Guest expectations are no longer confined to in-room amenities — they expand beyond to encompass a variety of services, activities, experiences, and all-inclusive packages. In this blog post, we take a look at over a dozen hotel revenue-generating ideas and explore how add-ons, services, and amenities can both improve the customer experience and boost your business.
First, let’s look at areas that can be expanded. When deciding how you’ll maximize your hotel revenue, consider a few things:
- What makes your hotel unique?
- What do you have to offer that no one else does? Is it your destination? Your particular location within your city? Architecture and design? Amenity offerings?
- What are your most popular offerings?
- What do guests love about staying at your hotel? Is it the service? The food and beverage? Your pool and spa?
- Why would someone choose your hotel over others?
With these things in mind, you can chart your course for how to best augment your offerings to generate more hotel revenue.
- Explore 17 hotel revenue-generating ideas to grow your business:
- 1. Host entertainment events at your property.
- 2. Cater to the needs of locals.
- 3. Offer pet services.
- 4. Offer hotel services to local rental properties.
- 5. Make your hotel kid-friendly.
- 6. Rent out your amenities.
- 7. Rent rooms by the hour or for single-day use.
- 8. Offer special discounts.
- 9. Leverage custom F&B experiences.
- 10. Encourage guest referrals.
- 11. Offer packages based on guest preferences.
- 12. Set up your own tours and activities.
- 13. Offer local food and beverage in-room and for sale in the lobby.
- 14. Offer amenities for purchase.
- 15. Upgrade your loyalty program.
- 16. Create a seamless app experience.
- 17. Offer exclusive experiences.
- Put these revenue-generating ideas for hotels to use today!
- How do hotels increase revenue?
- What is revenue in hotel industry?
- What are the components of revenue for a hotel?
- What affects hotel revenue?
- What is the main source of hotel revenue?
- What is the largest source of revenue for a hotel?
- What is revenue generation?
- What are revenue management strategies?
- What is revenue generating?
- How do hotels use revenue management?
- Revenue Generating Ideas for Hotels
- 17 Hotel Revenue-Generating Ideas to Boost Business – Cvent
- Three Main Revenue Sources In A Hotel – HotelTalk
- Hotel revenue management: Strategies to boost topline revenue
- 11 Simple Ways to Successfully Increase Hotel Revenue
- Hotel Revenue Management: Solutions, Best Practices …
- Hotel Revenue Generating Ideas For 2021 – Five Star Content
- How is hotel revenue calculated? 5 ways to do it properly
Explore 17 hotel revenue-generating ideas to grow your business:
1. Host entertainment events at your property.
Work with local performers, entertainers, or musicians to bring them to your hotel for events on a regular basis. Invite local bands to play during happy hour in your hotel bar or restaurant, or host weekly concerts that showcase new musicians or the best local talent. Aloft does Live at Aloft Hotels – live, intimate performances from local and emerging artists. Aloft even organized a Homecoming Tour for eight hometown artists who traveled to various Aloft locations.
2. Cater to the needs of locals.
Convert your hotel into a community hub and everyday problem solver for locals. AccorHotels calls this concept augmented hospitality. Augmented hospitality means hotels provide everyday services to locals — other than lodging — that helps them in their lives. “It’s all about proximity, instant gratification, and the feeling of belonging to a community,” said Maud Bailly, chief digital officer of AccorHotels, in an interview with Skift. Your hotel is open 24/7, and you have staff on hand with local knowledge — leverage that, and offer it up to the community.
AccorLocal is AccorHotels’ way of connecting with the community. Through this program, hoteliers can choose which amenities they offer depending on local demand, and which local products they sell in their hotel depending on relationships with local vendors. As another example, Ace Hotels acts as a community hub by hosting nightly community activities in its bars and restaurants.
Think about what locals in your community need and provide it. Is it a community gathering place? Dry-cleaning services? Luggage storage? Access to amenities? Work with local businesses and offer their services to the community in your hotel outside of normal business operating hours.
3. Offer pet services.
Many people and families want to travel with their pets, so offering pet services and being a pet-friendly property has the potential to attract more business. The Kimpton Monaco Seattle offers doggie room service with a special menu for guests’ furry friends at an extra cost. Rosewood London has a luxury canine package, where both dogs and owners are treated to a VIP experience. It includes a dog bed, collar, leash, and coat designed by Barbour, and a one-hour grooming session. The package also includes organic dishes made for your dog at the hotel restaurant.
4. Offer hotel services to local rental properties.
Offer your hotel services like concierge, maintenance, access to hotel manager, housekeeping services, and use of pool, gym, and other hotel amenities to nearby rental properties. Bermondsey Square hotel in London offers housekeeping, maintenance, and luggage storage services to Airbnbs within a one-mile radius. Airbnb guests also have 24-hour access to the hotel manager for any support they might need.
5. Make your hotel kid-friendly.
Making your hotel kid-friendly isn’t just great for traveling families, it’s a way to engage with your local community, too, and provide the services they need. Have kids recreational activities like a pool with toys, week-long day camps in the summer, and offer childcare services to guests and locals. Some hotels offer supervised kids clubs, like Palace Resorts in Mexico and Beaches Resorts in Turks and Caicos. The Ritz-Carlton has a children’s education program, Ritz Kids, where kids can get their hands into nature and learn about the planet.
6. Rent out your amenities.
Your hotel amenities aren’t only of interest to your guests – locals who live nearby might want to partake, too. Consider offering monthly memberships to use your facilities, like the pool and the gym. Local community groups might need a gathering place for a weeknight meeting for a few hours – offer up short-term rentals of conference rooms for small local meetings or events. Opening up your parking spaces for monthly rentals or pay-by-the-hour could be another way to boost your hotel’s revenue. Or, set aside certain spaces or a certain level of your parking garage for public use, but make sure there are still enough spaces for all of your guests.
7. Rent rooms by the hour or for single-day use.
Especially now, offer to rent rooms during business hours for locals who don’t want to work from home, but can’t go into the office yet. It’s a good alternative to working from their home while still being remote and out of the office. And, that means a room that would normally sit empty can generate some extra revenue. Or, upsell existing guests with late check-out or early check-in. During the booking process, provide the option to arrive a little earlier or leave a little later for an extra fee.
8. Offer special discounts.
If a guest asks you or your in-room Alexa or Google Assistant about the pool or the restaurant, append special offers and discounts so they’re more likely to engage. Have Alexa or Google share promotions based on the weather or what hotel events are coming up. If it’s a nice day, advertise a discount for drinks by the pool. If the weather is poor, have Alexa suggest information about a spa treatment. Advertise weekend brunch specials on the Friday before. As CEO of Volara David Berger wrote for Hospitality Net, “Offering special ‘Alexa rates’ for bookings of voice-enabled rooms can increase ADR.”
9. Leverage custom F&B experiences.
People increasingly want experiences over material things. Rather than typical room service, upgrade your F&B dining experiences for those who are looking for a little something extra. Provide an in-room chef who will make the dish right in front of them, or a mixologist who will prepare drinks from the comfort of their own room. Personal cooking classes or demonstrations with the hotel restaurant chef could be a unique way to forge a personal connection with guests and give them an unforgettable experience. Or, create a special package with private dining experiences, a seat at the chef’s table, and a selection of tasting menus.
10. Encourage guest referrals.
This one is a two-for-one benefit for your hotel. By incentivizing guests to refer their friends and family to stay at your hotel, you have a chance at winning new business – and repeat business. If a guest refers a friend to stay with you, offer them a discount on their next stay, and offer a discount or freebie to the new guest. Marriott Rewards offers a referral program for members of their loyalty program. Members get 10,000 points per referral, and for every stay their referral makes (up to five stays), the member can earn additional points.
11. Offer packages based on guest preferences.
You learn a lot about your guests through the booking process, especially if they’ve stayed with you before. Focus on their personal interests and preferences and offer packages designed exclusively for them. Partner with local event venues to promote concerts and shows that might be of interest and offer a package with a ticket and room bundle.
If you know the guest is interested in local food and breweries, bundle a pub crawl and discounts at a nearby restaurant with their room nights. If they’re winery fans, offer to add on a tour at the local winery. If they’re looking for a relaxing weekend away, suggest some spa treatments at a discounted rate or offer a deal for multiple sessions. If it’s a family traveling with kids, offer tickets to the local zoo or waterpark.
12. Set up your own tours and activities.
Organize your own tours of the city or partner with a local agency to provide these kinds of add-ons to your guests. Consider working with your local CVB or DMO to connect guests with the best experiences your destination has to offer. Surf lessons, guided hikes, bike tours, walking tours, museum-hopping, and kayaking and canoeing rentals are just a few ideas of activities you can offer to guests.
13. Offer local food and beverage in-room and for sale in the lobby.
Partner with local cafes, restaurants, breweries, and wineries to provide guests with an authentic taste of your town. Stock rooms with a basket of small free samples and have the larger versions available for purchase in the minibar or in the lobby snack shop.
14. Offer amenities for purchase.
Partner with your suppliers to offer in-room amenities for guest purchase. This includes things like linens, pillows, bathrobes and slippers, towels, toiletries, and things like dining ware, artwork, and china or light fixtures. Especially if you know your guests rave about certain amenities in their reviews, like the softness of the pillows or the quality of the towels, make sure to offer those things for purchase.
15. Upgrade your loyalty program.
Loyalty programs help boost interaction frequency with guests. It also encourages guests to book rooms using their points, which supports hotel occupancy. Focus on fostering long-term relationships rather than the short-term “sign-up bonuses.” Morph your program to fit the desires of today’s travelers. They’re less interested in traditional rewards and want things like high-quality service, personalization, and convenience.
Amar Lalvani, CEO, Standard International, said in a 2018 interview with Skift: “The loyalty that we want to generate is based on providing unique and addictive experiences. … We earn loyalty by connecting with guests on a social and cultural level. Knowing not only who they are and what they like, but knowing who they want to be when they stay with us.”
If you win their loyalty, you win their business for the long-term.
16. Create a seamless app experience.
Apps like Amazon and Uber are examples of seamless experiences. With just one touch, the transaction is complete and the item or service is on the way. Mastercard’s Dana Rosenberg said of seamless apps in an interview with Skift: “Hotels can develop a truly tailored loyalty experience with automatic behavior trigger conditions for offers and communications based off traveler geolocation, history or recent redemption to drive dynamic engagement and build customer appreciation.”
For example, Disney’s Magic Band is a wristband that provides a single touchpoint for guests to manage every part of their experience at the park and their hotel — from check-in and room access to food and retail purchases at the park. A branded app for your hotel can also offer the same type of seamless experience, and make it easier for guests to add on additional items and purchases.
IHG partnered with OpenTable and Grubhub to allow guests to order delivery or make a restaurant reservation and earn rewards points. Guests can also connect their credit or debit cards to their IHG Rewards account and earn points if they dine at thousands of qualified restaurants across the country. It also provides flexibility, where members can choose how and when they use their points to redeem Rewards Nights stays.
17. Offer exclusive experiences.
Experiences matter more than possessions. In fact, 74% of Americans prioritize experiences over products. As part of their rewards program, Marriott Bonvoy shifted their focus to experiences. Loyalty members can get exclusive offers like VIP concert access, tickets to sporting events, and midnight visits to the Great Pyramid of Giza. Offer fun experiences for all guests, like a cooking class with your chef or a guided tour of a local museum. Take those experiences to the next level for your rewards members, like with a private dining option and tasting menu, or a backstage pass to a concert of their choosing.
Put these revenue-generating ideas for hotels to use today!
Up next, explore just how important hotel SEO is, and discover how you can use it to maximize your visibility.
How do hotels increase revenue?
11 Simple Ways to Successfully Increase Hotel Revenue
- Offer Early Check-In and Late Checkout.
- Promote your food and beverage options throughout the stay.
- Offer room upgrades pre-arrival.
- Partner with local businesses to offer excursions and experiences.
- Take advantage of other upsell opportunities.
What is revenue in hotel industry?
It stands for total revenue per available room and, like GOPPAR, is not concerned with whether or not a room is actually occupied, only that it is available. It also considers all money brought in from rooms, including room service, food, other services. TRevPAR = Total Revenue / Number of Rooms in Hotel
What are the components of revenue for a hotel?
Principles and Elements of Effective Hotel Revenue Management
- Market Segmentation.
- Historical Demand and Booking Patterns.
- Demand Forecast and Displacement Analysis.
- Pricing and Inventory Management.
- Information Systems.
What affects hotel revenue?
Price is one of the main factors impacting a guest’s decision to choose your hotel. Pricing, or setting optimal rates for your inventory, is the key to maximizing your revenue. You have to carefully analyze the market to understand your customer and see booking trends.
What is the main source of hotel revenue?
Typically, revenue in the hospitality industry is generated through hotel room rentals, meeting space occupancy, and the sale of food or beverages. All of these produce profitable revenue for a hotel or other hospitality industry business such as a food and beverage operation, a theme park, or a cruise line.
What is the largest source of revenue for a hotel?
In the hotel industry, room revenue will always be the greatest source of revenue.
What is revenue generation?
The term Revenue Generation, refers to the process of creating sales of products and services, with the goal of creating income. For example, a company wants to generate a hundred thousand euros of revenue this year. Then, the company needs to set up a strategy to reach this objective.
What are revenue management strategies?
Revenue Management is the application of analytics that predicts consumer behaviour at the micro-market level to optimise product availability and price to maximise revenue growth. The primary aim of a revenue management strategy is selling the right product to the right customer at the right time for the right price.
What is revenue generating?
The term Revenue Generation, refers to the process of creating sales of products and services, with the goal of creating income. For example, a company wants to generate a hundred thousand euros of revenue this year.
How do hotels use revenue management?
Revenue management involves the use of analytics and performance data to help those in the hotel industry predict their customers’ behavior. The data is then utilized to make appropriate decisions in regards to pricing and distribution strategies.
Revenue Generating Ideas for Hotels
Revenue Generating Ideas for Hotels Hotels have perishable inventory. If a room stands empty for the night, the opportunity to earn revenue from renting it out is gone and can’t be recouped. It’s similar to the airline industry. Tickets can’t be sold for a flight that has already taken off. Revenue in hotels is generated from room rentals, food and beverage sales and meeting room rentals. Occupancy and Room Rate The two factors that determine how much revenue a hotel earns from its rooms are occupancy and average daily rate. Occupancy is the percentage of rooms sold each night. If a hotel has 125 rooms and sells 93, the occupancy rate is 74.4 percent. The other factor is average daily rate. A room that sells for $350 during high season could go for as little as $150 in the off-season. The difference is huge. At a 74.4 percent occupancy rate at $150 per room sold, the revenues generated are $13,950. At $350 average room rate, the revenues are $32,550. Ideas to increase either the occupancy or the average daily rate increase total revenue. Social Media Use Twitter, Facebook, Google+ and LinkedIn social networking sites and media to get the your hotel some buzz. Spread the word by offering tips about the restaurant scene, local events, travel tips and special discounts and offers. Discounts Business hotels sell rooms during the week. Resort hotels generate the most revenue during high season, whether that’s during the summer for beach locations or during the winter for ski resorts. Selling rooms at discounted rates in the off times generates additional revenue by increasing the occupancy rate. If your hotel is in the city and has mostly business guests, offer a discounted rate for those who stay over on a Friday night. Ski resorts take advantage of fall color packages or perhaps summer wildflower tours. Beach resorts can tout the privacy and seclusion of an off-season stay. Packages Many hotels have amenities that could be packaged together and offered as special deals. For a hotel located close to a golf course, the package includes breakfast, two rounds of golf and a room for the night. Downtown hotels might arrange for tickets to a sporting event or evening at the symphony as part of the package. Holidays are a natural for packaging such as a romantic Valentine’s with suite, champagne and chocolates in the room and dinner in the hotel restaurant. The package is a bargain for guests but adds additional revenue to the hotel’s coffers. Food and Beverage The more guests in the hotel it would seem the higher the food and beverage revenue, but it doesn’t always turn out that way. Guests may not want to wait in line for busy meal times or perhaps they just want to explore the restaurants rather than eat in the hotel. Consider offering guests a happy hour where the drinks are slightly discounted and the appetizers are complimentary. A twist on this idea is to sell the appetizers on a piecemeal basis, such as shrimp for $1.50 each, mini tacos for $1.00 or sliders for $1.25. If your hotel is upscale, consider a wine tasting or cheese tasting at a reasonable fee. Give a discount for diners who eat dinner early or late.
17 Hotel Revenue-Generating Ideas to Boost Business – Cvent
17 Hotel Revenue-Generating Ideas to Boost BusinessGuest expectations are no longer confined to in-room amenities — they expand beyond to encompass a variety of services, activities, experiences, and all-inclusive packages. In this blog post, we take a look at over a dozen hotel revenue-generating ideas and explore how add-ons, services, and amenities can both improve the customer experience and boost your business. First, let’s look at areas that can be expanded. When deciding how you’ll maximize your hotel revenue, consider a few things: What makes your hotel unique? What do you have to offer that no one else does? Is it your destination? Your particular location within your city? Architecture and design? Amenity offerings? What are your most popular offerings? What do guests love about staying at your hotel? Is it the service? The food and beverage? Your pool and spa? Why would someone choose your hotel over others? With these things in mind, you can chart your course for how to best augment your offerings to generate more hotel revenue. Explore 17 hotel revenue-generating ideas to grow your business: 1. Host entertainment events at your property. Work with local performers, entertainers, or musicians to bring them to your hotel for events on a regular basis. Invite local bands to play during happy hour in your hotel bar or restaurant, or host weekly concerts that showcase new musicians or the best local talent. Aloft does Live at Aloft Hotels – live, intimate performances from local and emerging artists. Aloft even organized a Homecoming Tour for eight hometown artists who traveled to various Aloft locations. 2. Cater to the needs of locals. Convert your hotel into a community hub and everyday problem solver for locals. AccorHotels calls this concept augmented hospitality. Augmented hospitality means hotels provide everyday services to locals — other than lodging — that helps them in their lives. “It’s all about proximity, instant gratification, and the feeling of belonging to a community,” said Maud Bailly, chief digital officer of AccorHotels, in an interview with Skift. Your hotel is open 24/7, and you have staff on hand with local knowledge — leverage that, and offer it up to the community. AccorLocal is AccorHotels’ way of connecting with the community. Through this program, hoteliers can choose which amenities they offer depending on local demand, and which local products they sell in their hotel depending on relationships with local vendors. As another example, Ace Hotels acts as a community hub by hosting nightly community activities in its bars and restaurants. Think about what locals in your community need and provide it. Is it a community gathering place? Dry-cleaning services? Luggage storage? Access to amenities? Work with local businesses and offer their services to the community in your hotel outside of normal business operating hours. 3. Offer pet services. Many people and families want to travel with their pets, so offering pet services and being a pet-friendly property has the potential to attract more business. The Kimpton Monaco Seattle offers doggie room service with a special menu for guests’ furry friends at an extra cost. Rosewood London has a luxury canine package, where both dogs and owners are treated to a VIP experience. It…
Three Main Revenue Sources In A Hotel – HotelTalk
Three Main Revenue Sources In A Hotel – HotelTalk – For Hoteliers | Guests Introduction: Hotel revenue sources include food and beverage, room rent, and ancillary revenue sources. Three main revenue sources in a hotel are room, food & beverage, and other income and the selling of the three main revenue sources in a hotel will dictate its success. It is the room sales effort that fills the sleeping rooms on a nightly basis. The catering sales effort endeavours to fill the meeting space. The combination of the two translates into sales in the outlets and ancillary revenue sources. Every hotel is different and has its own unique challenges and strengths. In hospitality, the financial health of a hotel is measured by the strength of the three components of the success triangle. The base of any triangle needs to be able to support the other two sides. Room sales, by definition, endeavour to fill the sleeping rooms in a hotel. A fully occupied hotel dictates the total hotel’s financial health. 1) Food and beverage / Events: A source of hotel revenue that is often overlooked. Many small and large hotels overlook the food and beverage revenue aspect of their business and, in turn, miss out on an opportunity to build a valuable part of their revenue. Food service is often seen as a necessary evil that costs more than it brings in, but guests’ hunger can be used to the hotel’s advantage. 2) Rooms: Provide the most direct means of generating income for the hotel. The rooms should be well-appointed and comfortable, with a view to attract guests who are looking for comfort rather than luxury. The room rates must also reflect this fact. The major focus on the hotel’s rooms, room revenues, and each room’s individual profit margin is due to the facility’s profitability, which occurs primarily in the sleeping room. 3) Other income: This includes items such as events, parking fees, laundry services, spa, recreational activities, saloon, travel and concierge services etc., The items which may not directly generate money for the hotel, but do help them make some extra cash. An ancillary or Other revenue source can be a hotel’s business center, golf course, events, parking fees, laundry services, spa, recreational activities, saloon, travel and concierge services, tennis center, audio/visual services, or gift shop. Other ancillary revenue sources include products/services available inside the guest room that are sold at a profit. These include in-room movies, minibars, and telephone service. Conclusion: A successful hotel needs to have a diversified revenue model. The preceding profit margin analysis highlighted the profit potential of hotel rooms. Subsequent to bed sales, that profit is only credible if rooms are sold. The key is to find ways of generating additional income streams that are not dependent on the success or failure of your core business, and which can be easily adapted as circumstances change.
Hotel revenue management: Strategies to boost topline revenue
Hotel revenue management: Strategies to boost your topline revenue Now, more than ever, revenue management is the cornerstone of running a successful and profitable hotel. The growth of data that’s now readily available as well as the ways to track and analyse it provides a wealth of new opportunities for your business to turn a profit. The most successful hoteliers are savvy operators who continually look for ways to learn and improve the way they do things, gaining an edge over the competition. Yet, only a small percentage of independent hoteliers use revenue management strategies and thus limit their revenue-generating potential. Read on to learn the strategies that will help you realise optimal revenues and profit for capacity-constrained and perishable assets (rooms, in this case). But before we get into that, let’s get our heads around the basics, starting with what revenue management is and what it can mean for your hotel. Table of contents What is hotel revenue management? Revenue management refers to the strategic distribution and pricing tactics you use to sell your property’s perishable inventory to the right guests at the right time, to boost revenue growth. Other products such as your amenities and food and beverage offerings will also come into the picture. Revenue management revolves around measurement of what customers from different audience segments are willing to pay and this can only be done by measuring and monitoring the supply and demand of your hotel rooms. Within the hotel industry, it involves the use of data and analytics to help hotel owners monitor supply and demand so they can make predictions on consumer behaviour. This then allows them to make better informed decisions on what accommodation to promote to the right client, at the right time with appropriate pricing through the most suitable distribution channel. It’s a cost effective business technique that allows the optimisation of inventories and helps to maximise profits while ensuring customer satisfaction. Understanding hotel revenue management Let’s start with the basics of hotel revenue management to get a better understanding; every traveller has a maximum value they can offer your hotel and revenue management is about capturing as much of this value as you possibly can. There are many ways you can approach this, from motivating guests to book directly to offering purchase extensions, up-sells or extras as well as encouraging guests to become a return visitor. Remember, the best strategies and techniques are based on the understanding that hotel pricing is fluid and can change from one day to the next. This is a key reason why hoteliers should never be afraid to increase your rates, and this may be surprising, but customers actually expect increases over time. Most businesses where consumers spend money, have varying prices based on demand, supply and shifts in costs. Why is revenue management important for the hotel industry? Effective hotel revenue management strategies and techniques can also help hoteliers: Better manage resources Protect against rostering too many staff during slow periods Ensure adequate numbers of staff are working during the busiest times With all this in mind, hotel revenue management can drive the entire business plan when implemented effectively. Your hotel distribution strategy is also a vital part of your revenue management plan; make sure you’re on internet distribution channels that are best to promote your destination online. The right distribution channels can have strong marketing power, putting your hotel in front of many customers you aren’t able to contact directly. It is important to have a secure and advanced hotel revenue management system to maximise revenues and yields. By using smart technology and a large dataset, hotels are able to foresee market demand in hospitality and react to…
11 Simple Ways to Successfully Increase Hotel Revenue
11 Simple Ways to Successfully Increase Hotel RevenueAfter 18 months of lost revenue and depressed earnings, hoteliers are doing everything they can to improve profitability. Some are seeking new and innovative ways to help their bottom lines while others are turning to tried and true methods that have successfully eased the pain of recessions in the past. Canary Technologies proudly serves thousands of hotels across the country, and we surveyed some to see which revenue strategies they were using during the strain of the pandemic. Below is a list of 11 of the top revenue strategies.There’s no silver bullet to optimizing hotel revenue. But many of the below strategies can be used together to successfully increase hotel revenue and help reverse the sting of the last 18 months. 1. Offer Early Check-In and Late CheckoutOne of the simplest ways to increase revenue at your hotel is to charge for certain premium services instead of simply giving them away for free. Many hotel guests want the ability to check-in to their rooms early and checkout of their rooms late. A staggering number of hotels are currently honoring these requests for free.These fees can substantially increase hotel revenue and the data shows that customers are more than willing to pay anywhere from $20 to $50 for an early check-in. Some hotels are using this add-on to generate over $30k a year in fees. Imagine giving away $30k worth of services every year! On top of that, early check-in and late checkout fees are nearly 100% profit as the revenue drops straight to the bottom line results of the hotel. Not many revenue drivers can make the same impact on the P&L. It’s important to note that hoteliers cannot always allow guests to check-in early or checkout late if occupancy is high. Shameless Plug: Canary’s Upsell software makes it easy for hoteliers to approve or deny guest requests for early check-in and late checkout. Guests are only charged the early check-in and late checkout fees if you accept the request, allowing you more control over arrivals and departures. 2. Promote your food and beverage options throughout the stayModern hotel guests are used to the on-demand convenience of ecommerce options offered by companies like Amazon, DoorDash and Uber. Customers today want to be able to order what they want, when they want, and have it delivered quickly. This is why Canary has created upsell options in their software that allow hoteliers to cater to on-demand customers. We provide your guests with digital access to menus directly on their phone. This way, they can browse your options at their convenience and purchase items directly through our platform. Allowing your guests to see a digital menu on their own phone is convenient and will significantly increase purchase rates. 3. Offer room upgrades pre-arrivalHoteliers should take advantage of upselling all throughout the guest journey. This should subtly begin before your hotel guests are scheduled to arrive. In addition to offering early check-in and late checkout, hoteliers can offer their guests room upgrades pre-arrival. Last minute room upgrades are a win-win for the guest and hotel. Offering upgrades to your guests immediately prior to their stay may allow you to provide a discount on a nicer room. This way your guest will enjoy an upgraded room and you will enjoy increased revenue.Canary software can offer room upgrades to guests at multiple touch points prior to arrival this includes post booking, all they way up to 24-48 hours prior to arrival, and even during…
Hotel Revenue Management: Solutions, Best Practices …
Hotel Revenue Management: Solutions, Best Practices, Revenue Manager’s Role Reading time: 20 minutesA hotel jam-packed with people isn’t always a profitable hotel. The hallmark of a successful hospitality business is revenue. To increase the bottom line, hotels have to employ various revenue management techniques and strategies. Ludovic Cacciapaglia (hospitality distribution and eСommerce specialist and former head of global distribution at Shangri-La Hotels and Resorts) emphasizes the role of revenue managers in the current unstable environment: “… the pandemic requires the revenue manager to take a leadership role in the hotel commercial strategy; for example, revenue managers are likely to be the only ones to know when and how marketing campaigns should be run and to create truly relevant offers.” In this article, we will define hotel revenue management, identify the facets that shape it, and look at the most effective revenue-increasing strategies. What is hotel revenue management? Robert G. Cross, the author of the book Revenue Management: Hard-Core Tactics for Market Domination defines revenue management as “the art and science of predicting real-time customer demand at the micromarket level and optimizing the price and availability of product.” How hotel revenue management worksSimply, revenue management means predicting consumer behavior to sell the product at an optimal price every day. Therefore, the definition of hotel revenue management is straightforward: selling the right room to the right client at the right moment at the right price on the right distribution channel with the best commission efficiency. Sometimes revenue management is called yield management, but these terms aren’t interchangeable. Revenue management is defined by interconnected components, which are Customer segmentation, Demand forecasting, Inventory management, Yield management, and Pricing. Each plays a crucial role and greatly impacts the ultimate financial result of a hotel, so let’s describe them one by one. Hotel revenue management elements and strategies Revenue management components don’t exist in a vacuum. They complement each other and form a general strategy, which serves as a basis for rates, policies, distribution, and marketing activities. Customer segmentation Customer segmentation is an important part of marketing and pricing as it allows you to define groups of travelers that visit your hotel and address them differently. For example, business travelers have different needs and preferences than backpackers on a budget, so you have to know your customer and be ready with the offers that fit each group. However, there are more possible categories that you might want to identify and market to than just “business vs leisure”. Some typical segmentation criteria are demographic factors (age, gender, marital status, etc.), the trip’s purpose (business, sport or entertainment event, family vacation, wedding, etc.), stay duration, traveler status (new, returning, or regular), booking channel (direct, through an OTA, or walk-in), and so on. Each customer group provides opportunities to gain extra profit — if you do it right. For example, you might offer discounts to your loyal customers, create tour packages for families, or negotiate rates with companies that have many business trips. Further analysis can help you discover important trends in customer behavior. You might find out that some customer…
Hotel Revenue Generating Ideas For 2021 – Five Star Content
Hotel Revenue Generating Ideas For 2021When I surveyed blog readers in December, “revenue” came up a lot — given how much the landscape has changed, I knew I needed to write about new hotel revenue generating ideas and strategy.There’s a lot of talk in the industry right now about ancillary revenue streams, particularly outside of rooms. How do you increase revenue in hotel when you can’t put heads into beds? What do you do when your loyal guests can’t travel and group business isn’t rebooking?Phew, deep breaths.I often say that hotel marketers and revenue managers should be BFFs — more than ever, these two functions need to be aligned if you’re going to execute an effective hotel recovery strategy during COVID.Since I mostly write about the marketing side of things, I decided to ask a few hotel revenue management experts in my network for their thoughts:What were some big lessons learned in 2020 that you’ll take into 2021 and beyond? Here’s the advice they had to offer fellow hoteliers: Build customer confidence through transparencyEvery expert I spoke with echoed this sentiment: The hotel industry remains focused on caring for others. Trust and consumer confidence go a long way toward building loyalty, especially in the midst of a global pandemic.Rohit Datt, cluster revenue manager at RBH Management, suggests the importance of aligning yourself with the psychology of your customers.“Many major brands have built customer confidence by being transparent with COVID-related hygiene protocol and offering flexible cancellation terms,” said Datt. He added that psychology is part of understanding different traveler types and assessing pent-up demand to estimate how occupancy will trend in the year ahead.All of this relevant info should be made available to the customer at the time of booking.Sanchit Rege, Director of Direct Channel and Metasearch Strategy for Hyatt in Europe, Africa, Middle East & South West Asia, agreed. He said customers were most impressed by hotels (and companies in other sectors) that provided information about health and safety measures upfront.If you haven’t already, make sure you’re reviewing and updating your hotel website COVID-19 FAQ page.Loyalty and experience will drive direct bookingsTransparency helps build trust, but what can you do to keep it?“Good old service and online reputation,” said Rege. Feedback and ratings from previous customers “remain critical for all hotels to drive repeat business — and influence new business.”Rege also said that in a post-pandemic future, he expects guests will want to revisit some destinations — giving booking preference to the hotels they know they can trust to deliver that safe, welcoming experience.Amber Kasses adds a dual perspective as a former director of both Revenue and Sales & Marketing for Accor Hotels. “Now that working from home is so firmly embedded in our workforce, you’ll see a lot more people trying to blend their work and leisure lives as they travel,” she says.Kasses thinks the “bleisure” market will only continue to grow — and hoteliers would be wise to see it as an opportunity for revenue from upgrades and addons, as well as guest loyalty.Hoteliers must continue to think creatively“For those hotels who have spent much of 2020 and even 2021 with their doors closed or occupancy significantly lowered, traditional revenue streams won’t be enough to help them rebound,” says Kasses.Thibault Catala, revenue management consultant and founder of Catala Consulting, also stresses that in times of crisis, certain soft skills are more important than ever.Catala says hoteliers should remain agile and…
How is hotel revenue calculated? 5 ways to do it properly
How is hotel revenue calculated? 5 ways to do it properly ⋆ UpStay ⏱ You will read this in just 7 minutesWhile emerging technologies push the hospitality industry and make specific processes easier to stay on top, you still need to know the basics. If you want to take your hotel revenue management to the next level, you need to learn how hotel revenue is calculated. If you’ve never done it before, you might think it is very hard. Trust us, it’s not. Once you master the Key Performance Indicators (KPIs) and know how to calculate each one of them, calculating hotel revenue becomes easy. Let’s start. How to calculate room revenue hotel To calculate room revenue, you need first to calculate the following KPIs: Average Daily Rate (ADR)Total Room RevenueRevenue per Available Room (RevPAR) ADR ADR is your go-to KPI if you want to discover how much revenue your hotel generates per occupied room per day on average. It only includes occupied rooms which makes it an important KPI when you want to do forecasting. ADR = Room Revenue in a Day / Number of Sold Rooms ARR Right next to ADR, we have another KPI, Average Room Rate or ARR. Unlike ADR, you can use ARR to calculate the average rate for different periods (week, month, year). ARR = Total Room Revenue / Total Rooms Occupied Total Room Revenue Total Room Revenue is a KPI that you need to calculate in order to see how much revenue all your occupied rooms generate during the given period. Total Room Revenue = Number of Sold Rooms * ADR RevPAR RevPAR is another performance metric. However, this one takes into account all your rooms. It can help you determine the occupancy rate and performance of your ADR. RevPAR helps you measure the profitability of your operation as it enables you to assess the hotel’s performance during a specific time. It also allows you to compare your hotel’s performance to the average performance of other hotels in the market. RevPAR = Total Room Revenue / Number of Available Rooms *or* RevPAR = ADR * Occupancy Rate The Occupancy Rate is easy to calculate. You have to divide the Total Number of Occupied Rooms by the Total Number of Available rooms and multiply the result by 100. RevPAR also enables you to compare your hotel’s RevPAR to the average RevPAR in the market. To do it, you need to calculate the Revenue Generation Index or RGI. RGI = Your Hotel’s RevPar / Hotel Market RevPAR How to calculate lost revenue for a hotel room Every room in your hotel is your asset that comes with certain upkeep expenses and can generate revenue. Every day the room remains unoccupied translates into lost revenue for that particular hotel room. Calculating lost revenue for a hotel room is straightforward, and you can do it for specific periods. Lost Revenue for Hotel Room = Number of Days a Room Was Unoccupied (during a week, month, or year)* ADR. How to calculate displaced revenue for hotel rooms Displaced revenue occurs when you have to make a tough decision to move or not accept some guests to accept group booking. For instance, you can…