Maximizing the Value of Your Hotel's Best Assets
By Klaus Kohlmayr Chief Evangelist, IDeaS Revenue Solutions | June 15, 2014
Whether traveling for business or leisure, hotel guests are typically looking for something more than they experience on a day-to-day basis at home or in the office. Often, guests will gladly pay a premium for an add-on or upgrade when the value is demonstrated as being worth more than the actual cost-or when a true need or desire is identified and fulfilled. So how can a hotel maximize the value of its assets in order to generate added revenue from every guest and increase the bottom line? It doesn't happen by accident, but there are specific methods that can help a savvy hotel manager or owner realize the maximum return from every asset available to them. These assets can be comprised of physical attributes of the property, such as hotel amenities and features, but can also include people assets, with an emphasis on front desk and other guest-facing personnel. These team members have a unique opportunity to interact with and upsell guests, and therefore their value is best maximized through an effective, consistent, and measurable training program that helps them to build and refine those skills. First, however, let's take a look at the most obvious assets – the property itself.
Physical Assets: Enhancing the guest experience
As hospitality leaders continue to seek out alternate methods that lead to higher occupancy rates and greater revenues while reducing expenses, many may overlook the value-creating potential of their property's most obvious assets. By focusing simply on lower rates or free upgrades, a hotel loses a tremendous opportunity to establish itself as a provider of unique, luxurious and enjoyable guest experiences. When management begins to move away from simply trying to attain 'more heads in beds,' and alternatively focuses on promoting and correctly informing guests on services and unique amenities, hotels implement a strategy that can boost value and a guest's willingness to spend without needlessly sacrificing potential profits (likely even increasing them). And when leveraging a property's existing amenities to maximize the perception of enhanced value, hotels are able to influence guest spending with minimal impact on property expenses and at a high flow through.
For instance, most hotels understand the revenue potential of amenities such as day spas, golf courses and restaurants, but overlook others, such as fitness centers and pools. They often view such facilities as 'value-added' benefits, as opposed to the guest experience altering, profit-driving vehicles that they have the potential to be. At the least, an amenity is used to reinforce a guest's positive hotel experience, but promoted correctly, it can be transformed into one of the leading factors that motivate potential guests to finalize their reservations-and often return time after time. For instance guests enjoying a hotel's "free" swimming pool area may greatly appreciate the ability to purchase related items such as pool toys, swimsuits, sunscreen and drinks to enhance that experience. Those interested in staying in shape while they travel may be swayed by a property that offers a fitness center with the ability to sign-up for training classes or a personal instructor. To be fully satisfied, such guests value the ability to find a property that can fully address their needs and expectations. Whether it be for relaxation, entertainment or business, true value for most is found not in lower rates and more stringently budgeted services, but in amenities that can fully deliver the experience that they are intended to: guest satisfaction.
But what about smaller, limited service properties lacking the resources and amenities to match the more luxurious features of a full-service resort? Hotels that can't provide guests with an onsite golf course, spa or private beach can still offer valuable differentiation that tips the balance of the guest experience in their favor. Even a typical midscale hotel may be able to offer premium rooms with preferred views or quicker access to lobby elevators. Perhaps guests with limited mobility would find a property that offers room-delivered breakfast or a direct shuttle into town to be enticing. Even a hotel's website or social media channels can serve as a valuable guest amenity, with worthwhile features such as up-to-date information/reviews on local attractions or links to public transportation schedules.
A common misconception is the notion that amenities serve merely a secondary revenue-generating role. In fact, as many leading hotel companies have discovered, when properly managed and promoted, many properties find amenities to be one of the leading motivators behind increased profits. What becomes vital in establishing greater revenue, however, is not competing with other properties via lower rates or added value giveaways and upgrades, but rather on the ability to offer a first rate and one-of-a-kind guest experience. The guest seeking a relaxing vacation for instance, will place higher value on a property that can provide faster service, enhanced service options and a qualified team that can ensure their complete satisfaction. When it comes to exceeding their expectations, hotel guests will typically favor paying premiums, as long as that added cost provides clear advantages and benefits that meet the guests' needs and make their stay more satisfying.