BERLIN — Making money in a hotel is about more than just selling rooms, but not every hotel has food-and-beverage outlets, expansive meeting space or retail outlets to contribute ancillary revenue.
Speakers at the International Hotel Investment Forum shared tips for growing the top line, reminding hoteliers that generating additional non-rooms revenue isn’t reserved exclusively for high-end, full-service properties with lots of space to activate.
“You’ve got to really sweat the asset, with lean operating models and tech,” said Arlett Hoff, director of hotel development at Zurich-based SV Hotels, referring to the opportunities that smaller, select-service hotels have to generate additional revenue. SV operates 19 hotels in Switzerland and Germany, including its own brand.
Hoff and others shared some takeaways on how to maximize revenue generation from even the most basic of hotels.
If you’re using meeting rooms — even small ones — as storage, you’re not doing it right, said Kendra Plummer, founder of Elise Capital.
“Maximizing space is so important for our hotels, especially since the majority are Hampton Inns, which are rooms-based” when it comes to revenue generation, she said.
Plummer cited pandemic-era practices such as selling unused meeting room space to community groups and using rooms as office spaces as valuable long-term strategies. Above all, she said, the key is asking, “How do we implement programming on top of these items and rooms, and apply revenue to that?”
Hoff said, “Space efficiency is key in today’s successful hotel concepts,” a practice SV Hotels applies to its extended-stay Stay KooooK brand. The company decided to design the rooms with movable elements to allow ample room for work, entertainment and sleeping, and in turn cut down on public space.
And while elements such as hotel restaurants and spas can generate solid revenue from non-guests, Giorgio Ribaudo, managing director of tourism analytics company Thrends, said it’s important to be realistic about just how much potential is there.
“How you interpret the use of common areas, like the spa, restaurant and bar, can be very difficult,” he said. “So project out that known guest market to have a better idea of your forthcoming business.”
That unused basement in your hotel? Think about selling it as storage space, said Richard Valtr, founder of hospitality software provider Mews.
And if you know you’re never going to use a basement, be disciplined in the deals you analyze so you don’t end up paying more for space you’ll never use.
“I look at a lot of conversion and adaptive-reuse projects, and it’s amazing how much basement space and back-of-house space there is in a traditional building, which is just not needed for our concept,” Hoff said.
All speakers agreed that solid technology platforms help hoteliers identify unused space and sell it.
“Traditionally, tech hasn’t been built around looking at the whole-property view, but I look at how to get the most out of every available space,” Valtr said. “Tech should and does play an increasing role when you consider things like selling your basement as storage and selling rooms as offices during the day and bedrooms at night.”
Hoff’s company SV Hotels has proprietary technology that employees use to streamline their administrative tasks so they can be more guest-facing, because it’s not just about maximizing space efficiency, but also the efficiency of human capital.
That means more than hiring the bare minimum staff, speakers said. It’s about considering your workforce as employees with jobs to do, but also as conduits to driving more business.
“We operate Moxys that don’t have large spaces designed to bring community in, but even within that model, we can capture external local business, and it always comes down to the [general manager],” Hoff said. “If the GM is involved in neighborhood associations, you can achieve that. That human element works with tech, and it makes a big difference in our properties.”
Plummer advised thinking about all hotel employees as part of the sales team.
“Often we compartmentalize employees as ‘front desk’ or ‘housekeeping,’ but the hotel is a community within a community. We give incentives to employees that refer our hotel to their own local communities.”
That means incentivizing employees from across the hotel who refer the hotel as a venue for a graduation party, religious gathering or any other event.
“It comes down to training and enabling employees to refer the hotel to their communities and networks,” she said. “It’s the hotel helping other businesses and weaving it all together.”
Valtr said that strategy also underscores the importance of hiring a diverse group of people who represent different communities.
“It’s about making sure the message of your hotel is always broadcast out,” he said.
Plummer said maximizing space for revenue generation happens outside the hotel as well as inside, citing parking lots as an example.
But it’s more than just paid parking, she said.
“We own our parking lot and we have to be aware of the trends in hotels in drive-to and interstate markets and what they’re looking for,” she said. “How do we catch people on the road who might not be spending the night at the hotel? How do we make sure we have EV refueling so we can generate revenue from that? And if it can take an hour to charge the car, those people can be coming into the hotel for a snack.”
Hoff underlined the importance of profit and profit margins to all revenue-generation strategies.
“We need to be careful that all these revenue-enhancing measurements have flow-through to the bottom line, that we’re absorbing fixed costs instead of creating new ones,” she said.
Read more news on Hotel News Now.