Airlines and also Cruiselines are focusing a lot on ancillary revenues. In both industries they are already responsible for a big chunk of total revenue and increasing steadily. Pernilla Edelsvard, Head of Digital at SAS recently said the airline now “wants to go crazy” with ancillaries and that internally it talks about “ancillary on steroids or very strong vitamins.”
For Hotels “traditional” ancillary was going in the other direction – just think of phone, Video on Demand or Wifi. But on the other hand, hotels have a much better position to gain ancillary revenue compared with airlines. Guests stay longer with hotels, they have much more options on site and off site. In addition, when the guest comes through the hotel door, this is also the area where hotels still have an advantage over online travel agents. Here hotels can up- and cross-sell from upgrades, spa treatments, fine dining, drinks at the bar, wine tasting, retail products, tickets for events, tours, bike rental, personal trainer sessions, golf tee-times, photo-safari + sweepstake, a hot air balloon ride, an airport shuttle, late check-out and the list goes on and on.
Many of this options are still not really exploited while many of them are also offering high profit margins. They also offer additional experiences for guests which might be as much as important than the additional revenue itself. Travel advice in general (like for example recommendations for events and tours) are important and increase guest satisfaction which anyway should be a main driver for up- and cross-selling.
There are already the first signs that OTAs are also looking out in that direction. Booking.com already launched an app called “booking experiences” which aims to the in-destination experience. They do so, because they want to tighten the relationship with their customers, “own” more of the experience, gain data and of course additional revenue. Each and every of this goals should better be yours too.
Wellness Hotel in the countryside, Leisure Resort at the beach or City Hotel – it doesn’t matter: in all likelihood you have a great variety of options for additional experiences and ancillary revenue, either offered by you directly or by partners. Those options have to be promoted. Fortunately technology offers many ways to communicate with your guest during their stay: Smart TV, the Wifi splash page, mobile apps, Digital Signage – all ways to be in touch.