Hotels are constantly seeking innovative ways to enhance their revenue streams. One often overlooked avenue is ancillary revenue, which refers to the income generated from services beyond room bookings. In this article, we explore why hotels should care about boosting ancillary revenue, the significance of Total Revenue Per Available Room (TRevPAR), and how technology plays a pivotal role in personalised upselling to improve the overall guest experience.
Why Should Hotels Care About Boosting Ancillary Revenue?
The hospitality industry is evolving, and hotels need to adapt to changing consumer preferences and market dynamics. While room bookings are a primary revenue source, ancillary revenue presents a significant opportunity for hotels to increase their overall profitability. By diversifying income streams, hotels can withstand economic fluctuations and enhance their financial resilience.
Key Contributor to TRevPAR
Total Revenue Per Available Room (TRevPAR) is a comprehensive metric that goes beyond traditional revenue measurements. TRevPAR considers not only room revenue but also includes income from additional services such as dining, spa, parking, and more. For hotels, focusing on TRevPAR provides a holistic view of their financial performance and underscores the importance of boosting ancillary revenue.
How Technology Can Help in Upselling
The advent of technology has revolutionised the hospitality industry, offering hotels the tools they need to maximise ancillary revenue through effective upselling strategies. Here’s how technology plays a crucial role:
- Data-driven Insights: Technology enables hotels to gather and analyse vast amounts of data about guest preferences, behaviours, and spending patterns. By harnessing this information, hotels can tailor their upselling strategies to individual guests, providing a more personalised experience.
- Predictive Analytics: Advanced analytics tools allow hotels to predict guest needs and preferences based on historical data. This foresight empowers hotels to proactively offer relevant upselling options, increasing the likelihood of conversion.
- App-less Mobile Platforms: Hotels can leverage app-less mobile concierge to connect with guests before, during, and after their stay. These platforms serve as effective channels for promoting ancillary services, such as room upgrades, spa packages, or dining experiences.
- Automated Communication: Technology facilitates automated communication, enabling hotels to send targeted, timely, and personalised upselling offers to guests. Automated email notifications can highlight exclusive deals and upgrades tailored to individual preferences.
Personalised Upselling: Elevating the Guest Experience
In the era of personalisation, guests expect a tailored and memorable experience. Personalised upselling goes beyond generic offers, providing guests with options that align with their preferences and enhance their overall stay. Here’s how hotels can achieve this through technology:
- Guest Profiling: Create detailed guest profiles by collecting and analysing data from various touchpoints. Understand guest preferences, past purchases, and feedback to offer upselling suggestions that resonate with each individual.
- AI-powered Recommendations: Artificial Intelligence (AI) algorithms can analyse guest data in real-time to provide instant and relevant upselling recommendations. These recommendations can encompass a range of services, from spa treatments to local experiences.
- Feedback Integration: Incorporate guest feedback into the upselling process. Use reviews and surveys to understand what guests enjoyed during their stay and tailor future upselling offers based on positive experiences.
Improve Guest Experience, Boost Ancillary Revenue
The symbiotic relationship between improved guest experience and boosted ancillary revenue is evident. A positive guest experience fosters loyalty, increases the likelihood of repeat bookings, and encourages guests to indulge in additional services. Here’s how hotels can achieve this synergy:
- Seamless Integration: Ensure that technology solutions seamlessly integrate with existing hotel systems. A cohesive technological infrastructure prevents disruptions in guest services and enhances operational efficiency.
- User-friendly Interfaces: Mobile interfaces should be intuitive and user-friendly. Guests are more likely to engage with upselling opportunities if the process is straightforward and enjoyable.
- Staff Training: Equip hotel staff with the necessary skills to leverage technology for upselling. From front desk personnel to concierge services, a knowledgeable team enhances the guest experience and maximises the potential for ancillary revenue.
- Continuous Innovation: Stay abreast of technological advancements and industry trends. Regularly update systems and adopt new technologies to stay competitive and meet evolving guest expectations.
Use our Free Upsell Calculator to calculate how much additional upsell revenue you could possibly generate for your hotel.
Conclusion
In conclusion, hotels should proactively focus on boosting ancillary revenue to ensure sustained profitability in the competitive hospitality landscape. By embracing technology and implementing personalised upselling strategies, hotels can not only increase their TRevPAR but also enhance the overall guest experience. As the industry continues to evolve, leveraging technology for upselling is not just a trend; it’s a strategic imperative for hotels looking to thrive in the modern hospitality landscape.
