It all began a few years ago when the airlines started the practice of merchandising ancillary items either onboard flights or during the booking process. They pulled back on offering complimentary items such as pillows, headphones, meals, and so on. For these simple conveniences, travelers must now pay a premium. The industry wholeheartedly expected that there would be a major backlash. However, after a brief period of angst, it became clear that people still needed to get from point A to point B, and so they continued to purchase airline tickets. Now airlines sell overhead space, specific seats, in-flight entertainment, WiFi, and the list goes on and on.
After watching this trend carefully, the hotel industry is finally catching on. Some hoteliers have been slow to adopt this model for various reasons, not the least of which is the service element on which hospitality operators pride themselves. The hotel industry has successfully started selling the option for guests to purchase an upgraded room or specific feature at a nominal fee during the booking process or during check-in. The good news is that this new selling tool has been very well received and adopted. Hotel chains, large and small, have realized that this is a great way to enhance the guest stay and generate higher revenues. However, this is just the tip of the iceberg when it comes to the full potential.
Until now, hotels, when selling ancillary items or services, have been focused on experiential service delivery as the main component. These sales may include spa services, room service, specific lessons if staying at a resort, and of course, the mini bar. Yes, the mini bar is not an experience. However, it can lead to many amazing experiences. Hotels need to look beyond the norm and consider what we think of as room features. In most cases, the price of that specific feature is usually bundled within a room rate. If we look at an average room, there may not be very many things that you can charge extra for other than floor level or room proximity to hotel outlets. It does, however, get very interesting when the room has a number of features that can be unbundled and sold separately. If the room has a specific view, this can be merchandised. If the room has a balcony and others do not, the balcony can now be an added fee. Particular types of bathtubs, the delivery of special linens, and most importantly, the actual room itself can be marketed. More and more, guests are becoming aware that they can request a specific room, and if given a choice to book their preferred room, they are willing to spend a little more to have this capability. Instead of consistently overselling standard rooms according to market demand—the current status quo, which regularly results in unhappy guests—hotels can unbundle rooms and give guests exactly what they want. Make the balcony accessible to them or the view or any number of other attributes, and make much-needed revenue.
Along with the features of the room itself, hotels also can sell items that may not be part of the room inventory. These items can include food and beverage, specific amenities such as branded hair products and lotions, as well as hotel-branded items (robes, t-shirts, etc.). The sale of almost everything on-property, if delivered to the guest properly, can now enhance their stay, boost spend, and help drive loyalty to the brand. That said, hotels must be thoughtful and strategic about how they roll out changes like these. The airlines have consolidated so much that travelers only have a few choices. With hotels, there are many, many choices and maintaining branding, a substantial guest base, and enhancing, rather than reducing guest service are the aims.
Hotels need to boldly move forward and start evaluating how they sell their room inventory. By selling features, guests get exactly what they want, and hotels increase profits. Just like the ancillary sales evolution for the airlines, there may be initial angst for some travelers. However, if appropriately positioned with the focus on delivering more options to the guest that he or she can choose, the door will open to endless possibilities for guest engagement, revenue, and data tracking.
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Pierre Boettner spent his entire life between hotel operations and hospitality technology. In 1993 he pioneered an industry-first forecasting and pricing tool for Mövenpick Hotels and was later involved in many system innovations, helping hoteliers improve their distribution capabilities. Recognizing the increasing difficulty of managing rooms operations, he and long-time colleague Denis Bajet founded hospitalityPulse in 2013. This company has dedicated itself to solving the most complex operations tasks still requiring daily human intervention. Pierre Boettner is a graduate of the esteemed Ecole hôtelière de Lausanne.