By Nicole Dehler, VP of Product at Stayntouch
Today’s hospitality market has seen a resurgence in travel demand, but in many ways it’s a much different environment than what existed prior to 2020. For one thing, the cost of labor will begin to rise as hoteliers offer increased wages, benefits and career advancement opportunities to correct chronic staff shortages. Customer demand has also changed, as guests begin to expect higher service levels, more personalization of the guest experience and more widespread adoption of hybrid travel models, such as bleisure trips or short-term rentals.
Success in this new hospitality market requires a more holistic approach to revenue generation that is implemented through flexible and seamlessly integrated mobile technology. Instead of only focusing on increasing occupancy and nightly room revenue, hoteliers should view every touchpoint in the guest journey, and every space in their hotel, as a potential avenue to earn revenue and enhance the guest experience. This holistic approach to revenue generation is only possible through advances in mobile hotel technology which allow guests to personalize their stay, and hoteliers to manage every aspect of their property from anywhere with an internet connection.
Diversify Your Hotel’s Assets to Include Hourly/ Day-Use Rates and Short-Term Rentals
There is no reason why hotels should limit themselves to only offering nightly room bookings. Expanding asset classes to include hourly or day-use rates and short-term rentals allows hotels to cater to emerging market segments of travelers. Hourly bookings have been especially useful for airport hotels, allowing them to better serve busy air travelers facing extended layovers or flight delays. Hourly rates also allow hotels to capitalize on the growing teleworking trend by offering rooms as a quiet and productive “escape” from a noisy or distracting homework environment. Hotels that have spa, golf or other resort-like amenities can also leverage day-use bookings to cater to local guests who want to experience these activities, without necessarily booking an overnight room. On the other side of the temporal spectrum, creating a short-term rental asset allows hotels to compete directly with Airbnb and other vacation rental properties in their market.
Leverage Mobile Upgrades to Increase Ancillary Revenue
Compared with the airline industry, hotels are vastly underutilizing their potential to generate ancillary revenues. Although ancillary revenues in the airline industry decreased dramatically during the pandemic, by 2021 they had risen over 13% to top $65.8 billion, and made up 14.4% of the airline industry’s total global revenue. The hotel industry hasn’t come anywhere close to these numbers, even though they have far more opportunities to generate ancillary revenue in ways that actually add value to the guest experience.
Mobile technology can go a long way toward closing this gap. A mobile PMS system can deliver a seamless self-check-in experience to hotel guests. By integrating mobile check-in with a digital payment gateway, a keyless entry system, and a guest messaging system, hotels can allow guests to avoid long lines at the front desk and check in entirely from their smartphones. While this feature is certainly convenient, it also creates the perfect touchpoint for hotels to send targeted automated offers for room upgrades, amenities, loyalty benefits, and monetized early check-in/late check-out directly to the mobile device in their guests’ hands.
This method has proven to be far more effective than traditional in-person upselling at the front desk, achieving conversation rates as high as 18% for room upsells, and 10% for add-ons. The reason is that traditional upselling often feels forced, and the offers are rarely directly relevant to the guest and their unique habits and preferences. Mobile upselling, however, can tailor offers based on a comprehensive guest profile, and deliver messaging unobtrusively at key touchpoints in the guest journey.
Integrating your PMS with a customer relationship management system (CRM) as well as an upgrade optimizer can increase revenue even further. CRMs build upon your PMS’s existing guest profile by adding guest loyalty status, travel intent, personalized interests, propensity to spend and custom survey results. The CRM can then leverage this more nuanced data set to deliver more effective offers and messaging throughout the guest journey. Upgrade optimizers take this a step further by intelligently optimizing the price of upgrades, and tailoring offers based on a guest’s unique travel needs and persona.
Make the Most of Unused Spaces
Every section of the hotel has the potential to be monetized as a guest-centric space. In addition to mobile check-in, hotels that leverage guest-facing smart kiosks can essentially eliminate the front desk from their lobby. The result is the transformation of the lobby from an overgrown waiting room to a space for socializing, dining and monetized co-working. Integrating with a mobile Point-of-Sale (PoS) system allows your guests to continue their mobile-first experience at every dining establishment in your hotel. Instead of having to wait to catch the attention of an associate in the lobby lounge to order appetizers and drinks, guests can simply sit down, scan a QR code and have their order appear while they check emails or enjoy a conversation.
Maximizing Stay Customization: The Future Belongs to Attribute-Based Shopping
The trend towards the hyper-personalization of the guest journey is only increasing. In the near future, hotels will again follow the airlines’ lead and adopt Attribute-Based Shopping (ABS) as their primary booking strategy. ABS is a cluster of technologies and pricing strategies that breaks down products into their component attributes, allowing customers to build their own end products by selecting a series of preferred attributes. Instead of the traditional booking method, where guests choose between finite and standardized room types, ABS allows guests to “build” their ideal room by selecting a series of desired attributes, including the floor number, type of view, number of beds and the addition of a variety of room features such as a balcony or tub.
Although the technology behind ABS has been around for over a decade, it still must be greatly simplified if it is going to be fully leveraged by hotels and their guests. In order for ABS to be successful, a hotel’s tech stack一and specifically, the PMS, CRS and RMS一will need to be aligned to introduce a streamlined approach to ABS that can generate revenue, without defragmenting inventory or overwhelming the customer with too many extraneous choices.
Stayntouch recently partnered with the NYU School of Professional Studies (NYU SPS) Jonathan M. Tisch Center of Hospitality to conduct a comprehensive survey of U.S. traveler sentiments towards attribute-based shopping 一 the first study of its kind for hospitality industry. The results were encouraging: After being introduced to the concept of ABS, almost all of the respondents (97%) expressed some level of interest, with 57% being either “very” or “extremely” interested. Respondents generally had a high opinion of ABS, with supermajorities indicating that it would increase personalization (78%) and transparency (68%), and strong majorities indicating that it would be ‘convenient (59%) and ‘simple’ to use (58%). Even more interesting, almost two-thirds of travelers (63%) who pay over $251 per night and 48% of those who pay $151-$250 per night were willing to pay more to select their preferred room features.
In the coming years, ABS will represent the culmination of existing trends towards increasing mobility and personalization of the guest experience within the hotel industry. It will also represent an unparalleled opportunity for hotels to earn revenue while enhancing the convenience and customization of the guest journey.