2024 is expected to be a mixed year, according to the experts gathered by Teduka Formación Turismo for a "Revenue Afternoon." As Javier Tausía, CEO of Luna Hotels, emphasized, "we all have to get used to macroeconomic instability," but at the same time he acknowledged that "there is still room to continue raising prices." The entry of investment funds and major international brands in Spain "is positive because it helps reposition destinations," although it also "poses a challenge because it adds beds and increases competition." He also predicted "a purge of unprofessional establishments." Faced with these challenges, and many more, here are the recommendations for small chains and independent hotels to successfully face 2024.
In total revenue, understood as "the optimization of processes to maximize results at every touchpoint of the customer journey," as defined by Francesc González, CEO of The Net Revenue, experts have admitted that "there is still much to be done: both in pre-arrival and in data collection during the stay and post-stay, there is still enormous potential to maximize communication and, therefore, revenue."
Chema Herrero, CEO of BedsRevenue, has suggested that hoteliers "think about what your guests do while they're staying and, based on that, design a strategy for each point of sale with as much customer information as possible to maximize profitability with upselling and cross-selling actions."
Independent hotels
But how can small hoteliers shift toward total revenue with fewer points of sale? Here are the experts' suggestions:
– For Francisco Quintero, Commercial Director of Landmar Hotels, “the key lies in total personalization and team training with a clear focus on service. Everyone goes through reception, so it's about generating greater customer trust in order to sell to them. To be able to focus their full attention on the customer and dedicate themselves to sales, they must go digital. This will also contribute to the personalization of all the products they sell, with the goal of achieving higher conversion rates by optimizing their time. Technology and personalization are the keys.”
Francesc González also advocates using this hyper-personalization to "Increase sales even after the guest's stay," and gave examples of initiatives at a boutique hotel such as marketing its scent for guests to take home or creating personalized gins. In his opinion, "we can go very far, but we lack the imagination and resources to create these calls to action to generate extra income." Training staff to always be on the alert to capture that extra sale also contributes to this.
– The CEO of The Net Revenue has also advocated for “listening closely to the customer, who ultimately is the one who asks for those extras you can provide. Hoteliers also need to review their inventory to ensure it's well segmented, because if a new room category can be introduced with an extra charge that the customer will accept, it can be a good new source of revenue, starting with naming.”
"The hotel can even market ancillary services outside the establishment, such as transfers or excursions, to attract a differentiated customer," said Antoni Homar, commercial director of Zafiro Hotels.
– Toni Homar also recommended “upselling and cross-selling training to optimize revenue at all points of sale; and also providing all staff with relevant revenue guidelines so they can be involved in improving revenue optimization. In fact, such training would generate revenue in and of itself.”
– And according to Chema Herero, there's "a massive cross-selling opportunity within the revenue strategy, with more volume but, above all, higher prices, to make all points of sale profitable: since we have them, we can get the most out of them. Furthermore, if you adapt the offer to the type of guest, it means you'll earn more, more expensively, and with greater customer satisfaction."
“Technology and employee training are key to focusing on what's important: increasing revenue and customer satisfaction,” Francisco Quintero said.
Customer journey touchpoints with the greatest potential
These are the customer journey touchpoints where the hotel needs to improve to maximize its revenue:
– In the pre-stay phase, as Herrero acknowledged, “we do very poorly. We should establish a connection with the customer from the moment they make their reservation to get to know them better and tailor the products we can sell them beforehand. We lose valuable time in which to make an impact and generate profit.” In this regard, Homar cited the case of the seven contacts that Scandinavian tour operators establish with their customers before they travel, “suggesting different options for improvement (and spending). They won't match up across all seven, but they'll certainly get some extra sales, almost like the airlines.”
– But the truth is, as the CEO of BedsRevenue has admitted, “We don't have a coherent upselling policy defined when the client arrives, nor do we have stipulated supplements and how we sell them. And technology allows us to do this through the channel manager. But we don't put much effort into post-sale either, being able to send an email saying, 'We miss you, if you want to come back to us, you have a 10% discount that you can also give to your family.' We don't impact the pre-, during-, or post-sale in most cases, and we have the capacity to do so.”
– In Quintero's words, "a 360-degree sales mindset is needed. Have teams trained to offer a complete experience, providing what the customer needs at all times and thus increasing value: from the call center, upselling at the front desk, to the hotel's experience team to complement their vacation and increase the ticket price with excursions, activities, Balinese beds... And upon departure, communicate with them."
"Data is just as important for any size establishment if you want to know your customer, in order to personalize your value proposition and activate the levers for upselling and other sales. The gold standard of the 21st century is clean data," concluded Chema Herrero.
Total revenue also at all-inclusive resorts?
– In the case of all-inclusive resorts, Quintero has acknowledged that “there is a challenge for the team to change their mindset, because they assume that everything is already included and they can't sell more, but they can. Of course, a lot of work needs to be done from an experiential perspective, from the customer experience, to complete their vacation, not only with in-hotel spending but also with additional services, transfers, excursions, activities, etc.”
– The commercial director of Landmar Hotels also proposed “exploring other segments, such as MICE in the leisure sector, which, when properly balanced, can be tremendous. In our hotels, it already represents additional revenue that we didn't have a year and a half ago. But to do so, we need to work on customer experience and other segments we didn't have before.”
More news on distribution strategies for small chains and independent hotels can be found at:
– How small chains and independent hotels innovate
– Thirteen disparities with which distribution can be played to the hotel
– Key technologies already being applied in hotel distribution
– Netflix shows hotels that customer micro-segmentation is key
– What is the new post-pandemic Revenue Management?
– At Zafiro Hotels, according to its commercial director, “we have created specific packages with the Food and Beverage department to celebrate special occasions such as birthdays or anniversaries, which can be booked before or during the stay through the app, to offer guests the unforgettable experience they are looking for.”
– And, as Herrero emphasized, “with the wow effect, you can differentiate yourself, when the guest is so comfortable that the price is the least of their concerns. That's the turning point where you can maximize revenue because you break the price barrier. All hotels have that ability to surprise guests, because price isn't that important. That's why it's highly recommended to permanently focus on that wow moment to maximize revenue.”
Toni Homar is committed to "offering exclusive and differentiated experiences that allow you to raise the price, including, for example, à la carte restaurants with different styles, a minibar, and room service in an all-inclusive package. Ultimately, it's about bringing all-inclusive concepts that were previously only available in the Caribbean to Spain and optimizing them."
