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?
Program Director, Master’s Degree in Hospitality Strategy and Digital Transformation at Les Roches Global Hospitality Education
In 2019, before any of us had ever heard of COVID-19, consumer behaviour was already leading smart hoteliers to look beyond room revenue and begin defining the product they sell as an experience, versus a simple hotel room. In early 2020 it would have been impossible to open the Hospitality Net home page without seeing the term Experience Economy in at least one of the headlines. And while since then, many hotels have unexpectedly been forced to survive without room revenue, if anything, based on the massive increases in travel related social media activity despite record low booking activity, this consumer shift has accelerated.
To address this evolution, every hotel should ask themselves what they can sell that a competitor, or an OTA, cannot. I guarantee, the conclusion will not be a bed and a toilet. It will almost certainly include a unique experience that only a local would have the connections to arrange, or perhaps even know about.
While some of these, like tickets to a local festival or the perfect set-up for a day at the beach can be turned into packages and generate revenue directly, even arranging a home-cooked local meal on a nice old lady's terrace can be part of a story that engages a future guest while they are still in the dreaming phase of their next trip.