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Charity Hanke, CRME, Corporate Manager of Revenue Strategy, Oxford Collection, HSMAI Revenue Optimization Rising Leader Council Member
With growing operational costs hotels need to get creative about ways to drive more Revenue. Ancillary and other revenue streams are becoming more and more important as the days go on and are moving to be included, if not already, under the revenue optimization umbrella. Aiming to improve topline revenue, combat rising operational costs, and increase guest conversion, ancillary and other revenue streams will become as important as rooms revenue in the blink of an eye.
1. Enhancing Guest Conversion
The spotlight on ancillary revenue has paved the way for increased guest conversion. Hotels are hosting tastings with local distillers and creating vibrant on-property activations, adding an experiential dimension to guests’ stays. These experiences, differentiated through unique offerings, have a two-fold effect: they not only increase on-property revenue but also fuel the creative exploration of new revenue avenues.
2. Innovative Revenue-Driving Strategies
The industry is witnessing a surge in creative strategies aimed at enhancing overall guest spending. Hotels are increasingly adopting a “vacation your way” approach, allowing guests to customize their stays with value-added services such as spa treatments and food & beverage options. Fostering partnerships with local attractions has also proven fruitful, with cross-promotions and social media collaborations driving both awareness and bookings.
3. Maximizing Opportunities for Add-On Purchases
Hospitality professionals are leveraging multiple touchpoints and ensuring ease of access to entice guests into availing additional goods or services. Just as retail stores strategically place products near the checkout line, hotels must proactively present guests with appealing options. This can range from exclusive scents to luxurious mattresses, inviting guests to take a piece of their stay home.
4. Strategic Cross-Promotion & Collaboration
Hotels are tapping into the marketing databases and reach of products or services that fall under other revenue to broaden awareness. For instance, a brewery’s Instagram followers can significantly boost a hotel’s visibility. The key is to seek partnerships that align with the brand and to focus on awareness-driven campaigns rather than discount-centric ones, which often present operational challenges.
5. Navigating Technological Challenges
Technology, while a boon, doesn’t always align with the dynamic needs of driving ancillary revenue. Integration issues and outdated systems from vendors can hinder seamless operation. However, the industry is adapting, with professionals weighing the benefits of manual intervention during low-risk periods against potential revenue gains.
Hotels must remain agile, adapting, and exploring the myriad avenues ancillary and other revenue streams present. It’s about learning from other industries, being proactive rather than reactive, and constantly seeking ways to intrigue guests and enhance their experience – all while ensuring the bottom line stays healthy.
Read more:
- A New Source Of Income For Hotels: Selling Ancillaries (forbes.com)
- Are we entering the “Ancillary Revenue Revolution” in the Hospitality Industry? (hospitalitynet.org)
- 8 Smart hotel ancillary revenue ideas for hoteliers – Oaky
- Hotel Revenue Managers Prioritize Ancillary Revenues, Taking Risks To Drive Profitability (costar.com)
Questions for your team:
- How has the greater focus on ancillary/other revenue impacted guest conversion.
- What are new or innovative ideas to drive Other Revenue aspects as a way to increase overall guest spend to drive topline, due to costs increasing and OCC being less palatable to drive topline.
- How are you providing opportunities for guests to purchase goods or services on top of their room with you? multiple touch points, ease of access, that kind of thing.
- How can you use products or services that fall under Other Revenue to cross promote with the product / service business, tap into their marketing databases and reach to expand awareness for you hotel.
- Example: “how many people does this brewery have as followers on Insta, and if they promote the hotel how many new eyeballs will see me”
How do you combat that tech doesn’t necessarily function properly for ancillary and other revenue.