Simple on-property solutions that maximize a guest’s perception of their stay and new expectation of liveliness in the lobby.
by JANINE ROBERTS
The hotel lobby is steadily evolving from its ‘necessary fixture’ days. Once only used to check in guests and to provide a spot to wait for a taxi, lobbies have evolved into a thriving social scene rich with opportunities to both exceed guest experience and generate incremental revenue. This win-win was not achievable even just a few years ago when guests were checked in only to be immediately directed to the elevator where they hunkered down to check email and order in pizza. Time spent in the lobby was limited to meeting their party for dinner or waiting for the airport shuttle.
But thanks to the emergence of 83.5 million Millennials who are primarily motivated by Snapchat-worthy life experiences involving food, wine and travel, hotels are scrambling to provide an inviting lobby social scene that entices these guests to choose their brand and encourages them to stay and hang out.
With this newly available, willingly captive audience, hotels are presented with an unprecedented opportunity to add revenue above and beyond the competitive room rate or traditional food and beverage (F&B) that is not typically available to the economy and select-service brands many Millennials are choosing.
Here are three ways hotels can liven up their lobbies and increase sales per occupied room while simultaneously making that coveted Millennial guest population ridiculously happy.
The happiest of hours!
Your guests have long days. Tough days. Bad days. They have exciting, “let’s celebrate” days. And more often than not, they have, “I just need to sit down and ‘chillax’” days.
Offering a simple evening happy hour from 6–10 p.m. in the lobby can generate substantial revenue with minimal effort and no renovation or major cost to implement.
Economy and select-service hotels that do not have a restaurant or bar can easily roll out this well-received and lucrative offering. Brands such as Hampton Inn have successfully tested portable Happy Hour Kiosks that can be rolled out during prime evening hours to sell beer and wine by the glass with as little as a cart or table, a variety of cold beer on ice, and a red and white wine offering with stemware.
The margin on alcohol is anywhere from 300–500 percent with the average bottle of domestic beer under $1 and carrying a retail price of $5 or more. Mid-tier wine can be purchased at $10 to $12 per bottle and can produce four glasses of wine that retail for $6 to $9 per glass.
And remember, that’s just beer alone! Consider the fact that Millennials’ massive consumption of wine is literally scaring beer giants like Anheuser-Busch and changing the way the wine industry prices, packages and markets its bottles.
Throw in a wine-tasting night in addition to ice-cold beer, and hotels could easily add $5,000 per month in pure profit to its bottom line. What general manager couldn’t use an extra $60,000 per year in his/her budget?
Sell 15–20 beer bottles per evening
Maximum cost: $15–$20
Daily earning potential: $75–$100
Revenue potential per month: $2,250–$3,000
Cost per month: $450–$600
Gross profit per month: $1,800–$2,400
Things to consider
- Check your city’s alcohol licensing requirements before selling alcohol.
- Consider purchasing a tablet Point of Sale application to quickly accept credit card payments at the kiosk.
Market the market
Millennials are dominating the workforce and making up the new majority of business travelers; a recent Global Business Travel Association study shows they are nearly twice as likely to travel for business as Baby Boomers.The hotel pantry is often an overlooked profit center in the hotel lobby that has the potential to generate substantial revenue while encouraging guests to stay on property and socialize over a quick meal or indulgent snack.
However, as pointed out in a quote by Josh Lesnick, chief marketing officer of Wyndham Hotel Group, they are considerably more limited on travel budgets: “We’ve all talked about how Millennials have huge aspirations, love to travel, value experience over products and goods,” he says. “What isn’t talked about a great deal is that most Millennials do not have a huge discretionary income.”
This gives hotels access to a mass volume of travelers who are making budget-conscious decisions while still having higher expectations of the overall experience. Savvy hotel managers can monetize this opportunity by offering quality meal options in the pantry that meet guest’s desire for convenience and smart spending.
Expanding quick meal and frozen dinner options to include more health conscious, quality brands encourages guests to spend their dollars on property as opposed to less popular, fast food options and costlier local dining. Think more Annie Chun’s and Amy’s Kitchen Organics, less Chef Boyardee and Nissin Cup of Soup.
The single-serve meal category retails for $6–$8 when applying a 55–60 percent profit margin. When you consider the average fast food meal now retails for $7.50 and rarely meets the nutritional goals of today’s Millennials, it is both a bargain and an offering guests have come to appreciate as healthier meals and snack options continue to top the trends of guest requests in hotel retail.
Things to consider
- Millennials are known to enjoy communal meals over solo dining. Create an inviting family-style dining table, or a long high top with electrical outlets to allow them to eat, socialize and stay connected all at once.If you have room for it, expand your
- If you have room for it, expand your freezer section by purchasing a full-size display freezer that easily offers a wide variety of meals and ice cream options. Ice cream cups and novelty ice cream bars generate a large gross profit per turn without carrying the retail cost of the traditional pint.
No pantry, no kitchen, no problem
Pipe in fun music, roll out the beverage cart and serve beer and pizza for $10–$12 per guest, or host an all-you-can-eat pasta night and a glass of wine for $15–$20.Consider partnering with a local food delivery company that delivers prepared foods during evening dinner hours. Offer meals to guests on platters at a fixed cost. Delis, pizzerias and local Mexican fare are easy options for bringing in simple, yet profitable prepared foods to feed guests with an attractive ROI, but little to no need for food prep.
Things to consider
- Check local food service requirements to ensure licensing and sanitation issues do not apply when serving guests prepared foods.
- Remember that the convenience of not having to leave property and providing a fun, comfortable environment where guests can socialize while dining warrants a slightly higher price point than local take out or fast food restaurants.
With more and more brands looking to better capture the attention and expectations of this unique, new guest profile, it is important to seek simple on-property solutions to maximize their perception of their stay. Creating an energetic lobby experience alive with opportunities to network, socialize and SnapChat will provide a quick ROI in both guest loyalty and instant revenue. ■
Janine Roberts is founder and CEO at Impulsify (www.impulsifyinc.com) and has spent nine years passionately pursuing the secret to the successful hotel pantry. She works with thousands of GMs, franchisees, owners and brands to solve the challenges that limit retail performance in hospitality. Janine’s unique combination of skills results in unprecedented expertise in a niche of hospitality that generates over $300M in annual revenue.