakes,” Semere said. “The margin of error tends to be a little bit bigger.”
5. Personalized Guest Experiences Drive Profitability
Personalization and unique offerings are key to providing exceptional guest experiences. Cariss underscored the role of CRM systems in capturing guest preferences and transaction history. “Understanding guest tendencies enables targeted marketing and upselling,” he said. For example, guests who previously booked spa services but lack a current reservation can be offered exclusive spa packages during their stay.
Semere added that investing in scalable systems ensures seamless data aggregation across diverse platforms, enabling deeper guest insights.
6. The Importance of Forecasting and Channel Management
Both Cariss and Semere stressed the importance of accurate forecasting and channel optimization. Semere’s team achieved a 5% year-over-year increase in direct bookings by improving website content and using guest-centric search strategies. “Revenue professionals must understand their cost of acquisition and prioritize profitable channels,” Cariss said.
To-Go Thoughts
There is no overnight solution toward optimizing property-level revenue. It takes time; it takes a strategy; and it takes measurable data. One way is to invest in technology to centralize and analyze data across all revenue streams, where a single source of truth empowers teams to make informed, real-time decisions. Beyond investing in business intelligence tools, focus on training teams to access, interpret and act on data effectively.
And listen: The best advice on how to reduce costs and generate higher revenue oftentimes comes from hotel employees. And learn: Use guest data to craft bespoke experiences that enhance loyalty and encourage incremental spending. Also: Balance OTA and direct bookings strategically. Optimize digital content and leverage loyalty programs to drive direct bookings.
“Business intelligence is a journey,” said Chary. “Start small, build trust in the data and scale as your team’s comfort level grows.” With advancements in artificial intelligence and automation, the opportunities for efficiency and personalization are growing rapidly.
Cariss encouraged hoteliers to take the first step: “It’s overwhelming, but one step at a time—even small changes can lead to big results over time.”