Skift Report: Winning The Engagement War: Creating The Hotel Of The Future With Ancillaries
Hotel ancillaries, often known to travelers and travel businesses as the extra items — like rental cars, hotel room upgrades, spa visits, food delivery, and tours — that are bundled along with their rooms, already play an essential role in the sector’s merchandising, marketing, and revenue considerations. But even though ancillaries have always been an effective strategy to boost sales, they are no longer seen by hotel executives as a mere supplement to other travel products. Today, they are increasingly the main event.
Following the lead of the airline industry, which in 2017 earned an estimated $82 billion worldwide from sales of ancillary products, hotel executives are realizing that they are no longer simply selling access to just rooms and beds. Instead, they are now travel gatekeepers and tastemakers, selling access to a universe of related experiences connected to dining, entertainment, spas, tours and activities, retail, local services, and more. Taking this more expansive view of hospitality offers hotel businesses a variety of business benefits, including increased revenue, a more detailed understanding of the wants and needs of their customers, and an ability to drive more repeat business and create loyal customers.
But in order to capitalize on this vision, hotels will need adjust their current ancillary approach. This will involve a renewed focus on better personalizing the types of ancillary offers they promote to customers, using what they know about guests to deliver more meaningful bundles of products that align with customer needs. It also means they will need to think differently about the hotel’s overall role in the trip planning process. In addition, hotels must extend the concept of the “concierge recommendation” into the digital realm, helping travelers not just while they’re on property, but throughout the entire customer journey. Last but not least, this new approach to ancillaries will necessitate a new approach to loyalty, allowing travelers new opportunities to earn and redeem their points in new ways that help drive true customer satisfaction instead of just accumulating points.
How will hotels achieve this new vision for the future of ancillaries? What consumer trends confirm the potential of this new strategy? And what hotel brands are already finding success with this new approach? Skift and iSeatz will explore all of these questions plus much more, in “Winning the Engagement War: Creating the Hotel of the Future With Ancillaries”.