Learnings from retail ecommerce and why aiming for higher spend per guest is more important than higher occupancy.
Creating opportunities to maximise income across every guest touchpoint is the essence of a Total Revenue Management approach. This holistic strategy shifts the focus from ‘heads in beds’ and is a more profitable and efficient way of driving increased hotel revenue.
Hotels that invest in their direct booking channel - often the guest’s first brand experience - improve both revenue opportunities and the guest experience. By adopting tools from the retail ecommerce space to surface all products and services into easily shoppable items, hotels can maximise guest spend.
Hotels offering a multi-basket digital shopping experience see profitability quickly improve because guests feel empowered to curate their own stay experience. Furthermore, with increased profit per reservation and better direct connections with guests, hotels gain greater insight to guest profiles to evolve the offering.
However, hotel ecommerce requires a mindshift across all departments and business units. Commercialising a property’s products and services benefits from a cooperative and integrated technology stack, but once up and running, hotels achieve increased bookings whilst reducing administration.
Digital adaptations in consumer behaviour
Hotels need to respond to changing consumer digital behaviours and expectations. Consumers are accustomed to self-booking, appointment-setting and shopping without the need to speak to a customer service representative or front desk. Most importantly, they expect things to work around them and be accessible 24/7. Imagine visiting Amazon and not being able to purchase because it’s past 5pm, or finding table availability on a restaurant website but having to actually call to reserve a table. Hotels need flexibility to cater to the needs of their guests, and ensure it’s easy and efficient for guests to purchase.
Augmented shopping experiences are fueling consumer expectations - and this is affecting hotels that are not moving with the times. Shoppers expect a well-constructed booking flow with options to personalise their experiences.
For hotels to capitalise on this, it’s important to review the tech stack and ensure all aspects of the business are capable of offering digital bookings and payments. Technology offers simple and effective ways to capture previously untapped revenue from non-room activities, including opening hotel facilities to non-residents to maximise income across the property. Through cloud-based API-first connectivity, a fully integrated tech ecosystem reduces administration and alleviates time pressures on the team, earning bookings and revenue while you sleep.
The industry can no longer rely solely on room occupancy to remain profitable in a highly competitive marketplace. Furthermore, hotels cannot afford an underperforming business unit for the good of the whole. It’s time to say goodbye to RevPAR and enable all business units to contribute to revenue via a Total Revenue Management - or TRevPAR - approach.
Ecommerce enables hotels to surface all products - everything from rooms to F&B, spa and leisure facilities - within the digital booking journey and throughout the guest’s stay experience.
Airlines are steadily enhancing ancillary offerings to diversify revenue streams, driven by growing consumer demand for personalised travel experiences. However, challenges such as outdated technology infrastructure, complex regulatory frameworks, and evolving consumer expectations have slowed widespread adoption. Despite these hurdles, ancillary revenues now exceed $115 billion annually, primarily derived from airlines' own products like baggage fees, seat selection, and upgrades. The industry's ultimate ambition is to transform airlines into comprehensive travel marketplaces, providing seamless, end-to-end experiences for travellers.
Guest profiling
The better hotels understand guests from booking and spend data, the easier it is to identify the right profile of customer and target them with relevant value and product offerings. The more data you have to review, the easier it is to understand each guest behaviour type, your distribution channels, and how you can track and measure the performance of individual booking journeys.
Journey recommends hotels adopt a segmentation approach by splitting guests into audience cohorts. This could be as simple as leisure and business, or divided into more precise lifestyle demographics like family, couples, solo travellers, business travellers or digital nomads.
Facilitating ecommerce on your direct channel
Hospitality has been selling online for over 20 years. Today, it’s the norm. Yet as a sector, hotels are leaving huge sums of money on the table that can be easily resolved by recognising key features in hotel ecommerce and marketing:
All-in-one shopping cart: with all services and products within the hotel capable of being booked digitally, ensure the full menu on offer is visible in the direct booking engine. Journey Ecommerce has managed the huge feat of incorporating all bookable products and services into a single seamless shopping experience. Pre-stay booking cancellations are reduced where customers can personalise complete experiences due to investing more time in planning and curating their reservations.
Competitors: this is not only third party booking channels such as OTAs, but also other hotels. Boost your direct booking channel by explicitly communicating the benefits of direct booking including best rate guarantee, free cancellation or added-value benefits, and the wider range of products and services on offer to create a truly tailored itinerary.
Basket abandonment: it’s easy to go through the booking process and leave before confirming a reservation. Hotels can capture leakage by employing retargeting campaigns through carefully placed Google Ads or automated email marketing.
Upselling: providing a complete reservation experience highlights key bookable items ensuring that guests do not miss out on key experiences. For example, if a guest books a hotel with a Michelin-star restaurant they may expect a dining table, bringing this to the fore ensures the digital experience is adapted to customer behaviours.
Customer data: first-party data (the customer data guests are willing to give you and that you own) is incredibly valuable for understanding your customer and providing customised offers and personalised experiences. Look at how retailers like Ocado require a customer profile in order to purchase.
Payment options: consumers need choice. Integrating new payment methods from credit/debit cards to mobile payments with Google or Apple Pay and PayPal, as well as Buy Now, Pay Later options reduces the friction in the booking process and will help you convert more.
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