Hoteliers who rely solely on direct room revenue miss out on lucrative ancillary revenue streams that contribute directly to a hotel’s bottom line. Ancillary revenue helps hoteliers maximize profit and the valuation of their property, and, in some cases, actually is what keeps the lights on.
Below are seven upsells that limited-service properties (or any hotel) can deploy to generate ancillary revenue.
1. Early Check-In and Late Checkout
Offering guests the option to pay a little extra to check in early or check out late is a relatively low-lift way to boost ancillary revenue. Even the most price-sensitive of guests are often willing to pay a small premium for the convenience.
According to data, guests at limited-service properties generally will embrace a $20-$30 fee for early check-in or late checkout, and 5-10 percent of all guests will select one of these options through a digital upselling platform. It’s easy to imagine how presenting these basic offers can lead to hundreds or thousands of dollars in ancillary revenue for limited-service hotels every month.
An important note: Hoteliers that utilize software for early check-in and late checkout need to ensure they have the ability to approve and deny these requests and inform guests as to their availability. If a hotel is at 100 percent occupancy and a number of guests wish to check in early or check out late, housekeeping may not be able to turn rooms over quickly enough to accommodate the requests. Limited-service hotels should thoroughly evaluate any software solutions that enable the selling of early check-in and late checkout to ensure these features are included.
2. Room Upgrades
Providing guests with the option to upgrade their rooms after booking or at check-in is a fantastic way to boost a hotel’s bottom line. How upgraded rooms are marketed is entirely up to the hotel. King beds, corner rooms, a higher floor with a nicer view—there are lots of ways to divide up and present room upgrades to guests in appealing ways that will entice them to pay a little extra.
3. Food & Beverage Services—Even Without a Restaurant
If you aren’t set up to cook and serve food yourself, then there are a few options for hoteliers to increase revenue from F&B. One popular option is to offer nonperishable, packaged foods digitally via an upsell platform, which guests can use to order food and drinks at any time. As long as hotels have a small storage area, existing hotel staff can fulfill guest orders relatively easily. Don’t underestimate your guests’ desire to snack. Chips, cookies, soda, water, etc., are all popular options that can provide high margins for limited-service hotels.
The other option for hoteliers without an on-site restaurant is to partner with local restaurants to offer guests access to food delivery. Many local restaurants are willing to give commissions to local hotel partners if the hotel can offer a steady stream of new business. Hoteliers should aim for a 10 percent commission from the restaurant, but also consider an additional delivery fee to cover for the guest to cover the cost of any necessary hotel staff allocation. Another option is to partner with those same restaurants to provide continental breakfast and snack items, such as croissants and premade sandwiches, in the lobby.
If you already have a dining area and kitchen facilities on site, you may want to consider expanding your service to include 24-hour roomservice. Offering roomservice doesn’t necessarily mean a hotel has to provide the same menu one would expect at a restaurant, but presenting a few key culinary options at any time of day can go a long way toward improving guest satisfaction and revenue generation.
4. Pet Fees & Activities
People love to travel with their furry friends, and if your property is set up to accommodate animals, many will happily pay a little extra to ensure that Fido or Fluffy doesn’t have to be left at home.
Including pet fees as a part of the check-in process is a fantastic way to increase ancillary revenue, but why stop there? People are often quite busy when they travel and attending to their pets’ needs is probably low on the list of things they would prefer to spend their time doing. If your property allows pets, you may want to consider partnering with a local dog-walking service or groomer. Both the guests and their pets will appreciate it.
5. Parking Permits
Finding a place to park a car, especially in urban areas, can be a nightmare. If you have a designated parking area at your property, you may want to consider charging a premium to use it.
There are essentially two ways to implement a pay-to-park service at your hotel. The first, and less labor- intensive option, is to set up an automated toll booth similar to those you would find in most parking garages. The second, and cheaper option, is to simply issue parking permits at the front desk and ask guests to place them in their windshields. To ensure that only designated cars are taking up valuable parking spaces, a member of your team should routinely walk through the lot checking for permits.
6. Daily Housekeeping Services
Every hotel guest wants a clean room upon arrival that has been attended to by the housekeeping department. However, once their stay has started, not everyone needs (or in some cases, wants) to have the hotel’s team entering their room every day. During the COVID-19 pandemic, it has even become the norm that hotels do not clean occupied rooms on a daily basis. This trend could be here to stay.
Only offering daily housekeeping services to those guests who have indicated they want it, and are willing to pay a premium, presents an excellent opportunity for limited-service properties to increase staff efficiency, lower housekeeping costs and generate ancillary revenue.
7. Discounts on Local Attractions and Specialty Products
Whether hotel guests are traveling for work or leisure, there is a good chance they’ll want to explore local attractions and interesting shops during their stay at your property. Limited-service hotels looking to capitalize on this desire would be wise to reach out to local businesses of all kinds to create revenue-sharing relationships. This may include selling tickets to local attractions, issuing vouchers for discounts on local specialty products, and scheduling reservations for exciting and unique experiences.
The best part: All of these products, services and experiences can be sold easily throughout the guest journey using a digital upsell platform. A digital upsell platform enables guests to make purchases seamlessly through their own personal mobile devices, with no need to download new apps.
Offering upsells is not limited to full-service hotels with restaurants and amenities like spas. There are enormous untapped opportunities for limited-service properties, which hoteliers are only now beginning to explore.
More than ever, guests expect these types of add-ons and amenities while traveling and search out hotels that provide them. Properties that seek to address these guest needs proactively and offer a cafeteria-style selection of services set themselves up to maximize ancillary revenue and overall profitability.
Harman Singh Narula is co-founder of Canary Technologies.