What is Ancillary revenue
Ancillary revenue is income that a hotel obtains from selling secondary services. Many hoteliers underestimate the money-making potential of their facilities or simply do not know how to tap into it. Around 70% of hoteliers said that they have no tools for effective AR management (according to Eyefor Travel survey).
by Revenue Management Systems from 2014 to 2017
The statistics clearly show that now guests want more than just a hotel room. Ancillary revenue in the hospitality industry has increased due to high consumer demand.
But how to tap into this growth potential? How to measure current upselling performance? How to turn services into revenue booster? 71% of respondents do not have answers or any effective tools to handle it.
But we do. Make all your services instantly available to clients through Hotel Guest App. Create deals, analyze sales data, generate reports, process payments, communicate with guests directly - all with a few clicks. And see your revenue grow every day.
In the meanwhile, ancillary services can contribute around 20% to a hotel's bottom line. And often it is not only about building a meticulous revenue management strategy but also about having the right tools at your disposal to implement it.
Below you can find a few ideas on what can be sold and how it can be done in an effective and guest-friendly way.
1. What to sell
There are so many ancillary revenue opportunities in the hotel. With the right approach, you can make money out of air. But before we dwell upon tools, let's have a look at what might be popular with guests.
Hotel facilities and environment
You have already invested money into your restaurant, spa, conference hall, and it is high time you get a return. What are the other unique advantages of your property? Is it located close to a wild nature reserve, surrounded by picturesque forests, organic farms, or vice versa, is in the city center bustling with life?
Your hotel is more than just a room. People strive for experiences, and you can create and offer them to green tourists, families with children, clubbers or business travelers, depending on the DNA of your hotel.
You must have already been in business relations with local cleaning, laundering, catering or tech support companies, etc. So it won’t be hard to partner with museums, theaters, tour guides, ski rental services, theme parks, etc., - you know your guests and what can be interesting and relevant for them.
It is a win-win approach: your hotel gets a commission fee, providers get more clients, and guests are happy they are really cared for.
With just a little effort, you can form a unique Digital Service Card that will be highly appreciated and remembered by clients.
2. How to sell
Awareness and tools
For some people, appetite comes with eating - they are not ready to order anything on the stage of booking a room. Others, on the contrary, prefer everything planned and booked in advance - from meals to the airport shuttle. And now we come to the most important part - how to sell services to these two different groups in a non-annoying way, having their comfort and satisfaction in mind. For the first one, a smart way to interweave ancillaries in the client experience is to let them see your services exactly when they need it and make them instantly accessible.
For instance, capture the clients’ attention with a poster featuring a juicy steak or a beautiful spa treatment while they are taking the lift to their room. However, it is not enough, the guests may forget about it as soon as they reach their room. And paper booklets at the bedside table are something really old fashioned. The solution is to put QR codes so everything can be booked or ordered with a few clicks through your hotel's mobile app. You still don't have one? That's something that needs to be fixed as soon as possible - even McDonalds, whose service is already speedy, understand the value of the moment and launched an app for ordering food. Apparently, it is a major global tendency - being digital and uncompromisingly fast.
The same tool - a mobile app - can be used to reach the second group of people who know what they want in advance. These can be, for instance, business travelers, who cherish every moment, or families with children, for whom chaos is a mood killer. Allow them to select meals and services from a digital menu, choose the time and delivery zone, and go pack with peace of mind, knowing that everything is fixed.
Another way to promote your great services is through upselling incentives, for instance, instead of booking a standard double room, the client may be offered to book a double with a lake and forest view and a get a free massage or a bottle of local wine as a gift. It is very likely they will order a second session and another bottle.
As for cross-selling branded hotel goods, chocolate and wine, cosmetics at a spa, etc., the possibility to flip through a digital menu with excellent photos, info and prices work like magic with people’s impulse to buy on the spot. Tested and confirmed by airlines, for which selling ancillaries constitute a big part of total revenue.
People who are not your hotel guests are a target audience for offering many of your hotel facilities. Businesses need your conference halls with catering for organizing events, couples need your restaurant for weddings, everybody needs your gym and swimming pool. All you have to do is to market all these in social media, in partner establishments, everywhere. And the above-mentioned QR codes, which let people book the services and meals and pay for them in a mobile app on their smartphone, are the shortest bridge to purchase.
Bundles and Seasonality
Romantic, adventure, family, birthday, wedding - the more packages you have, the wider your outreach is. Apart from a room stay, offer such add-ons as champaign, flowers, chocolates, spa treatments, excursions, visits to theme parks, etc. - the possibilities are virtually unlimited. And a discounted price is what makes such offers irresistible.
Obviously, the season is also something that influences the demand for different ancillary services. It is important to use a modern and transparent system to be able to track all the fluctuations and to adjust your upselling and cross-selling strategy to client needs.
HotelFriend Solution for Ancillaries
Our Concierge App has all the powers to turn your hotel services into a lucrative income source. It creates the right touchpoints with guests and non-guests for the best consumer experience possible. You can sell what you have in your property, create packages, seasonal deals, and present them in the most attractive way. The system is instrumental in creating a guest database, which allows exploring client preferences and customizing offers. Payments with an in-app virtual mobile POS is another innovation we are proud of.
It is a profit-machine, designed to impress clients and win their loyalty. Check it out now!
Public relations: Stephanie Moench