• Hotreve Management Founder and Director Aadil Fahim on revenue management in Sri Lanka

Hotel management is a multifaceted discipline that encompasses various aspects of operations, marketing, and revenue generation to ensure the success and profitability of hospitality establishments. From guest services to financial management, effective hotel management requires a blend of strategic thinking, customer-centric approaches, and adaptability to industry trends.

When Sri Lanka’s hospitality industry is considered, hotel management plays a pivotal role in shaping the guest experience and driving economic growth. Against this backdrop, Hotreve Management emerges as a beacon of innovation and expertise, offering tailored solutions to hotels seeking to maximise their revenue potential and enhance their market visibility.

Hotreve Management, a dynamic force in the hospitality industry, derives its name from its core focus: hotel revenue and e-commerce. Founded on the principles of maximising revenue potential while harnessing the power of online commerce, a passion for transforming hotel operations, and a commitment to driving sustainable growth, Hotreve Management stands as a trusted partner for hotels across Sri Lanka.

The Daily Morning sat down with Hotreve Management Founder and Director Aadil Fahim for an insightful conversation into the strategies, inspirations, and challenges shaping the landscape of hotel revenue management in Sri Lanka and beyond.

Following are excerpts from the interview:

What inspired you to set up Hotreve Management? 

Our inception story is rooted in a combination of industry expertise and a passion for transformation. After years in the hospitality sector, it became clear that a unique blend of skills – revenue management, e-commerce expertise, and pricing and distribution acumen – was rarely found in a single individual. This insight ignited a spark – an idea that hotels could benefit from a single, dedicated resource to handle these vital aspects of their business. Thus, Hotreve Management was born in 2018.

Our driving force? It is the desire to fill the gaps and tap into the potential of each property we work with. We’re not just a service provider; we’re a partner, committed to driving our clients toward success.

Can you explain your approach to revenue management for hotels in Sri Lanka? How do you optimise pricing and distribution strategies?

At Hotreve Management, our approach to revenue management for hotels in Sri Lanka is founded on a deep understanding of the customer. We believe in a customer-centric strategy that begins with a comprehensive analysis of the hotel’s product, strengths, weaknesses, and historical data. By delving into customer behaviours and booking patterns, we tailor our approach to suit the unique needs of each property.

Before we set room prices and plan distribution strategies, understanding customer behaviour is key. We leverage historical data and competitor analysis to capitalise on competitors’ weaknesses and convert them into our strengths. This allows our hotels to gain a competitive edge.

In terms of pricing strategy, we prioritise dynamic pricing, leveraging demand-supply dynamics to optimise revenue. We use key revenue management metrics such as occupancy, daily rate, and RevPAR (revenue per availability of room), alongside other tools to gauge the hotel’s performance. This enables us to identify trends, bridge gaps, and fine-tune pricing strategies accordingly.

Our distribution strategy consists of various channels, including hotel websites, online travel agencies (OTAs), global distribution systems, third-party websites, and travel agents. Recognising that each property is unique, we tailor our approach to optimise distribution channels for maximum reach and profitability. Through our initial study and strategic implementation, we ensure that every property receives a bespoke distribution strategy tailored to its specific needs.

Could you share some success stories or case studies of hotels you’ve worked with in Sri Lanka? How did you help them improve their revenue and occupancy rates?

In Gampola, we took on the challenge of establishing a nature-inspired villa despite scepticism from industry veterans. The other major challenge was the location, which is not commonly chosen by tourists. By studying the property and developing the ideal customer profile, we implemented tailored pricing strategies and experimented with different approaches for three months. After our testing phase, the villa achieved an impressive 80-90% occupancy rate year-round. This success has paved the way for the property’s expansion, transforming it from a modest three-bedroom villa into one with a larger number of keys.

Similarly, we tackled the online distribution struggles of a prominent hotel chain in Sri Lanka. Their online reservations occupancy was stagnating at less than 1% because they focused solely on a single distribution channel. Once Hotreve intervened, we expanded their visibility across five key platforms. Coupled with strategic pricing and distribution initiatives, this overhaul resulted in a monthly occupancy increase of over 20% from online bookings alone.

What challenges do hotels in Sri Lanka typically face with revenue management, and how does Hotreve Management address these challenges?

The most significant challenge is the lack of knowledge among the staff and industry stakeholders. Besides this, we see a severe shortage of talent and staff retention as the next problem. Operational inefficiencies and a lack of well-defined KPIs are also common. Relying on manual processes, dependency on a single OTA, poor communication between departments, and taking the wrong approach towards online reviews also add to the woes of the industry. However, the main concern here is that most people focus on the top-line revenue rather than the bottom-line revenue. 

Revenue management is not focusing solely on room sales. Instead, we take a holistic approach, ensuring that every department and aspect of a property that contributes to revenue generation is integrated into a cohesive strategy.

Contrary to popular belief, simply listing prices or promotions on various platforms doesn’t guarantee bookings. We emphasise the pivotal role of marketing in driving traffic and visibility, laying the foundation for successful bookings. We recognise the significance of reviews, not just from OTAs but also from platforms like TripAdvisor, Google, and Facebook, along with invaluable customer testimonials. It is only when all these elements work in harmony that bookings truly flourish. This approach has shown results across the 50+ properties we’ve worked with so far. 

Given the impact of OTAs in the industry, how do you leverage OTA partnerships to enhance hotel revenue and visibility?

Drawing from my background working with international OTAs, I have a deep understanding of how their algorithms work and what they expect from properties. Hoteliers often lack access to these insights. This expertise allows me to effectively advocate for the properties I work with and optimise their promotion on OTAs.

In your opinion, what are the emerging trends in Sri Lanka’s hospitality industry that hoteliers should be aware of for effective revenue management?

This includes experiential tourism, where guests seek unique experiences. They no longer want to simply book a room and enjoy a buffet. They want to see, learn, and experience more. Sustainable tourism is also significant, reflecting a growing concern for environmental conservation. The rise of digital nomads presents a new market segment, emphasising the importance of providing work-friendly environments and amenities. Adventure tourism is gaining momentum, leveraging Sri Lanka’s diverse landscapes for activities such as wildlife exploration, hiking, paragliding, surfing, and more. Aligning with global trends, certifications like Booking.com’s sustainability badge and work-friendly hotels badge can enhance a property's appeal and revenue potential.

With travel trends evolving, how does Hotreve Management adapt its strategies to attract domestic and international travellers to hotels in Sri Lanka?

We adapt our strategies to cater to evolving travel trends by prioritising experiential travel. Rather than merely selling rooms, we focus on providing guests with memorable experiences during their stay. This includes value additions. 

What role does digital marketing play in your sales and marketing approach for hotels? How do you utilise social media platforms like Instagram to promote hotels effectively?

Let’s be real here, digital marketing and social media aren’t just for hotels; they’re the lifelines for any business in today’s world. It is the heartbeat of our sales and marketing game plan for hotels. We’ve partnered with a specialised social media company to enhance our properties’ online presence. We don’t do cookie-cutter approaches; each property gets its own tailored digital and social media strategy. Unfortunately, not every hotel has caught on yet, but that’s where we come in, spreading the word and showing our clients the power of the digital age to increase their revenue. 

What are some of the main obstacles Hotreve is currently faced with?

One of the primary challenges Hotreve faces is the lack of industry understanding among hotel owners and certain industry workers. There is often confusion between sales and revenue management, with many mistakenly equating the two. While sales concentrate on the top line, revenue management encompasses a broader scope, including bottom-line considerations such as costs, finances, and profits across various departments, not solely room sales.

How does Hotreve Management collaborate with hotels to ensure sustainable growth and profitability in the dynamic tourism landscape of Sri Lanka?

We go beyond merely promoting the property; instead, we showcase the essence of the city itself. By aligning our marketing strategy with the latest travel, industry, and customer trends, we target specific nationalities interested not only in our properties but also in the experiences and attractions surrounding them. This approach maximises exposure and engagement, driving sustained success for our partners in the ever-evolving tourism sector of Sri Lanka.