Given the dynamic nature of the hospitality sector, it is imperative that hoteliers remain flexible and open to new revenue opportunities.
Given the dynamic nature of the hospitality sector, it is imperative that hoteliers remain flexible and open to new revenue opportunities.
Hotels are constantly seeking new ways to increase profits in today’s competitive hospitality market. One of the most effective ways to do so is by focusing on ancillary revenue—additional income generated from services or products beyond the basic room rate. In 2022, hotels worldwide generated an estimated $64 billion in ancillary revenue, up from $42 billion in 2021. This growing trend emphasizes the importance of these services and the significant revenue potential they offer.
In this blog, we’ll explore 10 different strategies for hotels of all sizes and types to increase their ancillary revenue through various services. From small inns to large resorts, implementing these tactics will help your hotel thrive in an evolving industry. Let’s delve into the importance of ancillary services in hotels and how they can elevate both your guest experience and bottom line.
Ancillary revenue refers to the money hotels generate from sources other than room rentals. These sources include services like spa treatments, food and beverages, rental equipment, and more. Hotels can increase their ancillary revenue by providing a comprehensive package that includes recreational activities, convenience-driven services, and unique experiences for their guests.
Ancillary revenue has become even more crucial post-pandemic, as hotels look to recover and diversify their income streams. Whether you manage a small inn or a sprawling resort, implementing an ancillary revenue strategy will help your business stay competitive and maximize profits. By getting to know your guests, monitoring market trends, and offering new services, your hotel can tap into additional income sources that complement its core offerings.
Ancillary services are anything beyond the core room rate that guests can purchase during their stay. These services enhance the guest experience while generating extra income. Here’s a list of common examples:
On-site restaurants, bars, room service, catering, and themed dining events.
Hotels offering wellness facilities like spas, massage services, yoga classes, fitness centers, and more.
Meeting rooms, conference spaces, and business services like high-speed internet and audiovisual equipment.
Shuttle services, airport transfers, and partnerships with transportation providers.
Pools, golf courses, water sports, bike rentals, and guided tours.
Upselling premium in-room services like minibars, entertainment systems, and luxury toiletries.
On-site shops offering souvenirs, local crafts, clothing, or specialty products.
Babysitting services, kids’ clubs, and family-friendly amenities.
Organizing gala dinners, holiday events, live entertainment, and seasonal activities.
Laundry, valet parking, pet-friendly services, ticket bookings, and equipment rentals like bicycles and cars.
Here are 10 actionable strategies that can help hotels increase their ancillary revenue:
Collaborate with local businesses or attractions to create promotional offers. For example, a beachfront hotel could partner with a local water sports company to offer discounted rates for activities like surfing or snorkeling. This helps guests enjoy local experiences while providing additional revenue.
Offer curated local tours and experiences. Whether it’s a culinary tour, hiking excursion, or sightseeing tour, partnering with local tour operators or creating your own branded tours adds unique value to guests and increases your hotel’s appeal.
Utilize your hotel’s event spaces to host conferences, weddings, or corporate events. Provide comprehensive event services such as catering, audiovisual equipment, and customized packages to attract event planners.
Promote your on-site restaurant or bar to both hotel guests and external customers. Host themed dining events, offer happy hour deals, or organize culinary workshops with local influencers to attract a broader audience.
Implement a loyalty program to encourage repeat visits. Offer perks like free Wi-Fi, room upgrades, or late check-out for loyalty members. Partnering with airlines or car rental companies can enhance your program, offering additional benefits and attracting more customers.
Create bundled packages combining hotel stays with local services or activities. For example, a hotel near a golf course could offer a "Golf Getaway" package that includes rounds of golf, golf club rentals, and access to golf-specific amenities, all at a discounted rate.
Develop a spa and wellness program offering massages, facials, body treatments, yoga classes, and more. Partner with luxury beauty brands or wellness experts to provide unique experiences, such as personalized wellness retreats.
Enhance the in-room experience by offering premium minibar selections, gourmet coffee machines, and luxury bath products. Smart room technology (personalized lighting, climate control, etc.) can also improve guest satisfaction while generating more revenue.
Cater to business travelers by offering meeting rooms, executive lounges, high-speed internet, and express check-in/check-out. Provide corporate packages that include additional benefits like shuttle services and breakfast.
Upsell higher-priced rooms or premium services, such as suites with ocean views or rooms with jacuzzies. Cross-sell activities like city tours, spa packages, or tickets to local attractions. This increases the average spend per guest and maximizes your hotel’s revenue potential.
Here are some key reasons why hotels need to implement these strategies:
Relying solely on room revenue can limit profitability. Ancillary services provide additional income sources, creating a more sustainable business model.
Ancillary services generate incremental revenue that goes directly to the bottom line, helping to maximize overall profitability.
Ancillary revenue can help offset operating expenses such as utilities, staffing, and maintenance costs, improving the financial health of the hotel.
Thoughtful ancillary services enhance the guest experience, leading to higher satisfaction, repeat visits, and positive reviews.
In a competitive hospitality industry, offering unique ancillary services can help hotels stand out and attract more guests.
Ancillary revenue strategies allow hotels to adapt to evolving guest preferences and market trends, ensuring long-term success.
By offering services for various guest segments (business travelers, families, wellness enthusiasts), hotels can attract new markets and diversify their clientele.
Given the dynamic nature of the hospitality industry, hoteliers must remain agile and open to new revenue opportunities. The potential to boost profitability through ancillary services is vast, and by applying these strategies, hotels can elevate both guest satisfaction and revenue. The availability of these services will depend on your hotel's location, size, and target market, but the key takeaway is clear: Diversifying your revenue streams through ancillary services is crucial for future growth.
So, take a proactive approach to enhance your hotel’s offerings and watch your ancillary income skyrocket. Stay committed to innovation, and set your hotel up for long-term success in a competitive market!
Given the dynamic nature of the hospitality sector, it is imperative that hoteliers remain flexible and open to new revenue opportunities.
Hotels are constantly seeking new ways to increase profits in today’s competitive hospitality market. One of the most effective ways to do so is by focusing on ancillary revenue—additional income generated from services or products beyond the basic room rate. In 2022, hotels worldwide generated an estimated $64 billion in ancillary revenue, up from $42 billion in 2021. This growing trend emphasizes the importance of these services and the significant revenue potential they offer.
In this blog, we’ll explore 10 different strategies for hotels of all sizes and types to increase their ancillary revenue through various services. From small inns to large resorts, implementing these tactics will help your hotel thrive in an evolving industry. Let’s delve into the importance of ancillary services in hotels and how they can elevate both your guest experience and bottom line.
Ancillary revenue refers to the money hotels generate from sources other than room rentals. These sources include services like spa treatments, food and beverages, rental equipment, and more. Hotels can increase their ancillary revenue by providing a comprehensive package that includes recreational activities, convenience-driven services, and unique experiences for their guests.
Ancillary revenue has become even more crucial post-pandemic, as hotels look to recover and diversify their income streams. Whether you manage a small inn or a sprawling resort, implementing an ancillary revenue strategy will help your business stay competitive and maximize profits. By getting to know your guests, monitoring market trends, and offering new services, your hotel can tap into additional income sources that complement its core offerings.
Ancillary services are anything beyond the core room rate that guests can purchase during their stay. These services enhance the guest experience while generating extra income. Here’s a list of common examples:
On-site restaurants, bars, room service, catering, and themed dining events.
Hotels offering wellness facilities like spas, massage services, yoga classes, fitness centers, and more.
Meeting rooms, conference spaces, and business services like high-speed internet and audiovisual equipment.
Shuttle services, airport transfers, and partnerships with transportation providers.
Pools, golf courses, water sports, bike rentals, and guided tours.
Upselling premium in-room services like minibars, entertainment systems, and luxury toiletries.
On-site shops offering souvenirs, local crafts, clothing, or specialty products.
Babysitting services, kids’ clubs, and family-friendly amenities.
Organizing gala dinners, holiday events, live entertainment, and seasonal activities.
Laundry, valet parking, pet-friendly services, ticket bookings, and equipment rentals like bicycles and cars.
Here are 10 actionable strategies that can help hotels increase their ancillary revenue:
Collaborate with local businesses or attractions to create promotional offers. For example, a beachfront hotel could partner with a local water sports company to offer discounted rates for activities like surfing or snorkeling. This helps guests enjoy local experiences while providing additional revenue.
Offer curated local tours and experiences. Whether it’s a culinary tour, hiking excursion, or sightseeing tour, partnering with local tour operators or creating your own branded tours adds unique value to guests and increases your hotel’s appeal.
Utilize your hotel’s event spaces to host conferences, weddings, or corporate events. Provide comprehensive event services such as catering, audiovisual equipment, and customized packages to attract event planners.
Promote your on-site restaurant or bar to both hotel guests and external customers. Host themed dining events, offer happy hour deals, or organize culinary workshops with local influencers to attract a broader audience.
Implement a loyalty program to encourage repeat visits. Offer perks like free Wi-Fi, room upgrades, or late check-out for loyalty members. Partnering with airlines or car rental companies can enhance your program, offering additional benefits and attracting more customers.
Create bundled packages combining hotel stays with local services or activities. For example, a hotel near a golf course could offer a "Golf Getaway" package that includes rounds of golf, golf club rentals, and access to golf-specific amenities, all at a discounted rate.
Develop a spa and wellness program offering massages, facials, body treatments, yoga classes, and more. Partner with luxury beauty brands or wellness experts to provide unique experiences, such as personalized wellness retreats.
Enhance the in-room experience by offering premium minibar selections, gourmet coffee machines, and luxury bath products. Smart room technology (personalized lighting, climate control, etc.) can also improve guest satisfaction while generating more revenue.
Cater to business travelers by offering meeting rooms, executive lounges, high-speed internet, and express check-in/check-out. Provide corporate packages that include additional benefits like shuttle services and breakfast.
Upsell higher-priced rooms or premium services, such as suites with ocean views or rooms with jacuzzies. Cross-sell activities like city tours, spa packages, or tickets to local attractions. This increases the average spend per guest and maximizes your hotel’s revenue potential.
Here are some key reasons why hotels need to implement these strategies:
Relying solely on room revenue can limit profitability. Ancillary services provide additional income sources, creating a more sustainable business model.
Ancillary services generate incremental revenue that goes directly to the bottom line, helping to maximize overall profitability.
Ancillary revenue can help offset operating expenses such as utilities, staffing, and maintenance costs, improving the financial health of the hotel.
Thoughtful ancillary services enhance the guest experience, leading to higher satisfaction, repeat visits, and positive reviews.
In a competitive hospitality industry, offering unique ancillary services can help hotels stand out and attract more guests.
Ancillary revenue strategies allow hotels to adapt to evolving guest preferences and market trends, ensuring long-term success.
By offering services for various guest segments (business travelers, families, wellness enthusiasts), hotels can attract new markets and diversify their clientele.
Given the dynamic nature of the hospitality industry, hoteliers must remain agile and open to new revenue opportunities. The potential to boost profitability through ancillary services is vast, and by applying these strategies, hotels can elevate both guest satisfaction and revenue. The availability of these services will depend on your hotel's location, size, and target market, but the key takeaway is clear: Diversifying your revenue streams through ancillary services is crucial for future growth.
So, take a proactive approach to enhance your hotel’s offerings and watch your ancillary income skyrocket. Stay committed to innovation, and set your hotel up for long-term success in a competitive market!
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