How to generate more core and non-core ancillary revenues for your hotel?
— 8 experts shared their view
Maximizing revenues for your hotel in this age of lower occupancies and ADRs is the smart thing to do. Many hoteliers are struggling to create the internal processes and systems to successfully sell ancillary services.
To begin with, the revenue opportunities are gigantic from both core "hotel" ancillary products: room upgrades, early check-in, late check out fees, etc. and "non-hotel" ancillary revenue from selling insurance, tickets to museums, theme parks and theaters, concerts and sporting events, etc.
Hoteliers need to study and copy the airlines' mastery for generating ancillary revenues "out of thin air": in 2019 the airlines' ancillary revenue grew to $64.8 billion from $28.5 billion in 2014. Some airlines like Allegiant Airlines in Las Vegas, Nevada generate as high as 40% of their total revenue from auxiliaries.
Amidst the pandemic, both core and non-core ancillary revenues have proved essential for hotels to stay afloat. Most notably, by identifying the shift in customer segments (from international to domestic), many hotels were able to capitalize on Day-use bookings and secondary services (i.e. SPA) to maximize their revenues. This rapid and widespread adoption of a relatively new approach to hotels' operations has been a testament to the resilience of our industry.
While this innovative concept is a great first step towards recovery, its technological execution has long remained shaky. Indeed, although you might get the idea right, properly implementing it throughout your digital channels can still be a challenge. At PrivateDeal, we are proud to have accompanied our hotels during this paradigm shift by introducing ancillary revenues as an integral part of the solution. Thus, our hotel partners were able to easily and quickly put their ancillary revenue strategy into place without the hassle of finding (or developing) a brand new system.