Money talks

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How hoteliers are getting creative and boosting their bottom lines

by Iain Shaw

With many U.S. economists forecasting slowing growth and a possible looming recession, there’s no room for complacency when it comes to your bottom line. Whether a hotel is facing a financial crunch, tackling inefficiencies, or simply seeking to bring in additional cash, it takes hard work, creativity, and often a dash of courage for hoteliers to successfully boost revenues.

PUT A DOLLAR SIGN ON YOUR SPACE
One strategy is to audit your hotel’s facilities with an open mind. Just as an empty room or restaurant table equals lost revenue, any space in your hotel that lies unused could represent a missed opportunity. Take storage space, for example. Hotels will typically store guests’ bags free of charge – but why limit that service to hotel guests? That’s the pitch luggage-storage app Stasher makes to hoteliers, and the 35-room Catahoula Hotel, a boutique property in New Orleans, is one of its partners in the U.S. A visitor can use the Stasher app to book a luggage drop-off at Catahoula, even if they are not a guest at the hotel. The user pays Stasher up to $6 per day, and the hotel gets a cut.

Chelsea O’Lansen, director of sales & marketing at Catahoula Hotel, says Stasher customers can become future hotel guests. “Everyone will walk into the lobby and be like, ‘Oh, my gosh, I should come back here and drink later. Or maybe I’ll stay here next time I’m in New Orleans,’” O’Lansen said. “It’s a great way to get people to walk in the door and see the property.”

BANK ON SEASONAL EXPERIENCES
Many hotels experience seasonal highs and lows, but you shouldn’t accept those lulls as inevitable. One way of driving more business in low seasons is to create guest experiences that embrace seasonality and locality. Over the past four years, The Resort at Paws Up in Greenough, MT, has shifted from being primarily a summer property to a year-round attraction.

“It was about focusing on what drives people to Paws Up in the first place,” revenue manager Heather Vieira said. “So, in the summer, we have more than 40 activities. We took that same approach on experiential adventure for the winter, coming up with some really cool, out-there activities that you can’t do at home.”

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Paws Up’s “Wilderness Adventures” for winter now include unique, season-specific experiences like skijoring, which involves guests on skis being pulled by horses. In addition to special Christmas packages, the resort also offers dog-sledding, sleigh rides, snowmobile tours, cross-country skiing, and downhill skiing.

“We were making our money in three months,” Vieira said. “Especially with climate change and forest fires, if our August didn’t produce as it did historically, that could really hurt our company.”

In addition to improved revenue, the resort is now able to retain more year-round staff, which helps with maintaining a high standard of service.

Creating highly localized experiences encourages guests to spend more time and money with your hotel. Rhett Hirko, global vice president of revenue optimization at Preferred Hotels & Resorts, says this approach has been beneficial for the group’s hotels around the world. In Manhattan, The Mark’s range of elevated experiences offers exclusive twists on quintessential New York culture, such as an art package featuring a private guided tour of a gallery or museum. Through 2019, the group’s Grand Hotel Tremezzo in Italy has generated around €8,000 (almost $8,800) in additional revenue by running a total of 45 water limousine tours on nearby Lake Como.

Hirko said hotels can localize without being in scenic or downtown areas. For Hotel Arista in Naperville, IL, localizing means tailoring offerings to guests flying through nearby Chicago O’Hare International Airport. The hotel designed a Guaranteed Early Arrival program aimed at O’Hare arrivals who might want to check in early. This year, 90 purchases have brought in around $3,000.

BUNDLE & BUDGET
Preferred Hotels & Resorts is also working with Sabre Hospitality Solutions on a major project integrating hotel bookings with potentially related transactions. For example, a college football fan is booking a ticket for a game, but do they also need a hotel room? Right now, it’s unlikely those two needs would intersect at the point of sale.

“That could be a stadium with 80,000 people. This is an opportunity to sell my hotel, but I’m missing out on that opportunity,” Hirko said. “During the process of buying a football ticket, we’ll integrate the hotel’s booking engine. What you end up getting is the exposure of both hotel products and ancillary products throughout all of the different points of sale.”

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The technology will be available to Preferred Hotels & Resorts properties no later than the end of 2020, Hirko said, and will allow the hotel’s booking engine to pop up in dynamic advertising as well as at the point of sale.

TAKE NOTE
For some hotels, the solution is not trying to explore new revenue streams, but to identify – and eliminate – inefficiencies. Tim Blunk, director of meetings & special events at The Ritz-Carlton Orlando, Grande Lakes, said that integrating Social Tables’ event-planning software has allowed his team to book and execute more events than ever before.

“Before Social Tables, the meeting software market was very barbaric,” Blunk said. In the past, hotels often lost out on bookings for events they actually had the capability to accommodate. Floor plans were typically shared as PDFs or scans of “quarter-and-dime” drawings. If the hotel’s specifications appeared not to fit the event planner’s precise requirements, the planner would look elsewhere.

With Social Tables, Blunk’s hotel can share comprehensive meeting and events specifications, including a floor plan that can be edited using drag-and-drop tools, with prospective events bookers. Empowering the event planner has paid off. Decisions are made faster now, and more go in favor of The Ritz-Carlton Orlando, Grande Lakes.

“If I were to look at 10 opportunities that were not going to look at us because they didn’t feel we had the right amount of space, I would say we secured six out of 10 that may have discredited us right out the gate,” Blunk said. “But now, with Social Tables, we’ve been able to regain that opportunity.”

Customer satisfaction with events at The Ritz-Carlton Orlando, Grande Lakes, is also up. “When we asked our customers, ‘Do you feel the planning of your event was successful?’ we used to average between an 8.5 and a 9. Now, we’re averaging between 9 and 9.5,” Blunk said.

Happy customers means positive word of mouth, repeat business, and, ultimately, more revenue.

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