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?

Christoph Hütter
Christoph Hütter
Non-traditional Revenue Manager & Consultant

Revenue Management has been described as the art of turning away business.

I don't think many of us turn a lot of business away these days. There simply is not enough demand to fill our rooms.

And if there are not enough rooms (and not enough room revenue), we need to find alternatives. 

So, yes, now is the time to turn to alternative revenue streams!

Many hoteliers were very creative in finding these alternative revenue streams over the past year. Guest rooms were converted to day-office spaces, meeting rooms were rented to schools to allow for teaching in physically distanced ways, equipment and services were rented out, etc.

Hoteliers have learned that opportunities are not just within the rooms department.

We need to learn, as an industry, to better utilize our spaces. This applies to meeting rooms as well as guest rooms. Can a modular approach address peak demands in either department?

While this is certainly a consideration for new developments, how can existing properties benefit from this?

These are questions we need to ask.

We need to shift our mindset from a room-only / RevPAR-focused approach to a Total Revenue per available square foot (or meter). 
And make that net revenue while we are at it...

I find this particularly interesting to address low-demand periods moving forward. At some point, demand will be back and we will start selling out again but we will be able to take some of the current lessons to apply them in low season!

One of the surprises of this past year was, while overall revenue dropped across the board, upsell revenue remained pretty stable. This goes to show that there is a great opportunity to grow revenue further.

What are hotels upselling now? Is there any upselling beyond premium room types and possibly early arrival/late check-out? What about meeting & event upselling? Does your hotel follow the opportunities in this space?

Revenue management is no longer the art of turning away business. Revenue Management is the art of uncovering opportunities.

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