Hello, Timmy Napsow here, Executive Vice President and Co-Founder of FortisPay. We're discussing RevPAR, Revenue Per Available Room today. And us, we as hotel owners and managers and finance departments, we're all trying to figure out how we can increase that number, the RevPAR number.
And there's a lot of different ways to do that. Obviously, hotels always have struggled in particular markets or particular brands to increase that number. Also, when you're dealing with ADR, you're trying to figure out, you know, can I decrease my ADR in order to increase occupancy?
Is that the best route to go? We have some brands that actually do the opposite. They want to increase their average daily rate.
and they're okay with taking less occupancy, provided that the revenue is consistent because you have less wear and tear on your rooms, less housekeeping, less maintenance, more longevity when it comes to the carpeting and all of the different products in the hotel. Also, when you're giving away free breakfast, so on and so forth, costs can actually increase when you drop rates. So it's not always a solution in order to increase occupancy. But what we're really talking about as well is this concept of OTAs previously used to control the entire market, the online travel agencies, when it came to the hotel space, especially when they were first launched.
I remember when Priceline was launched and we actually were looking at how we can compete against it ourselves when people would come into the front desk of the hotel, get a rate from us, and then just go to Priceline and get it cheaper. So what the brands decided to do to combat that is say, look, if you're publicly advertising a rate, On Priceline.com or Hotwire at the time or any of these other sites, the website of the brand or the franchise has to actually have that same rate or it has to be lower. And the reason for that was to create equal playing ground, an opportunity to actually know what the other rate is and fight it if you needed to so that you're not decreasing your revenue, your rev par or your ADR and so on and so forth.
While sometimes increasing occupancy, but not always a good solution as mentioned. What happens today though, is we can start to get really creative with meta search, pay per click, and how those things work. What we're looking to do is basically start to not have a catch all.
Our hotel has a spa, our hotel has a pool, our hotel has breakfast, our hotel has a restaurant or banquet facilities. What we're trying to do is get more specific. That's a catch all, just listing everything you have.
But if you start to further search and get involved in these types of smart searches, you're able to basically say, well, what is it that this individual actually wants? And let me help increase rev par by talking to them, you know, adding things. So if you go to a gas station, as an example, right now, every time you go ahead and you swipe your card at the pump, it asks you, do you want a car wash? Do they have a car wash? Well, that's just an automatic message that happens that they have turned on.
But imagine if the gas station could actually look at the car, right, and see that it's dirty and identify that. And when you go to the pump, it says, we see your car is dirty. Do you want to get a car wash? Because my car was just clean.
I don't need one, but this car is dirty. Now we're getting smart. Similarly here with hotels, what we could say is, hey, we see that what you were looking for or your habit was X, Y, or Z. What if when you went to go get this hotel room, it also said, would you also like to... Have breakfast included for X amount more.
Would you also like to have a spa package because we see you're celebrating an anniversary or so on and so forth. Now you're increasing rep par and you're doing it in a smart way that's talking to the guest. So really interesting to see how this is gonna shift, how smart searches and hotels getting more involved in the experience between them and the guest is going to change.
You know. being able to talk to the guests, chat with them, I think is going to be important in the future of hotels to actually identify right there on the spot what their needs are and increase rep power by talking to them and not just leaving them to the technology alone. Some interesting concepts, some exciting things coming in the future.
Thanks for listening.