Are we entering the "Ancillary Revenue Revolution" in the Hospitality Industry?
The above question was asked recently to the panel of experts, members of the WorldPanel by HospitalityNet.
Here is my take:
Airlines have perfected ancillary revenue strategies and hoteliers should study and learn from the airlines best practices in this respect.
Airlines' ancillary revenue ranges anywhere from 20 percent of total revenue for major airlines to 50 percent for low-cost carriers. According to IdeaWorksCompany, ancillary revenue totalled nearly $110 billion globally in 2019 and, despite dipping considerably in 2020, garnered more than $50 billion that year, rising to $68 billion in 2021. Most notably, ancillaries increased as a share of total global airline revenue in both pandemic years.
Actually, in 2020 for the first time four low-cost carriers — Allegiant, Spirit, VivaAerobus, and Wizz Air — generated more ancillary revenue, or income beyond standard airfares, than they did revenue from ticket sales.
There are significant revenue opportunities outside of room revenue and room upselling and upgrading:
1. Make your property the “hero of the destination”:
Bundling rooms with local places of interest into attractive hotel packages offers significant revenue opportunities. Hoteliers know their destination, local attractions and places of interest better than anybody else. This is where hoteliers can truly outwit the OTAs and Airbnb, and provide real value to their customers.
You can position your hotel as the “hero of the destination” by launching packages, special offers and campaigns that promote a more unique, local experience, such as places of interest and activities, tickets to local attractions and sporting events, local dining, local pub crawls (in future better times), visits to hidden boutiques and local hangouts, and complimentary passes for public transportation or Uber passes. Introduce “live like a local” messaging in your marketing efforts.
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Even simple things like selling tickets to sought after museums or museum passes at the front desk or via the concierge can generate significant revenues. By buying museum passes at the front desk of my hotel in Paris I beat what was a minimum of three hour line to purchase museum tickets at the Louvre. The hotel was smart to promote this service on their website!
Do you offer hotel packages and bundled services to target your local, short-haul and drive-in feeder markets, such as:
2. F&B Ancillary Revenue:
Open to both hotel guests and locals, F&B can bring significant revenues to any full-service hotel. A few things to consider:
3. Meeting Facilities and Hotel Spaces:
Opening the empty meeting facilities and hotel spaces to local customers and businesses can unlock great revenue opportunities.
Founder & CEO at ExpectMe | Hospitality Tech Entrepreneur | Driving 'room selection' within the hospitality industry 🔥
2yHi Max, once again interesting insights from you on this topic. There is a lot of potential for our industry to discover and boost the overal guest experience 💪.
Strategic Advisor – Hospitality Solutions
2yHello Max, all your "Hero of the destination" opportunities require access to a Tickets & Experiences digital inventory. Check out our platform Globick, a platform flexible both on who is integrated with you and how.
Available / Looking for a new role
2yBrilliant advice for #hoteliers and their #revenuemanagement execs.
#beguestprofitable #beguestefficient with @Cookiebite, @UP2 and @Beehive Hospitality
2yThe good news is - we have technology that is there to drive the focus of ancillary!!! UP2 | Upgrade2
Magazzn (Magazines, Reports, Newsletters), ConciergePro (Guest Experience), ManualPro (Product User Guidelines)
2yGreat idea to position the hotel as the 'hero of the destination' ... Local partners, restaurants, venues, attractions etc not only appreciate the heads up to guests, it works both ways - they can reciprocate with recommendations to patrons. Add a curated list of local partners, contacts and directions in app, then enable these local partners to add vouchers and promotions direct to guests via the app. No 'data' sharing necessary. It's something we've added recently to ConciergePro.