Prioritizing Return on Investment in Hotel Investment and Decision-Making is Key to Staying Afloat

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Return on investment (ROI) remains the principal compass in the hospitality industry and in guiding new investments for hotel owners and operators. As costs escalate within the increasingly competitive environment, the focus on maximizing returns is crucial. As businesses grapple with economic uncertainties and shifts in consumer behavior, the spotlight turns to investments that promise tangible financial benefits. So then, how can hotel operators ensure their investments yield the desired financial returns while still enhancing guest experiences?

During a roundtable discussion on Experts Talk, about the hospitality industry ahead of AAHOACON 2024, Calvin Tilokee, CEO and creative director of Revpar Media,  detailed his take on this topic. He explored how hoteliers can effectively balance cost considerations with service enhancements to optimize their return on investment.

Some key takeaways from Tilokee’s perspective below:

  • For hotel owners and operators, the primary metric for assessing any new investment is its return on investment. This focus is even more pronounced in an economic climate where lending and operational costs are rising.
  • While enhancing the guest experience is important, it often ranks behind financial returns in investment decision-making priorities.
  • Successful investment strategies are quantified by specific metrics such as increased web traffic, conversion rates, direct bookings, and demonstrable revenue growth from targeted initiatives.
  • With the cost of borrowing and investing escalating, the pressure to deliver financially viable projects is intensifying for hotel owners.
  • The need for a strategic approach that not only targets immediate financial returns but also contributes to long-term brand reputation and customer satisfaction.

Tilokee shared an analysis that offered a roadmap for navigating investment decisions that align financial acumen with customer-centric initiatives.

Article by Alexandra Simon.

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