While the rooms department is the dominant revenue driver in most hotels, and selling more rooms is central to growing hotel revenue, many lodging operators are now taking a more holistic approach to revenue management.
Today, a hotel stay is much more than a clean room and a comfortable bed. In such a competitive space as the hospitality industry, offering unique and personalized experiences is key to a healthy bottom line. Part and parcel of a complete stay experience, ancillary products and services — like F&B, retail and activities — can be strong revenue drivers.
With increased focus on maximizing business from existing customers, hotels are shifting toward a total revenue management culture that embraces the potential of ancillary services to generate revenue, personalize the guest experience and help a property stand out.
Here are some ideas for making the most of ancillary revenue opportunities as part of your own total revenue management strategy.
Packaging your property’s ancillary services and products with stays is an effective way to boost ancillary revenue.
Additional services such as breakfast, restaurant meals, in-room extras (like champagne and chocolates), spa treatments, attraction tickets and activities can be bundled with stays to create themed packages such as romance, adventure or family packages or to simply offer guests more value for money. If your property doesn’t have an onsite restaurant or spa or run its own activities, consider partnering with local providers that complement your brand.
Hotel management software that provides flexible rate and package management functionality, including the ability to sell packages online and to track package components to different revenue accounts, is key to a successful total revenue strategy.
Ancillary products and services can also be offered on demand, i.e. sold separately from the room. Many guests like having the option of purchasing extras spontaneously during their stay, or choosing from a selection of add-ons during booking.
Premium Internet, early check-in / late check-out, meeting spaces and equipment, tours and activities, grab-and-go food and beverages, and in-room extras like yoga kits, cots, and wine and chocolates are examples of ancillary products and services that guests can purchase at any time.
Make sure your PMS offers point-of-sale functionality and the ability to sell add-ons during the booking process (with direct online bookings too).
If you don’t already, consider allowing pets at your property to tap into a growing revenue opportunity. Pets are part of the family in approximately 65 percent of homes in the U.S. and more and more pet owners are traveling with their four-legged companions.
In addition to charging nightly pet fees and/or a pet room-cleaning fee, pet-friendly properties can profit from providing ancillary products and services especially for precious pooches. Pet-specific extras such as dog biscuits and treats, toys, bedding and pet-sitting services are much appreciated by pet-pampering travelers and can be provided on demand or included in pet-friendly stay packages.
Make the Most of Extra Space
There are many ways underused spaces can be transformed into revenue-generating spaces — both indoors and out.
Think about your main customer segments and how spaces can be used to best serve their needs and preferences. Does a “storage” room offer potential as a meeting room that can be rented by the hour to business guests? Or perhaps it could be transformed into a meditation or yoga room that could be rented to local instructors (who could hold drop-in classes open to your guests)? Could that spacious, well-lit corner be used for displaying local arts and crafts that your guests would love to purchase as a souvenir of their travels? Expansive outdoor areas might be well-suited for hosting events like summer parties, weddings and craft fairs.
Think creatively (yet relevantly) about how extra space on your property can be used more profitably.
Target the Right Customers
The key to maximizing total revenue lies in targeting — selling the right products and services to the right customers at the right time — and successful targeting depends on having access to the right customer data.
Guest profiles are crucial to effective targeting strategies. When a property management system is integrated with other core hotel systems, including POS, CRM and RMS, deep insights into customer spend, preferences and booking trends are gained and can be used to target guests with highly customized offers and services.
Supported by modern, integrated systems and good training, hotel staff can become sale makers rather than order takers, mining guest information that can be used to enhance the customer experience and maximize customer spend through the delivery of personalized service and skillful upselling.
With a strong understanding of their customers and their property, lodging operators can take advantage of ancillary sales to drive significant streams of income as part of their total revenue strategy — all while enhancing the guest experience.