A systematic approach to monetize new hotel offers

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There is no doubt that hotels today still rely heavily on occupancy to generate non-room revenue in their properties. However, more than ever, owners, franchisees, CEOs and management companies are placing more emphasis on new potential revenue opportunities and spaces such as hotel gyms, meeting rooms and oversized lobbies. which do not have a positive impact on the results.

When approaching these spaces as a hotelier, there are a number of important things to consider.

The first step: understand how you will measure your success

First of all, as conversations approach monetizing new hotel deals, it’s important that everyone in the business speaks the same language and that you are guided by a consistent criteria from the start.

I have long encouraged our industry to move away from the RevPAR (revenue per available room) approach to measure the overall performance of hotels. Taking a TrevPAR (total revenue per available room) approach or the less room-centric RevPAM (revenue per available meter) approach are two ways to provide a more holistic view of your business performance.

While a RevPAR approach works for budget or simple accommodation concepts, it does not take into account the many factors that come into play in calculating the net operating income of more complex hotel businesses. Conversely, the advantages of adopting a TrevPAR approach (i.e. dividing the total turnover of your operation by the number of rooms available) are numerous.

First, it helps to have a clearer picture of how the entire business is performing, across all departments, which is important when looking to monetize new offerings, and second, it opens up the business to a deeper level of data analysis. For example, being able to see which geographies and customer segments (for example, French families) generate the most total income throughout their stay, will allow you to better understand who you are best served to sell to. and how your pricing should be varying throughout the year.

For another perspective, and for those looking to maximize the use of previously dead and less used space within their property, a RevPAM approach is useful in giving you a breakdown of how certain areas of your property can. be better maximized, by the meter.

Being aligned with measurement is key to being able to define the success of the new initiatives you implement, beyond room sales and across all departments.

Make a decision on what to offer

For owners and managers, there are three guiding principles to follow when making a call about what new offering to monetize and / or how to best use the space your business has:

  1. As a first step, it’s important to think about your ideal customers, and to be clear about the segments you want to attract, with a long-term view. A cohesive community is the key to increasing average spend, and you want to create spaces that your target segment is willing to use and feel comfortable in.

    Around the world, a number of companies are creating venues that are carefully designed for specific segments. One SiteMinder client, edyn, for example, has been successful in attracting clients who are looking for the “whole property” experience – not just a bed. Their apartment hotel concept, Locke, aims to create an urban sanctuary for guests, connecting them to the local community, both through the way their buildings are designed, but also through yoga, musical performances and product launches offered to customers. With this example in mind, hoteliers are increasingly finding that this community driven customer segment is growing and that connecting with the local community in a creative way is a good way to generate more traffic. It’s important to note that it’s no small feat if fully embraced, however, and the companies that do this most successfully are the ones that build their entire brand around creating a sense of community. and connection in their property.

  2. Once you have your ideal customer in mind, it’s time to explore the range of possibilities available to your business. For many, who have a fixed priority on what they would like to create, say, an updated lobby bar, this will be a simpler process. However, for others with a blank canvas, this period offers an opportunity to be daring and creative, as the potential may exist in hallways, lobbies, unexpected parts of hotel rooms, or through technology initiatives that don’t. require no space.

    For those looking to reuse unused aspects of their hotel, the possibilities are vast. Can an old meeting room be turned into a small movie theater that provides comfy chairs and popcorn for small groups? Can you create a game room specially designed to provide a unique virtual reality experience? Can you respond to digital nomads by offering them an inspiring coworking space? Can you turn unused rooms into purpose-built private dining rooms that provide guests with a socially distant experience from their bedroom? Or, can you partner with local artists to display authentic prints, statues, and light fixtures that can then be sold to guests?

    There is a wide range of creative approaches that hotels have taken successfully during the pandemic, so it’s all about understanding what’s possible and knowing the practicalities to bring your idea to life.

  3. It is important to be clear about your competition and to start thinking about your competitive advantage when defining your ideal customer and the new product or service that you are looking to monetize. Does your specific building open up unique opportunities for you? Is your location missing anything you could offer guests? Or, have you ever established relationships with local community partners that could be further exploited than your local competition does not have?

    When developing your offer, traditional competitors can also be considered as potential collaborators. If you had a large cinema space but didn’t have a licensed bar, for example, could you do a cinema and drinks package together? Choosing to work with those you have traditionally competed with can be a powerful decision to make.

Help customers monetize your new offering
Finally, once you’ve created the offer, experience, or space you’re looking to monetize and know who your ideal customers are, it’s important that you have the right approaches and tools to find them. and convert them.

This includes:

1. Support your customer acquisition strategy with technology solutions that allow you to open up your platform, be flexible and save time.

For example, if you are looking to build a network-wide campaign around a new deal or one that has been established, do you have a technology partner that allows you to do it in an efficient and streamlined way? or will it take days for your people to implement and modify? Ensuring that you have a central and single way to manage your properties is key to ensuring not only efficiency, but a consistent brand experience as well. And, of course, while monetizing new deals or ideas is important, don’t forget how critical it is to make sure this is set up for your rooms first.

2. Reflection experience. How can what you offer and the way you sell it come together into a great experience for your guests?

Increasingly, due to long bottlenecks and pent-up travel demand, the hotels that create the most definable moments for their guests are the ones being rewarded. Being ‘Instagrammable’ is (for better or worse) the way hotels should think about their experiential offerings today, given the heightened level of influence that friends, family and those with significant numbers of people have. online subscribers have it on where people choose. to stay.

3. Offering personalized marketing campaigns that show you understand your customers is an increasingly important way to retain and retain your hotel.

For example, by retargeting previous customers who you know have appreciated what you’ve provided them in the past, with a targeted opportunity, you can ensure that your new offering is known and experienced by those you already have. a connection established. with.

4. Finally, bring your staff with you throughout the trip when looking to monetize any new offers.

By educating your staff to know what the new offering or service your hotel is offering, they can cross-sell and promote to your customers with more accuracy and confidence.

When looking to monetize a new offering, it’s essential that you speak the same language across your team in terms of measurement, do a lot of upfront homework, and choose the right partners to work with, to ensure that its implementation is also transparent and painful. -free of charge possible. On a technical level, this means ensuring that you have a strong and open trading platform, and that your tools not only provide you with the agility you need to support your growth ambitions, but also prepare you. for greater total profit in the future.

On all fronts and at all levels, whether practical, creative or technical, bringing a new money-generating offer to life is an exciting process for hotels, which works best alongside partners in whom you have great trust and deep mutual respect.

Good luck.

About SiteMinder

In an age of increasing choice and accessibility for curious travelers, SiteMinder exists to unleash hoteliers with technology that makes all the difference. SiteMinder is the leading customer acquisition platform for the global hospitality industry, ranked among technology pioneers for its smart and simple solutions that place hotels wherever their guests are, every step of their journey. It is this central role that has earned SiteMinder the trust of more than 35,000 hotels in 160 countries to generate more than 100 million bookings representing more than $ 35 billion in hotel revenue each year. For more information, visit www.siteminder.com.


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