Ancillary revenue has for some time seemed like the Holy Grail to those of us in hospitality. Prior to Covid, when occupancy could not get much higher, there was still pressure by owners for increased revenue. During Covid any revenue was more than welcome, and now, as we have come out of the pandemic, there is pressure to make up for more than a year of lost revenue
The opportunity to generate much welcome Ancillary Revenue is now greater than ever.
Ancillary Revenue for hotels falls into two general categories, on-property and 3rd party. The on-property revenue comes from increased business for the property’s F & B, fitness facilities and retail shops, as well as lucrative “found revenue” from room upgrades and fees for early check-in and late check-out. 3rd party revenue comes from sending guests offers for local tours and activities, theater and sporting event tickets, transportation and car rentals, and local attractions. The data generated from industry groups like ARIVAL, show that the average leisure traveler will spend over $300 per person on tours, tickets and activities during a 5 day stay. Currently hotels are getting little or none of this revenue, nor the good will associated from these experiential activities
Per the reference to the “Holy Grail” above, success in generating Ancillary Revenue has been elusive. There are several reasons for this. Hotel staff are perennially busy (and even more so now) and with the near extinction of the formal concierge desk, there is seldom enough staff or resources to identify, negotiate, promote and book tours and activities. Further, until now, there has not been an effective way to promote on-property F & B, and other facilitates, not to mention nearby attractions, shops and activities. Absent problems, there has historically been little or no contact with guests after they have checked in. What is needed is enhanced guest engagement, more relevant segmentation of offers, more seamless mobile transaction capability and expanded in-stay contact.
The Venuelytics platform of guest facing solutions can pave the way to an effortless and lucrative stream of ancillary revenue. 2-way Guest Messaging can engage your guests prior to arrival, upon arrival, and during their stay (a longer “booking window”) and is the ideal, non-intrusive, way to stay in touch and send on-property offers as well as offers for attractions and activities outside and around the hotel. VenueLytics 24/7 AI Concierge can manage these offers, provide automated responses to questions, and either handle the purchase transaction and fulfillment, or the send out coupons for specials and discounts. To provide a near turnkey Ancillary Revenue solution for hotels, VenueLytics has also partnered with tour and activity providers in virtually all visitor and business travel destinations worldwide
(And, leaving ancillary revenue generation for a minute, both of these VenueLytics modules, 2-way Guest Messaging and the 24/7 AI Concierge also reduce calls to the front desk, add operational efficiency and reduce staff time!)
We have talked about missed revenue, but equally important, is making the guest’s stay a memorable and enjoyable one. Encouraging them to dine at the property’s F & B establishments and providing offers to the popular and fun activities in the area makes for happy guests… and happy guests are the most likely return guests!
So, don’t leave any more money on the table!