Are outdated technologies preventing your hotel from meeting guest expectations and maximizing profitability? In the hotel industry, profitability is increasingly influenced by a variety of market changes, including the introduction of new technologies, shifting consumer preferences, and fluctuating operational costs.
NB: This is an article from APS (Above Property Services)
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In response to these challenges, the industry is turning towards innovative pricing strategies, with Attribute-Based Selling (ABS) (also known as Attribute-based Pricing) emerging as a notable trend.
Research from the Hotel Electronic Distribution Network Association (HEDNA) suggests that hotels implementing attribute-based pricing can see a revenue increase of 10-20% and a 10-15% boost in repeat bookings. Hotel Business reports that over 60% of hotel guests are more likely to book additional services when presented with attribute-based pricing. Furthermore, studies indicate a 25% increase in guest satisfaction, with a significant majority of guests expressing a preference for personalized package options.
This pricing model marks a revolutionary shift in hotel revenue strategies, allowing hotels to monetize a wide range of features and amenities, thereby offering guests more choices and opening up new revenue streams. The key to success in this endeavor is the effective utilization of modern technology, which enables hotels to create personalized packages and upgrades tailored to individual guest preferences.
However, legacy hotel technologies often constrain the transition to attribute-based pricing. Traditional systems are usually geared towards managing room bookings and lack the flexibility to implement dynamic selling strategies. This limitation makes it difficult for hotels to monetize additional services or products effectively. Moreover, these outdated systems typically struggle to integrate with modern solutions that enable attribute-based selling, hindering hotels from leveraging real-time data and market conditions to optimize pricing.
The benefits of implementing attribute-based pricing in the hotel sector are extensive. It allows hotels to offer personalized pricing options based on their rooms’ and services’ specific attributes or features, catering to different customer segments and needs. This level of customization can significantly enhance guest experiences, leading to higher conversion rates, and enables hotels to differentiate themselves by highlighting unique features.
For example, hotels can enable guests to choose their preferred view, floor level, or room amenities for an additional cost. Guests can customize their stay with add-ons such as late check-out, access to exclusive facilities, or premium services. They can choose from various add-ons, such as breakfast, Wi-Fi, access to the executive lounges, or a range of room features, such as preferred bedding, in-room entertainment options, or additional services like spa treatments. And thinking outside the box, almost anything can be monetized, including activities, prepaid parking, and food and beverage credits.
By pricing these attributes separately, hotels can capture additional revenue from guests who are willing to pay for these extras. At the same time, it creates a perception of value for money, fostering loyalty and encouraging repeat business, which is crucial for long-term revenue growth.
To optimize attribute-based selling, a modern system must have the bandwidth and flexibility to operate like a shopping cart, use data for marking, easily connect with other platforms, and leverage the latest advancements in architecture and AI/ML. Most hotel systems just can’t do it. APS was built from the beginning to personalize offers using data from inputs such as AI/ML models and is so well architected that it has the flexibility to meet the needs of any hotelier.
APS® (Above Property® Services) lets hotels personalize their attribute-based selling strategies. Utilizing guest data and preferences stored in the system allows hotels to offer tailored attribute packages to individual guests. For example, if a guest has previously shown a preference for spa services, the hotel can create a personalized package that includes spa treatments and other relevant attributes. This level of personalization can enhance guest satisfaction and drive additional revenue for the hotel. The system provides the tools to easily define, update, and communicate these attributes to potential guests, making the pricing process more efficient and effective. It also opens up opportunities for upselling and cross-selling additional services or upgrades, further boosting revenue per customer and enhancing the overall guest experience.
APS offers centralized data and analytics capabilities, enabling hotels to gather and analyze data from various sources to identify trends and preferences. This platform enables personalized attribute-based selling strategies and facilitates integration and distribution across all channels, expanding the reach.
At the end of the day, while transitioning from legacy systems presents challenges, adopting attribute-based pricing strategies supported by modern technology offers a promising avenue for hotels to innovate, enhance guest experiences, and increase profits in a competitive market.