According to PhoCusWright, in 2011 U.S. hotels sold approximately US$1.85 billion in ancillary products and services, which accounted for 1.7% of the country’s total hotel revenues – when compared to the airline industry’s total of $12.5 billion (12%) in ancillary revenues in the same year.
All in all it points to the fact that hotels are substantially underselling their add-ons; a wasted revenue opportunity.
However, the selling of ancillary services within the hotel industry has always been a bit of chore and in many cases are still often overlooked. It’s never quite been a priority and always seems to feature last in the pile when it comes to the long list of check-in items that a front desk agent has to go though with the guest on arrival.
A lot of the times, the selling of ancillary products and services can come across as a mediocre bid to squeeze a bit more money out of the customer – which doesn’t do much for guest satisfaction just as they are about to begin their stay!
Findings from a more recent report by EyeforTravel (Ancillary Revenues in the Hospitality Industry) were inline with PhoCusWright i.e. Many hotels are still not yet grasping the significant revenue opportunities obtainable to them by the selling of ancillary products and services. In order to be successful, recommendations from their report included that:
- Hotels need to be flexible and relevant and take a data driven approach that is based on customer needs
- Loyalty data should be scrutinised and combined with previous consumer spend/ transactional data
- Mobile should be considered as the upsell technology of choice to help identify which goods to sell at the right time
- Hoteliers need to take a holistic approach. It’s not just about in-room revenues but managing inventories across the hotel and a on every channel
While it has not always been easy to make ancillary sales, with the advancements in cloud, data and mobile technology, implementing and exploiting the said recommendations has never been easier.