Growing RevPAG through effective merchandizing

merchandize amenitiesAs an exercise, think about to how well your hotel performed during last quarter’s romantic Valentine’s Day period, then think about what’s on the books for the upcoming Easter/spring stretch. The question I want you to now be conscious of throughout is: how to capture the most revenue from each and every guest before he or she arrives on property?

A great way to achieve this goal is to properly display and merchandize all of your amenities and onsite offerings so customers can see all the experiential offerings you have available to help personalize their stays. Luckily, there are a handful of digital platforms that can give incoming guests a seamless portal by which to visualize all that’s available.

RevPAR versus RevPAG

Central to this discussion is to first understand the difference between RevPAR (revenue per available room) and RevPAG (revenue per guest). By analyzing your sales through the latter number, you can better determine what types of guests are producing the greatest profit margins.

A simple comparison to illustrate this point is by looking at a resort destination that deals with both business groups as well as free independent travelers looking for a respite. So, you have a better picture in your mind, suppose this asset is beachside, has multiple restaurants that all stay afloat purely due to beverage sales, bookable onsite activities at an extra cost and a high-end spa.

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At its significantly lower room rate negotiated as part of a massive room block contract combined with the fact that corporate guests are locked in meetings or conferences all day and thus less likely to use the full spectrum of amenities, it doesn’t take an accounting ledger to realize that those FITs are a comparative monetary boon.

Pre-arrival prompts

Once your travelers have arrived on property, they’ve likely already made up their minds about what they intend to do each day, and it is much harder to convince them to spend on the spot, especially for business guests who are laser-focused on their meetings.

By informing customers well in advance of arrival of all the options available to them, you are giving them the opportunity to passively browse through the full selection of choices with no time pressure or other more immediate tasks to distract them, and all from the comfort of their own homes.

What to merchandize

As hotel rooms are a quintessential example of perishable inventory, it stands that if you have one standard room and one suite both empty on any given night, you’re losing more money on the latter. Thus, the easiest way to start out any sort of revenue-maximizing pre-arrival system is to try to upsell guests on your suites product, much like how airlines let you select individual seats.

Segueing back to the Valentine’s Day thought in the introduction, how romantic do you think it is to enter the room assigned to you and your hubby only to realize that you have a stunning, front row view of the HVAC system on the conference center roof?

Kind of a buzzkill, no? Such in-the-moment issues and any negative fallout that percolates onto TripAdvisor can be avoided, however, by giving more context to each guestroom’s specific features including fireplaces, sofa orientations, positioning relative to the elevator and, of course, the views. Within this same example, not only could this couple dodge the ‘captivating’ HVAC view but they could also choose one of your superior rooms that happens to have an oversized, aerated tub to help make their getaway even more extraordinary.

Beyond this, ‘seeing is believing’ applies whereby any additional purchase is made all the more enticing by imagery, videos and other forms of heightened interactivity. For instance, a hotel might send out a special link to Valentine’s package buyers that displays in-room romantic offerings available upon arrival such as a bottle of chilled sparkling white wine, a tray of assorted truffles or what the room would look like if it was festooned with flowers. Now just think about how this functionality could work 365 days of the year!

It’s one thing to list off some examples of in-room amenities that can be hypothetically sold during the pre-arrival period; it’s a whole other to build a system that can load dynamic visuals into a live online platform for guests to peruse. There are now a few bespoke platforms that can bolt on to a booking engine to give you these sorts of revenue maximization utilities, so do your research to know what options will work for your property.

This article may not be reproduced without the expressed permission of the author.

Tags: amenities, merchandising, merchandizing, RevPAG


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