Beyond Room Revenue - Revenue Management opportunities for 2021 and beyond
— 23 experts shared their view
COVID has hit the global hotel industry hard. But as with every crisis, new opportunities surface. During the financial crisis of 2008/09, we saw Airbnb and Uber emerge.
Many revenue-generating ideas were born over the past year. From staycation and workation to renting out equipment and even offering outsourced services like housekeeping. Hoteliers have been creative in finding ways to keeping their business afloat.
What was born out of a need for survival might lead to a more permanent shift in a hotel's business model.
The idea of non-room revenue is nothing new and even pre-pandemic was something more and more hotels embraced. F&B or MICE revenue management is still in its infancy for the overall industry but terms like Total RevPAR have evolved from buzzword to serious KPI.
Is now the time to look at non-room, ancillary revenue? Where are the opportunities?
Revenue Management Expert
Revenue managers need to focus on revenue generation. Upselling, cross-selling, total revenue management, new revenue streams should be part of the business strategy. Customization and personalization have to be at the core of revenue generation strategies. Put the guest in the driver's seat. Give the guest the freedom to create a perfect stay at your hotel. Do not wait until the guest books the room and then calls to place a request. Be proactive and turn such requests into revenue streams.
These are some ideas:
1. Let the guests build an ideal hotel stay by choosing room attributes and experiences at the time of booking (Add-On feature). Look at the hotel room as a base product, and then decide what you can sell separately: quiet room location, luxury linens, view, lower floor, cot, extra-large bed, etc. Think about additional services and experiences that will be of value to your guests: late check-out, champagne, fresh flowers, ticket to the local attraction, preferred parking spot, extra housekeeping service, laundry service, etc.
2. Stand out from the competition, drive direct bookings and increase total revenue by selling packages (Bundled rate type). Examine all hotel services and amenities and create bundles: Room plus variations of other elements like parking, spa service, tennis lesson, dinner, bar drinks, movie by the pool, etc. Packages have to be hotel-specific and stand out from competitors' offerings. Experiment! Listen to your guests. Find what works best.
3. Create innovative revenue streams. Hoteliers need to look at both spaces and staff expertise and find new ways of utilizing them. For example:
- Housekeeping services for residential and commercial clients
- Virtual and on-site cooking, cleaning, gardening, wellness classes
- Private chef and bartender for a luxury dining experience at home
- Laundry services for local residents and businesses
- Repurpose some hotel spaces to create co-working offices
- Day-use access to all hotel facilities & amenities for non-guests