Diversification of Hospitality Revenue Today
Hotel revenue diversification is a key strategy for hotels to survive and thrive in the post-pandemic era. Learn how to leverage new technologies, markets and opportunities to boost your hotel revenue management and customer satisfaction.
Gone are the days when hotels and resorts solely relied on room rates to generate revenue. By diversifying revenue streams, hospitality businesses can reduce their dependence on a single source and open doors to new opportunities, tap into previously untapped markets and customer segments.
In this blog post, we will share some tips on how to diversify your revenue streams in hospitality and boost your bottom line.
Increasing presence of online merchandise and gift shops
Develop an online merchandise store or on-site gift shop where guests can purchase branded items, local souvenirs, or unique products related to local destinations. There are some ways that hospitality businesses can make the most of this opportunity.
- Curate unique products: Offer a selection of merchandise that reflects the hotel’s brand and captures the essence of the destination. This can include items such as branded apparel, accessories, home decor, local artwork, and gourmet products, etc.
- Promote Special Packages and Bundles: Hotels can offer a “Stay and Shop” package that includes a discounted room rate along with a gift card or exclusive merchandise.
- Personalize and Customize Products: Offer customization options for certain items. This adds value and creates a personalized shopping experience for guests.
By integrating the store into the guest experience and offering exclusive perks, hotels can enhance guest memorable shopping satisfaction while generating additional income.
Expanding F&B deals
Another way to diversify your revenue is to adopt dynamic pricing strategies. This can help hotels drive incremental revenue by capturing different segments of customers with different price sensitivities.
Additionally, investing in F&B quality and variety so as to create a unique and memorable dining experience such as special menus, live entertainment, local or seasonal dishes.
For example, you can offer prix-fixe menus for a set price during peak hours or seasons, which will help drive average check. You can also highlight certain entrée additions or upsell items on the menu for an additional charge. You can also manage the time customers sit at their table to maximize the number of turns during service.
Provide spa & wellness related offers
People these days are more health-conscious in terms of both physical and mental health. Therefore, hotels offer health and wellness-related deals like yoga, massages, or aromatherapy that can enhance customer experience as well as boost incremental revenue.
Meliá Ba Vi Mountain Retreat is a good example of showcasing a true wellness lifestyle by offering meditation and holistic wellness retreats. Additionally, guests can indulge in a culinary experience like no other, where every meal is a celebration of local flavors and the freshest ingredients.
Partnering with local businesses
As a hotelier, it is important to attract and retain customers in a competitive market. Offering something unique and valuable to your guests can help to stand out among competitors. Also increasing your cross-selling and upselling opportunities
Partnering with local businesses or attractions that can offer exclusive discounts or benefits to guests such as museums, local tours or amusement parks, etc. This does not only enhance guest experience and satisfaction, support the local community but also align the hotel’s brand with the local culture. Overall, it creates a win-win situation for both parties.
The Sofitel Legend Metropole Hanoi, which partnered with local attractions and tours to offer cultural and historical experiences to their guests, such as a cyclo tour of the Old Quarter, a visit to the Ho Chi Minh Mausoleum, or a cooking class
Diversifying revenue streams in the hospitality industry is not only a smart move but also a necessary one in today’s competitive market. It helps create multiple sources of income for hotels and improves financial performance. However, when diversifying services, it is important to avoid focusing on all services that may not align with the brand’s strengths. Instead, prioritize enhancing and upgrading core services to provide unforgettable and impressive experiences for customers. This approach allows the brand to truly embody its values and mission.