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How to Increase Your Hotel Ancillary Revenue

How to Increase Your Hotel Ancillary Revenue

Airlines and cruise lines have been doing it very profitably for years. Now hotels are finally recognizing the lucrative potential of ancillary revenue opportunities. A study from Cornell shows that revenue management systems (RMS) are moving beyond techniques focused solely on room rate optimization. And today’s cloud-based RMS allow hotel operators to apply the same RM principles to non-room revenue sources. However, with half of hotels still not measuring any type of ancillary revenue, its beneficial to examine specific ways hoteliers can tap into this lucrative revenue stream.

Maximize Room Features

Guests often place higher value on certain room features such as balconies, ocean views, floor level and room location. Use your RMS to optimize pricing for rooms with more in-demand features. You can also increase upsells within the booking process by featuring side-by-side room comparisons with incremental pricing. For example, promoting a junior suite as just “$45 more” sounds more appealing than stating it’s “$425 per night.”

Pre-stay Promotions

Once your guest has booked their reservation, send a pre-stay email offering relevant value add-ons. A business traveler may appreciate the offer of a limousine pickup, families may desire family-oriented activity packages, and many guests will gladly pay a nominal fee for an early check-in/late checkout bundle. A personalized pre-arrival email removes any guesswork by directly asking guests if they have any specific needs during their stay.

On-site Offerings

Once on-site, satisfy your guests’ need for instant gratification and capitalize on impulse purchases by presenting offers via mobile technology. With the swipe of a fingertip parents can book a hotel-provided babysitting service and make dinner reservations for two. Or individuals can book a session with a personal trainer. You can also send mobile notifications about added value items such as revenue-lifting breakfast offers or spa treatments. Once at their destination, travelers are equally motivated to make purchases for products and services

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