Diversifying your revenue means maximising its full potential and being prepared for the unexpected with a robust earning structure.
Along with the many other things Covid taught us, it also taught hoteliers not to solely rely on room revenue as a source of income. Hotels with multiple streams of income were far more flexible and were able to respond quickly to a drastically changing market. It also improved their ability to take risks and survive the pandemic better than many others.
It may seem daunting but diversifying a hotel’s revenue is not too hard. In this blog, we look at some ideas.
Don’t lose sight of core ancillary revenue.
For decades airlines have sold ancillary products such as better seats, extra bags, extra meals etc. for a cost. It is about time hotels look at their core services and amenities as chargeable opportunities. Better rooms, spas, F&B etc. can all become revenue earners. With the right booking and distribution technology, you can easily upsell these amenities. Within the ancillary revenue stream, rooms with views or additional amenities can easily be priced up. Showing a floor map and allowing guests to select their preferred room (Much like an airline seat map) could make bookings simpler and increase the opportunity to earn additional revenue.
Expand your audience.
If you have previously been focused on international or national tourists, look closer to home at staycationers. Locals offer opportunity to buy into your amenities, F&B and more.
Monitise all your space.
If we were to ask you about your RevPAR performance, it probably wouldn’t take very long for you to find the latest numbers. But how about your RevPAM?
Revenue per available meter squared is a holistic metric that will tell you more about how effectively you’re using all the space in your property. There are almost endless ways to monetize all of the unused (and used) space in hotels, but the thing to remember is to do what fits with your brand and vision for hospitality. You can get really creative (pop-up barbers, cookery classes) but as a starting point, consider the following:
- Parking spaces
- Event spaces (weddings, exhibitions, work team building)
- Day-use hotel rooms (sold by day or by hour)
Attract and delight long-staying guests.
Guests who stay longer at your hotel will be in need of more facilities like a workspace and somewhere to eat – perfect cross-selling opportunities to further diversify revenue.
Invest in F&B.
Building a restaurant or bar in-house is perhaps the most common way to tap into revenue. F&B can be built into packages for guests pre-arrival, encourage loyalty to the eatery or even expanding your restaurant’s reach outside by registering on a delivery app.
Create a voucher scheme
For future stays or activities is a low-fuss option for additional revenue. Driven by the move towards experiences over things that we just mentioned, more and more people are gifting experiences to their loved ones – gift vouchers fit in perfectly.
Partner with artists.
Where suitable partnering with local artists and creating a gallery of their work can be a revenue opportunity. Firstly, it will integrate your space with the local community and attract more people through the door. It will also impress your guests and add a unique point of interest to your space.
Create and sell co-working spaces
For out-of-towners, digital nomads and local entrepreneurs who do not want to be tied down by office leases. Create Room and Office daily, weekly and monthly packages and promotions, including WiFi, coffee, bottled water, snacks and catered lunch.
To conclude
There are plenty of ways to diversify your hotel revenue. Not all of them will work for your hotel, but focusing on two or three that best fit your goals will likely boost your cash flow, revenue and guest happiness.
