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?

Niki Van den Broeck
Niki Van den Broeck
Product Manager Parity Insight and Rate Insight

One thing the pandemic proved is that revenue is revenue, regardless of its departmental, origin. Potentially, the Meetings & Events revenue stream represents about 20% – 35% of total revenue, revealing the need for active optimisation. Moreover, In Meetings & Events larger revenues are attached to one inquiry. Accepting a $2.000 meeting could block inventory and prevent you from hosting a $70.000 conference. The stakes are high, but the rewards even higher (even currently reducing a 0, the dilemma remains). A data-driven approach will boost confidence and empower everyone involved to take decisions and move away from the first-come-first-serve approach that leaves a lot of revenue on the table.

The hospitality industry has shown resourcefulness and resilience in the past year. Many creative ideas were born out of the absolute need to think outside of the box. Let's continue in this fashion, even when the pandemic becomes a vague memory. Meetings & Events as a concept is too narrow to reach hotel function space's full potential. Meeting rooms remain empty on weekends, holidays and evenings. Understandable, bosses who schedule meetings in the evening don't make themselves popular, but this also results in a massive missed opportunity.

We need to move away from the idea of "Meetings & Events" and instead think about "Space as a Service". Simplistically, you have a certain number of square meters. You sell the square meters for meetings (yes), events (yes), but anything else is possible as well, especially during “low-time”. I think of space for exhibitions, workshops, rehearsals, pop-ups,... and the sky really is the limit here. The only limitation should be a cultural fit with your hotel concept. A revenue manager is responsible for selling these square meters in the most profitable way possible.

The concept of Total RevPAR is a positive step forward, but still places hotel rooms at the center. Why not talk about Total Revenue per Available Sqm instead? At the end of the day, that's what it's all about.

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