5 Tips for Diversifying Your Hotel’s Revenue Streams

Trade Secrets | Making a Profit

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For a hotel, establishing new revenue streams can make the difference between scraping by and truly thriving.

In this article, we dive into why looking beyond traditional room bookings for revenue opportunities is an excellent idea for hotels. After that, we’ll explore some ways you can expand your hotel’s revenue horizons.

Finally, we’ll show you how to set up and promote your new revenue streams – and where a strong PMS can help you start reeling in that extra profit fast.

Why diversify your hotel’s revenue streams?

It’s never a good idea to put all your eggs in one basket! You know that the hotel business can be unpredictable. Occupancy rates may be seriously impacted by factors like seasonal changes in demand, economic downturns, or unexpected crises. And any prolonged dip in occupancy poses a greater risk to your business when your rooms are your hotel’s sole source of revenue.

Expanding your hotel’s income sources allows you to spread this risk and stay resilient against market changes. By diversifying what your hotel has to offer, you’re encouraging a more stable cash flow. You’re also catering to the tastes and needs of a wider range of guests.

As a result, you’re more likely to attract a broader clientele and deliver the great guest experiences that make your business more profitable.

Now let’s explore some of the ways you can add more sources of revenue to your hotel business.

1. Profit from all your hotel’s spaces

As a hotelier, you’ve probably used to measuring your performance in relation to rooms, through metrics like RevPAR or occupancy rates. Yet looking beyond your rooms can show you other ways you could be earning revenue.

What are some of the other spaces in your hotel that you can leverage for more profit?

Indoor Spaces

Do you have any spaces that can be used to host special events like group get-togethers or family reunions? How about corporate events like team-building exercises? Doing so can be a great way to attract large corporate groups.

The rise of bleisure travel (the combination of a work trip with an extended vacation) also presents an opportunity to attract guests looking for a co-working space at their accommodation.

Outdoor Spaces

Now think beyond the four walls of your hotel! Your outdoor spaces can be just as attractive to guests as your interiors, especially in the warmer months.  Do you have any gardens, rooftops, or patio areas that you can transform into hirable event spaces or relaxation areas? Maybe you have just the spot for hosting regular outdoor movie screenings, or ‘secret garden’ retreats.

Overall, it’s a smart strategy to make the most of all your available spaces to generate additional income. And they don’t have to be as elaborate as an indoor meeting hall or outdoor lawns. Even having parking spaces on-site can be a rich source of extra revenue.

A hotel's spacious outdoor gardens, providing a lucrative extra revenue stream.

2. Expand your food and beverage options

Do you have a restaurant or bar at your hotel? If yes, that means you’ve already cooked up an additional revenue stream. Great! But could you be earning more from it?

Here are a few ways to expand your menu and earn more revenue from food and beverages:

  • Create special menus for guests at certain times of the day, month or year. Consider collaborating with local chefs to spice up your usual menu by adding unique dishes or themed cuisines.
  • Use your restaurant and bar to attract local patrons. People living or working nearby want places to eat and drink too. So make them the ideal targets for your new lunch deal or daily happy hour.
  • Run cooking classes in the kitchen. Want to serve up a memorable experience for your guests? Offer interactive culinary classes where guests can learn to prepare local dishes during their stay.
  • Bring the restaurant to your guests: If you offer suites with kitchens, why not upsell hampers filled with local treats? This allows guests to cook up a delicious lunch or dinner for themselves from the comfort of their room.

3. Focus on experiences

In today’s travel landscape, what really sets your hotel apart is the unique guest experience that you offer.

This requires you to think about the big picture rather than small upsell opportunities. Ask yourself: what are my hotel’s biggest USPs or clearest values? Then start thinking about how can you use your answers to create robust revenue streams.

Let’s take a look at some examples. Maybe your hotel’s best asset is its prime location. Is the local area one of outstanding natural beauty? Then take advantage by setting up outdoor tours or guided walks. Are you located near a popular local attraction? Consider partnering with its managers to offer your guests discounted tickets. Alternatively, provide themed extras that tie into the attraction (think on-site art classes if you’re near a renowned museum).

Many hotels focus on providing a great experience for guests looking to focus on health and wellness. If you decide to offer guests a relaxing escape, then consider providing wellness retreats, yoga classes, or spa packages. If your brand is more focused on getting active, then how about creating fitness programs by partnering with local gyms to offer exercise classes on-site?

Once you have a clear picture of the experience you want to offer guests, you can begin identifying additional revenue streams for the taking!

Note too that, for all the above examples, it’s helpful to partner with local experts and/or providers when creating your experience. In addition to lending legitimacy to what you’re proposing, this creates great opportunities for cross-exposure, as effective partners typically end up sending business to one another.

A group of hotel guests participate in an onsite yoga class.

4. Bring it all together: Packages, upsells and marketing

So you’ve crafted the most enticing experience for your ideal guests. You’ve found the ideal space to hold it in. And you’ve figured out how to enhance your food and beverage selection too.

The question now is: how do you make sure that travelers take advantage so you can start profiting from your new revenue streams?

One must-do to generate revenue from your offerings is to upsell, upsell, upsell! Don’t wait until guests get to the front desk to present your extras. Give them the ability to book their special dining experience, spa treatment, or local tour online before they arrive.

Use the experience you’re providing to identify other nifty extras to upsell. Are you offering a walk in the local natural surroundings? Upsell binoculars for the perfect view – or umbrellas to ward off any unwanted rain! If your focus is on custom luxury, give guests the ability to book the exact view they’d like for an extra fee. The opportunities are endless!

The next level to turning your new experience into concrete revenue is to craft special packages. Combine your room rates with your local tour, unique dining experience, or luxurious spa treatment. Creating an enticing package is yet another way to upsell, especially to travelers who really want something special from their stay.

The other must-do here is to make sure you’re marketing your hotel’s extra revenue streams in all the right places. Can guests book their extras or packages in advance of their arrival? Are they visible – and bookable – on your website as well as the front desk? Make sure you’re leveraging all the communication methods at your disposal to communicate your extras to guests, from your email marketing to your social media.

A hotel's online banner advertises an extra of champagne on arrival

5. Make it easy with your PMS (Property Management System)

Your PMS can make it simple for you to set up, roll out, and market your hotel’s diversified revenue streams. Check that your system allows you to do the following:

Promote your extra revenue streams on your hotel’s website

Your website is your hotel’s online storefront, so make sure your extras are front and center. eviivo Suite’s templated website designs include a ‘Facilities’ page as standard, but you can also add custom pages to show off any other special spaces or services.

Top tip: People want to see what they’re booking, so make sure to include hi-res photos on your website at the very least. If you really want to show off your new experience, consider providing a 3D virtual tour, which you can also add to your templated eviivo website.

Add extra charges to your website and selected OTA sites seamlessly

Displaying your extras online is the first step. You also want to make them bookable.

eviivo Suite allows you to either pre-select from a list of charges that are commonly accepted by OTAs or create a custom extra charge. For each charge you set up, you can:

  • Define its price and tax rate.
  • Configure when it is added to the guest bill.
  • Review how each OTA handles custom charges (using our detailed table).
  • Decide which OTA channels it gets displayed on.
  • Set its display name, description and any image.

You also have the freedom to decide when you pre-authorize or collect payments automatically for your extra charges. Because eviivo Suite allows you to able to set separate payment schedules for extras and other payments (like booking fees), you can collect payments on your revenue streams when it best suits your business.

Upsell extras throughout the guest journey

Use your PMS to send automated emails to guests that promote your extras. Schedule your emails to be sent to guests at any point you choose, before and/or during their stay.

Make non-room spaces bookable

You can add an “offline room” to your booking planner in eviivo Suite. This allows you to manually add bookings on selected non-room revenue streams like your space-for-hire or parking spots. These bookings will sit alongside your room reservations in the planner, so you can see the statuses of your rooms and ‘non-room’ at a glance.

Create special packages from your offerings

The best way to turn your additional revenue stream into an irresistible experience is to incorporate it in a special packaged offer. In eviivo Suite, you can combine your extra with a rate plan and promo to run attention-grabbing special packages. You can also add a fully customizable pop-up announcement to your homepage to put all eyes on your promotions, packages and special offers.

Integrate your PMS with your points of sale

If you use an electronic point of sale (ePOS) solution to handle transactions on your extra revenue streams, then it’s important to keep your charging, billing and invoicing as streamlined as possible. Make sure you can integrate your PMS with leading ePOS (electronic point of sale) solutions like WRS Systems, Tevalis and L’addition to keep everything seamlessly centralized.

Ensure payment security as your revenue streams increase

More revenue streams can mean more risk. So always make sure that your PMS can process payments on all your bookings and extras in full compliance with PCI-DSS standards.

Monitor performance of your revenue streams

By keeping track of how your non-room revenue streams perform over time, you can review and refine your diversification strategy for maximum returns.

eviivo Suite’s custom reporting capabilities allow you to analyze and compare your non-room revenues over specific data ranges. This can give you valuable insights on when your extras are performing best.

Conclusion

Diversifying your hotel’s revenue streams is not just a good idea—it’s essential for maintaining your profitability in a competitive and unpredictable market.

Get started by exploring and implementing ideas that best fit your hotel’s brand, whether they involve leveraging unused spaces, enhancing your food and beverage offerings, and/or focusing on unique guest experiences.

With a robust Property Management System (PMS) by your side to help you set up, promote, manage, and take payments for your new revenue streams, you can ensure a steady cash flow.

5 Tips for Diversifying Your Hotel’s Revenue Streams

Key Takeaways

  • Maximize All Spaces: Consider making use of both indoor and outdoor areas to generate additional revenue.
  • Focus on Experiences: Offer unique experiences tailored to your hotel’s strengths, such as local tours, wellness retreats, or fitness programs.
  • Consider Partnerships: Collaborating with local chefs, fitness instructors or masseuses can be a great way to legitimize your experiences and cross-promote.
  • Enhance Food and Beverage Options: Attract guests and locals with special menus, cooking classes, and in-room dining hampers.
  • Effective Upselling and Packaging: Create attractive packages combining room rates with special experiences, and upsell your extras online at various touchpoints.
  • Utilize Your PMS: Ensure your PMS can help you promote, sell, and manage your new revenue streams seamlessly.
  • eviivo Suite allows you to easily add, promote, manage and accept payments on your extra revenue streams, entirely from within our all-in-one platform. Book a free demo to see how our all-in-one PMS can generate more revenue for your hotel business.

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