What can you do in your hotel or resort to generate additional income? It often sounds easier than it is in reality. We have been brainstorming and have come up with some great hotel management tips to sell extra services. And then there is the next challenge with upselling and cross-selling. There are several extra services to offer in our hotels but how do you know what is most profitable. Which ancillary revenues bring more income while require less effort in terms of investment, time spent and people dedicated?
Hotel Revenue growth? Start Upselling from Today and Maximize the Revenue
Over the last weeks, we have been racking our brain and plowing through hotel websites to gather best practices for upselling and generating ancillary revenues in hotels. We have looked at our own portfolio, and outside to come up with a list of amazing tips.
Whatever the size of your property, the potential of ancillary revenue is big and the options to get it can be very creative …
ANCILLARY SERVICES IN HOTELS, WHAT OPPORTUNITIES EXIST?
Your hotel has high occupancy, the reviews of your resort are good, or your want to increase the average income of your hotel or resort. This is the moment when you ask yourself “What is next?” Annual industry reports say that ancillary sales will account for more than 18% of a ‘tourism business’ total revenues. Want your piece of the pie?
There are 4 different ways to use ancillary revenue in hotel and start with a total revenue management strategy:
1º CREATE PACKAGES:
Bundle ancillaries (add-on services) with higher category room types. This option is known as “Themed Packages”, and is all about selling an experience. You can call them romance, adventure or family packages.
Be aware that some guests look for the entire travel experience, but others prefer to organize flights and hotels first … and think about activities after. Address both:
– Offer themed packages on your web so they can choose it during the booking
– A week after a room booking is completed, send an email to the guests offering the activity (with a nice picture and the price), and upsell to them…
Do not limit yourself: if you do not have facilities for activities, partner with local third parties. We talked about this as well in our last article about what hotels can learn from AirBnb.
Examples on How to apply this Ancillary Revenue idea to Resorts
You have a nice hotel or resort in a beautiful location, congratulations! Some guests will choose your location and will find you, but you can do much better…
Use your surrounding to sell a broader experience, that goes beyond your hotel. Add a pack of activities in the form of a package and find one key activity related to each target customer market (young adventurers, couples, seniors). Two awesome examples:
Did you know, you don’t even need to have a spa to actually position / market your property as a Spa Hotel? Look at Hotel de Londres y de Inglaterra in San Sebastian, for instance. Here we have partnered with the high-end La Perla Spa and created a wonderful package.
People swimming at the Spa La Perla
It is one of the most looked for searches on Google for your destination. So why not offer it on your website? You can do a simple champagne and chocolate offer, or build a more extensive romantic package with a dinner for 2 in an exclusive location or restaurant. You can let your imagination do the work.
Golf & Sports
A popular sport, with dedicated travelers. Again, there is no need to be on or next to the golf course. Build a package together with the local golf course.
And what other activities can we target just as golf? Hiking, diving, cycling, kite-surfing, paddling, kayak, and many more …
Other packages that come to mind: culinary, family activities, cultural, city tour, weekend break, etc
2º TARGET A CLIENT NICHE MARKET
Choose a niche client market and be the best there. To properly cover the niche you will have to adapt your property and your communication. The good part of this strategy is that you can, and should, offer related services to improve the experience and your guests (and charge them for it…)
Dog Friendly Hotel
Pet owners are known for being very generous with their furry friends. But the hospitality industry is slow in getting adapted to cover their needs. Not just in terms of accepting pets at hotels, but also for offering special products for them. So we have put some ideas together for you:
– Offer a pet friendly room rate that includes an extra mini bed for the dog and a pack of plastics bags, a toy and some dry food
– Have a little shop with products that the pet owners might need during the stay
– Partner with a veterinary, so you can easily offer it in case is needed
– Propose services such as dog walking, dog washing, dog daycare, so guests can go to touristic activities while their dog is enjoying too!
Family & Kid Friendly
Do you have Family Rooms in your hotel? How will families find your hotel when searching on Google … a fair question to ask, if you want them to stay at your hotel, right?
Family vacations are expensive, and a cool family friendly hotel is the perfect option. But is your hotel truly kid friendly? What activities inhouse and outside do you offer?
Some ideas to ponder on …
– Nursing and childcare service, to help parents to rest some hours a day and enjoy the city by themselves.
– Early check in and late check out, so they can easily adapt logistics to the schedule of the children.
– Propose a daily schedule of paid activities for children at various ages in the city and the nature…and adult activities organized at the same time.
– Sell nice but simple and healthy packed lunch to take out, for a day on the town.
– Offer family rooms to keep their spent low and also to make easy the night care of the little kids.
3º GET ROI FROM UNDERUTILIZED AREAS
True, every refurbishment requires money spent but…Have you ever calculated the ROI of any of the actions below?
– Call to advertising agencies and startup incubators to offer them your garden for their events, do it for free the first time, make stunning pictures and get awesome reviews … and after you can start charging for it.
– Are your meeting rooms being used all the time? Could they be used as a space for for photographers to do a photoshoot? Or as a space for companies to conduct interviews, recruiting staff?
You could potentially also turn it into a co-working space … it all comes down to math. The trick is to make the spaces as polivalent as possible, and not just for banquets or weddings …
4º CREATING A COMPETITIVE EDGE
OTA and Meta-Search are still very focussed on selling rooms. So it is up to you to make your hotel stand out, and add experience to the mix.
The key to succeed is to be an expert on your customer profile and to clearly define which product or service could be interesting for them…at each stage of the customer journey, because if you do it on this way the offer will be seen as a valuable proposal instead of a sales opportunity.
– Offer some low cost service during the booking process:
Stand out from your competitors with a pick up on the airport or a free parking spot. What surprises me the most is the big number of properties that are including this service already but do not highlight it during the booking process!
– Inspiration and planning during and after the booking:
Offer activities for guests who need inspiration and for the ones that think about activities days after the hotel reservation is done. Zoku Hotel sends an email with upgrade offers and San Nicolas Hotel in Belgium offers a delicious chocolate tour on their web.
– Offer paid activities during the stay too. Your front desk can mention it to the guests at the arrival. It could be cooking classes of local recipes on rainy days… or yoga lessons at your lovely rooftop.
– Partner with local artists and decorate your hotel with pieces of art available to buy. See an example of the Omni Hotel in Dallas that is exhibiting more than 7000 artworks at common areas and at guestrooms.
Xotels is a leader among hotel management companies. We help independent hotels outperform their competition with our hotel revenue management services and HotelScienz revenue management system.