How to drive ancillary revenue when ADR is maxed out
With room rate thresholds being maximised and the need to drive ancillary revenue ever more prevalent, how can mobile ordering be the answer?
Here’s our top tips to boost in-room F&B revenue, enhance the guest experience and foster a more sustainable experience
With guest expectations changing and hoteliers under pressure to generate additional revenue, the need for a more digitised guest experience and alternative income streams has accelerated and become more of a necessity than a ‘nice to have’.
Hoteliers are now looking beyond room rates as the only means of making money and exploring additional income models such as in-room dining and mobile ordering (in the lobby, pool deck, bistro for example).
And the good news is, technology (by way of online ordering platforms) to drive F&B revenue delivers exceptional ROI, so it’s a win win for both guests and hoteliers.
Let’s explore some of the ways in which hotels and guests can benefit and maximise F&B revenue:
Offer a variety of food and drink options
Tempt your guests with an array of food and drink options – Champagne breakfast in bed, romantic dinners, late-night snacks, cocktails before dinner, the list is endless. All of which can be delivered and enjoyed in the comfort of the guest’s own room or sun lounger (or anywhere in the property!), at a time that suits them.
Online orders go into a dashboard that the hoteliers can view anywhere in the hotel (as it’s cloud-based) and the kitchen can start processing them straight away. Orders are seamless and delivery is efficient so you can serve more guests with fewer staff.
Enable your guests to order a range of F&B - from coffee and snacks to evening meals and cocktails - from their smart phone
Tempt your audience - discounts & upsells
Tempt your guests to spend more with the perfect pairings at their fingertips. Guests can enhance their order by effortlessly selecting drinks or accompaniments to complement their meal. This proactive approach not only boosts the guest's overall dining experience but also provides a valuable upselling opportunity, increasing the likelihood of additional purchases.
Promote particular items that are on special or seasonal favourites and use push messages and notifications [pre-scheduled] to your audience – particular guests or all guests as you please – to promote these.
Offer a discount or promotional offer to encourage uptake or order a little extra!
Speak their language
Enable guests to view the menus in their native language so they can easily access all the information they require, place orders and engage with the hotel staff in a clear and concise manner.
Guests will have a better experience if they view content in their own language.
Make it simple & easy to order
Guests can use their own device to order, at their own pace - nothing to install or download and way more hygienic.
Send the link or QR code prior to arrival with their confirmation email and pre-stay comms. Additionally, clearly display the QR code, or link, in their room so they have a quick and easy way to view, order and pay for food and drinks from all property outlets. They can even open a tab, order multiple items and then pay in one single transaction when they’re ready.
Appeal to a wide variety of guests & create packages tailored to each guest segment
Ensure your offerings cater for different travellers with different budgets, behaviours, and needs. Tailor packages to suit the needs of each guest segment e.g. business travellers - convenient meal, coffee and breakfast first thing in the morning; couples – a romantic meal with cocktails on their balcony; families – picnics and lunch boxes to take out for day trips.
Offer something that will interest them and enhance their stay.
Be more sustainable & up-to-date
By removing paper menus and flyers, hotels are not only saving money with substantial printing costs, but they are also fostering a more hygienic and environmental guest journey which is a top priority for guests.
Digitising the menus also ensures that menu descriptions, images, allergen/calorie information and prices are always kept up to date and accurate. There’s no second guessing, the guests have all the information they need to make an informed selection at their fingertips.
Analyse your best-performing deals
One easy way to identify potential ancillary revenue opportunities is to identify which items and packages are proving popular and profitable. By reviewing insights, you can highlight your best-performing items by offering guests more of what they want and tailor successful aspects of packages that can be adapted across other deals.
“As costs are increasing and room rates are maximised, hotels are under pressure to drive value and revenue from every guest and mobile dining is a great place to start. QR code ordering and in-room dining are proving extremely popular for hotels and are delivering high profitability and positive guest feedback – they have gone from being a necessary safety measure to a commonly preferred convenience for guests.
However, hoteliers must ensure they’ve got the tools in place to these maximise revenue opportunities. They need to offer a seamless, digital experience and digital ordering platforms can offer just the ticket in this regard” - added Kate Fuller, Senior Marketing Manager at IRIS
Meet the growing guest demand
Hoteliers are stating that revenue sources beyond room rates will become a more important component of their financial plans moving forward. According to the recent Oracle Skift ‘Back to Hospitality’ survey, 67% of executives agreed that non-room revenue will represent a growing share of their annual revenue in the next five years and even more people (77%) agreed that they would be exploring new opportunities to add non-room revenue.
Encouragingly, there is a growing demand for non-room revenue sources amongst guests. Sixty-seven per cent of hotel guests said they were “very or somewhat” interested in buying products and services beyond their room, a data point that suggests an opportunity to upsell or cross-sell items to guests as part of their stay.
F&B concepts are proving one of the biggest revenue generators. Top non-room products and services consumers have previously purchased from a hotel, or are open to purchasing in the future, are food from the restaurant (91%) and drinks from the bar (86%).
This highlights how metrics like total revenue per available room (TRevPAR) better encapsulate the complete guest revenue generated across all hotel departments on a per-room basis, not just revenue from the room rate itself.
