Independent hotels often operate with a unique charm and personalised touch, setting them apart from larger chains.
However, they also face challenges in competing with the extensive marketing and brand recognition of larger, international players. Ancillary revenue becomes a creative and strategic way to level the playing field by leveraging the uniqueness of an independent hotel while also generating additional revenue from a loyal audience.
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This is why ancillary revenue is nearly always part of a successful revenue management strategy that produces consistent year-on-year results, avoiding stagnation. The more revenue you have streaming in, the more flexibility you have to make improvements to your hotel and offer guests new or additional exclusive services. It’s a virtuous cycle.
Ultimately, implementing ancillary revenue ideas will lead to a more fulfilling experience for the guests who accept them and flood your hotel with a whole new source of revenue.
Before you employ any ideas you need to ask three questions:
- What is unique about your hotel – the setting, the geographical location, the theme?
- What do guests praise the most – the amenities, the restaurant, the convenience?
- Why do they choose it over others – for luxury, for service, for other features?
Once you start to analyse these questions, you’ll start to see opportunities for extra revenue arising from the story of your hotel.
Hotel ancillary revenue examples
Ancillary revenue comes in many forms, with hotels of all types and descriptions finding new ways to generate revenue from services and add-ons. Large or small, hoteliers can take inspiration from the below examples to build their own strategy.
- Food and beverage services: From elegant on-site restaurants to casual cafes and bars, food and beverage services offer guests the convenience and pleasure of dining without leaving the hotel. Room service adds an extra touch of luxury, allowing guests to enjoy meals in the comfort of their rooms.
- Activities and tours: Many hotels collaborate with local tour operators or even host their own activities, such as cooking classes, wine tastings, or guided hikes. These experiences allow guests to explore the local culture and attractions, adding value to their stay.
- Transportation: Offering shuttle services to airports, nearby attractions, or shopping districts can be a significant convenience for guests. Some hotels even provide luxury car rentals or chauffeur services for an elevated experience.
- Events or meetings: Hosting events, conferences, or meetings can be a lucrative revenue source. With well-equipped meeting rooms and banquet halls, hotels can cater to both business and social gatherings, providing catering, audio-visual equipment, and coordination services.
- Merchandise: Gift shops or boutiques within the hotel offer guests the opportunity to purchase souvenirs, local products, or even branded merchandise. It’s a way to extend the hotel’s brand and provide guests with tangible memories of their stay.
- Entertainment options: From live music in the lobby to movie nights by the pool, entertainment options add a fun and vibrant atmosphere to the hotel. Some hotels even host art exhibitions or cultural performances, enriching the guest experience.
- Pet friendly services: As more travellers choose to vacation with their pets, pet-friendly services such as pet-sitting, grooming, or special pet menus can set a hotel apart. It’s about extending hospitality to the furry family members as well.
- Parking and valet services: Offering parking facilities, especially in urban areas, is a practical necessity. Valet services add a touch of sophistication, making the arrival and departure process smooth and hassle-free.
While these are tried and true examples that have been successful for many hotel chains, creativity can be key to stand out in terms of ancillary revenue options. Don’t be afraid to go weird, wonderful, or wacky – ultimately, it’s the unique experiences that stand out the most in the market, even for guests who ultimately don’t indulge in that specific activity. At the very least, it captured initial attention.