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Hotel Revenue Management and Ancillary Services: Strategies and Best Practices

Ancillary services, such as tours and activities, allow hotels to supplement their traditional revenue streams while enhancing the guest experience.

Staff Gudmundur

Guðmundur F. Magnússon

Marketing Manager

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Extra Revenue and Improved Service

In the competitive landscape of the hospitality industry, maximizing revenue is critical to the success of any hotel. Ancillary services, such as tours and activities, allow hotels to supplement their traditional revenue streams while enhancing the guest experience. With the increasing popularity of online booking platforms and mobile apps, hotels can easily partner with companies like TourDesk to manage and sell tours and activities to their guests while also improving their bottom line.

Let's delve deeper into the key strategies and best practices for revenue management for hotels and how to successfully implement ancillary services to maximize their revenue.

1. Understanding Guests' Needs and Preferences

To offer the right tours and activities, it's important to understand your guests' needs and preferences. This includes knowing the demographics of your guests, their interests, and their budget. Conducting surveys, reviewing guest feedback, and using data analytics can help hotels gain a better understanding of their guests' preferences. This information will help hotels tailor their tours and activities to meet their guests' needs and increase sales.

For instance, if the hotel is located near a beach, offering surfing lessons or snorkeling tours may be more attractive to guests than city tours. Similarly, if the hotel attracts mostly business travelers, offering short tours or activities during breaks or weekends can be a good option.

2. Offering Unique and Local Experiences

To stand out from competitors and attract guests, hotels can offer unique and local experiences. Partnering with local tour operators and vendors to offer authentic experiences that highlight the local culture and attractions can help achieve this. This strategy not only increases revenue but also enhances the guest experience, potentially leading to positive reviews and word-of-mouth referrals.
Hotels can also create their own unique experiences, such as offering cooking classes or wine tastings. By offering something unique and memorable, guests are more likely to choose the hotel over competitors.

3. Bundling Packages and Promoting Upselling

Offering bundle packages can increase sales and revenue. For example bundling room rates with tours or activities for a discounted rate. This strategy not only generates more revenue but also promotes guest loyalty. Additionally, promoting upselling by offering premium or VIP experiences for a higher price point can also increase revenue.
For instance, a hotel may offer a package that includes a room, breakfast, and a city tour for a discounted rate. Alternatively, guests may be offered an upgraded tour with a private guide or a more immersive experience at a higher price point.

4. Optimizing Pricing and Availability

Using data analytics to optimize pricing and availability of tours and activities is beneficial for maximizing revenue. Using dynamic pricing to adjust prices based on demand and seasonality can help hotels remain competitive and attract guests throughout the year. Additionally, ensuring that tours and activities are available during peak times and promoting them in advance can encourage bookings and increase revenue.
Hotels can also use data to determine the most popular tours and activities, as well as the most profitable ones. By focusing on these options and optimizing pricing and availability accordingly, hotels can maximize their revenue potential.

5. Streamlining the Booking Process

Making the booking process as easy as possible for guests is crucial to increasing revenue. Offering a seamless booking experience that allows guests to book and pay for tours and activities directly through the hotel's website or mobile app can help achieve this. This strategy not only increases revenue but also enhances the guest experience and promotes guest loyalty.
Hotels should ensure that the booking process is secure and user-friendly, with clear information on tour details, availability, and pricing. A good booking experience can lead to positive reviews and repeat business.

6. Promoting the Services

Promoting tours and activities through multiple channels, including the hotel's website, social media, email marketing, and in-room promotions, can increase visibility and generate more bookings.
Offering incentives such as discounts or freebies for guests who book tours or activities during their stay can also encourage bookings and increase revenue.

7. How Could TourDesk Work for My Hotel?

The TourDesk portal is customized for each reseller, usually accommodation providers. To give an example, this is how the portal looks for Hótel Borg in Reykjavík, Iceland.

In the top left corner, you will find the logo of your hotel and the subdomain will also include the name of your hotel. Furthermore, the tours are customized to its location. Krauma is a geothermal spa in West Iceland that has also partnered with TourDesk as a reseller and sells tours and activities from providers in the area around it:

Hilton Dublin Hotel also uses TourDesk to sell their guests tours and activities in and departing from Dublin.

To sum up, ancillary services offer hotels an opportunity to maximize revenue while enhancing the guest experience. By understanding guests' needs and preferences, offering unique and local experiences, bundling packages, optimizing pricing and availability, streamlining the booking process, and promoting the services through multiple channels, hotels can successfully implement ancillary services and achieve their revenue goals. With the help of TourDesk, hotels can easily manage and sell tours and activities, providing guests with a convenient and seamless experience while also boosting their own bottom line.

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