Locals can drive ancillary revenue at hotels

Locals can drive ancillary revenue at hotels


Hoteliers have numerous opportunities to lure nonguests to their property in hopes of generating extra ancillary revenue.

“It’s become a nice way to augment the slow periods,” said Kory Keith, spa director at The Ritz-Carlton Spa in Los Angeles, where locals take advantage of daylong wellness retreats and after-work pedicures and cocktails in the adjacent beauty salon.

When Keith took the reins in 2012, Los Angeles natives comprised about 25% of the hotel’s spa business. The secret? By keeping the spa-treatment list fresh (and even seasonal—some of its facials use herbs and fruits from the hotel’s rooftop garden), she has increased that ratio to 50/50.

“Local guests don’t want the same offerings all the time,” she said.

Revenue centers

While lucrative and popular, nonguest revenue doesn’t need to be limited to spa treatments, said Jon Makhmaltchi, owner of hotel branding and consultancy firm J.MAK Hospitality.

He cites Cavallo Point Lodge for its popular cooking school at its San Francisco location. He also credits its sister property, the Post Ranch Inn, for its sought-after boutique, the Mercantile.

“It’s a great shopping experience with great local items—not just hotel-branded material,” Makhmaltchi said, adding that the Mercantile is also close in proximity to the hotel’s art gallery.    While at the Post Ranch Inn, nonguests must specifically request to visit the Mercantile.

At Cavallo, “they don’t go up to people and say, ‘We’d like to see your room key,’” Makhmaltchi said.

(He is especially turned off by this, he said, recounting a story of a rooftop bar at a posh New York City hotel asking to see his reservation before taking his drink order.) The Mercantile hosts wine tastings for guests and nonguests, too, seeing it as an opportunity to plant a seed. “They have a couple glasses of wine,” Makhmaltchi said, “and it could turn into a stay.”

Megan Licata, marketing manager of Hyatt Regency Orlando in Florida, said the hotel’s partnership with the ever-popular ClassPass since December 2014 means locals can frequent its fitness center and take classes such as spinning or yoga.

“It allows you to fill only the space you need—which means it’s not just filled with nonguests,” Licata said. “It’s great for slower weeks, too, or when certain guests will not have time to take advantage of these facilities.”

Marketing to locals

Licata said fitness-inspired social events like Wine & Align—to which the hotel invites well-connected tastemakers and bloggers—are key in marketing to nonguests.

“This has really boosted local traffic,” Licata said. “Locals talk to people who are here for conventions, and hotel guests enjoy getting their recommendations.”

As for the Ritz-Carlton, Keith said offering a free, Saturday morning rooftop yoga class for anyone with a spa treatment booked that day has proven more effective than print advertising.

Like the Hyatt in Orlando, Keith said the Ritz-Carlton is “a business hotel Monday to Friday, and guests usually have a lot of meetings or conventions scheduled,” meaning little to no time to spend money onsite.

To encourage more locals to visit during those times, the Ritz-Carlton’s Local Luxury Program offers a discount on spa treatments from Monday through Thursday to guests who can show proof of Los Angeles residency.

Licata said the Hyatt Regency further boosted its nonguest traffic by reaching out to trendy fitness studio Pure Barre, placing a 10% spa discount coupon in several studios.

“That led to a good spike in attendance,” she said. Though she estimates only five to 10 visitors to its fitness studio each week are nonguests, she insists that number is fine.

Read full article at: Hotel News Now