The recently released white paper Hospitality Inflation Report 2023 reveals that the hotel industry has effectively handled inflation and passed on the increased energy and labor costs to guests. Managing costs and maintaining profitability is one of the industry’s greatest strengths.
Created by SuitePad, Europe’s leading provider of in-room tablets for the hospitality industry and an expert in digital guest communication, the report also reveals that this successful cost management applies only to the Average Daily Rate (ADR) and not to ancillary services. While the average Daily Rate (ADR) in Europe increased by 18.5% to 148.9 USD in 2022 compared to the previous year, the prices for additional services such as breakfast, room service, and spa treatments were only raised by an average of 7%.
“An increase of 7% in prices for additional services is relatively high, but it remains below the current inflation rate of 9.2 per cent in the Euro area and appears even more moderate when compared to the rise in ADR,” says Moritz von Petersdorff-Campen, co-founder and managing director of SuitePad.
RECOMMENDATION: OPTIMIZE UPSELLING
”Our conclusion and, at the same time, our recommendation to the hotel industry is to review the current pricing of the above-mentioned additional services—the upselling—and to increase it if necessary. After all, if a guest is willing to spend 20 per cent more on his room, for example, they should certainly also be willing to pay 10 per cent more for breakfast.” says v. Petersdorff-Campen. The Hospitality Inflation Report differentiates between individual ancillary services and their prices, considers the different star ratings, and provides a comparative analysis of their services and prices.
USE GUEST DATA AND INCREASE ADDITIONAL REVENUE
SuitePads are used in over 1,000 hotels worldwide, spanning more than 30 countries and providing valuable data for analyzing and optimizing guest behavior across over 70,000 hotel rooms. The cloud-based software allows hoteliers to seamlessly integrate a user-friendly booking tool for additional services such as room service, spa treatments, and much more into their in-room tablets. The hotel management independently sets the prices for these services and can adjust them anytime. SuitePad uses this data to gain exclusive insights into pricing and guest behavior and to help the hotel industry maximize its revenue potential.