Generate More Revenue from Your Accommodation: The Levers Explained

There are only four ways to generate more revenue from an accommodation: more bookings, a higher price per night, a larger share direct instead of via Booking, and more revenue per guest. All smart tricks fall under one of those four.

The problem

You want more revenue, but "more revenue" is not a plan. Most hoteliers immediately think more bookings, so more marketing, more presence on Booking, more advertising. That's exactly the most expensive and slowest route.

Say you have 6 rooms and run around €200,000 per year, with about 72 percent of your bookings via Booking.com. In peak season you're often full anyway. Getting more guests then isn't even possible, and outside the season it takes serious effort and ad budget to land a few more.

What many hoteliers miss: the other three levers work on guests you already have. You don't need to bring anyone in. A couple euros higher price, breakfast added, or the same booking direct instead of through a platform. Those are euros left on the table right now, without you needing to step up marketing or build an extra room.

More importantly: the levers stack on each other. A small improvement on all four at once does much more than a big improvement on one. That's because they build on each other. A higher price works on every booking, and if a larger share of those bookings also comes in direct, you keep more per booking. The effect multiplies, it doesn't just add.

That's why "more revenue" isn't a plan but the outcome of four choices. Once you know what four buttons there are and in what order to turn them, it gets concrete. The rest of this article lines up those four levers, shows with a calculation example what they're worth together, and gives the order in which to tackle them best.

Calculation example

Take that accommodation at €200,000 per year. Below is what an 8 percent improvement on each lever delivers, and what the compounded effect is if you tackle all four.

Note the difference between revenue and what's left at the bottom. The lever "more direct" doesn't raise your revenue, it lowers your costs: you no longer pay commission on that part.

ADR stands for Average Daily Rate, your average nightly price across all sold rooms. It's the number you get by dividing your room revenue by the number of sold nights. Move from €120 to €130 average on 6 rooms, and that ticks up on every night of the whole year, even in busy months when you're full anyway.

Two things stand out. Four times 8 percent feels like 32 percent, but through the stacking effect you end up at over 36 percent extra revenue. And the levers differ greatly in margin: an extra euro in revenue via a higher price is almost entirely profit, while an extra euro in revenue via more bookings via Booking first costs 15 to 18 percent commission.

The "more direct" lever looks small in the table, but that amount is pure savings. It costs nothing to land, because those are bookings you'd get anyway. At a larger share via Booking, say 72 percent, that saved commission quickly adds up. If you shift 8 percent of your total revenue from Booking to your own site, you keep the full commission on that part in your own pocket every year instead of with the platform.

So don't flatten the calculation into one number. Look at each lever for two things: how much work does it take, and how much of it stays at the bottom. That determines the order.

Step-by-step plan

Not all levers are equally fast or equally profitable. The order in which you tackle them determines how fast you see results. Don't start with more bookings.

Step 1: higher price and revenue management. This is the fastest lever, because you don't need to bring anyone in. Ask higher prices in peak weeks and push occupancy in quiet months. This steering by price and occupancy per period is called revenue management. For a small accommodation it doesn't need expensive software. How to tackle that without a team is in revenue management for a small accommodation. Want to dive deeper into the two core numbers occupancy and ADR? Read raising occupancy and ADR.

Step 2: more per guest. The guest is already at your desk, so every extra spending is almost pure profit. Breakfast, late checkout, a bottle of wine in the room, a package with a bike tour. This is called ancillary revenue, so revenue alongside the room itself. Which extras work and which don't for a small accommodation is in ancillary revenue and cross-sell.

Step 3: more direct bookings. Here sits your highest margin, because every direct booking saves 15 to 18 percent commission. This takes more time to build than steps 1 and 2, but the effect is lasting. The concrete tactics are in getting more direct bookings. Want to first understand why your dependence is a risk? Read becoming less dependent on Booking.com.

Step 4: more bookings. Only then do you really push volume, especially for quiet months where you still have room. How to fill those empty rooms without tanking your price is in filling empty rooms in low season. Why this comes last: more bookings is the lever that takes the most time, money and patience, and in your peak weeks it delivers nothing because you're already full. Use the three cheaper levers first, then invest in volume.

The thread: start with the guests you already have, not guests you still need to bring in. That order is no accident. It runs from fast-and-cheap to slow-and-expensive, and from high margin to lower margin. That way you see the first result within weeks and build the more expensive work on an already healthier foundation.

Common mistakes

• Only pushing more bookings. That's the most expensive lever and in peak season you're often full anyway. You leave the three easier levers on the table.
• Mixing up revenue and profit. €1,000 extra revenue via Booking is after commission roughly €820. The same €1,000 via your own site is almost €1,000. Look at what's left at the bottom, not just revenue at the top.
• Wanting to perfect too much at once. You can't perfect four levers at the same time alongside running your accommodation. Tackle them in order, one per quarter.
• Not daring to raise price. Many hoteliers ask the same price for years out of fear of empty rooms. A price 8 percent higher costs you at most a handful of bookings and delivers almost full margin on the rest.
• Ignoring the quiet months. That's your growth room. In peak season price is the lever, in low season occupancy is the lever. The same tool doesn't work in both periods.
• Not distinguishing between revenue via Booking and direct revenue. Two €120 bookings look the same, but the direct booking is worth a few more euros at the bottom line. Anyone pushing only on booking numbers misses that the source is just as important as volume.
• Making extras too complicated. A breakfast choice of five options or a package with ten parts takes more time than it delivers. One or two clear extras you offer as standard sell better than a long list nobody reads.

What you can do now

Start with the two fastest levers, because they work on guests you're already bringing in. Raise your price in peak weeks and think up one or two extras you can sell per stay. Together it takes little and it immediately delivers more revenue per guest.

Then calculate what you're spending on Booking commission via the savings calculator. That amount is often your easiest win, because for every booking you shift to your own site you save the full commission without needing an extra guest. For an accommodation of €200,000 that runs 72 percent via Booking, it quickly adds up to over €20,000 commission per year. Every percent you reclaim stays entirely with you.

The order one more time: first revenue management, then more per guest, then more direct bookings, only then more volume.