Thinking Beyond Heads in Beds: How Hotels Can Optimize Profits in Innovative New Ways

As technology and consumer behavior evolves, all businesses find themselves at the forefront of change and, certainly, hospitality is no exception. Disruption is frequent and often undeniable, as guest expectations and industry standards shift in synchronized steps with new trends. The question for hoteliers is not, ‘what if things change?’ Rather, the question you should be prepared to answer is this: How do you adapt to change?

More importantly, how will you adapt in a way that benefits the continued growth and long term success of your business?

Over the last few years, the hospitality industry has been disrupted by new accommodation players, emerging technology, and evolving guest expectations. While certain, traditional constructs of the hospitality experience and service model will surely remain intact, it’s increasingly important for hoteliers to adapt to new trends, technology, and re-imagined revenue streams — especially those who drive profits directly to the bottom-line.

A Changing Revenue Landscape

The U.S. hotel industry is now worth $218 billion per year, with rooms accounting for $96 billion. Revenue beyond rooms is growing and hoteliers are steadily seeking out more ancillary opportunities, driven by the shifting behaviors of the modern traveler seeking accommodations.

Hotel executives, following the lead of the airline industry, are appreciating that they aren’t just selling access to only rooms and beds. In fact, revenue sources, such as F&B and other outlets (spa, parking, minor departments), achieved larger revenue gains in 2018 relative to the growth levels of the rooms department. An EyeforTravel report revealed that nearly one-third of hotels see a 25-percent boost in their bottom line from ancillary sales. And the total global hospitality market for ancillaries is worth more than $100 billion annually.

Ultimately, this shouldn’t come as a surprise. Today, hoteliers are in the business of providing guests with an exceptional experience, not merely a bed with high thread count sheets.

Redefining the “Guest”

Change is inevitable, and guests ultimately hold all the cards. That being said, what hoteliers are in control of is how they choose to adapt, scale, and evolve. Hoteliers must find new ways to engage with guests, personalize their offering, maximize off-peak times, and continuously inspire revenue. Modern guests, after all, have higher expectations than ever before, and they have transformed how they want to interact with the brands they frequent. Fueled by the growing population of millennials and baby boomers, trends such as self-care, wellness, daycations, and bleisure are driving new opportunities.

In fact, more than half of millennial women made self-care their 2018 New Year’s resolution, and ‘self-care’ was even the most popular app theme that same year. Travelers around the world made 830 million wellness-focused trips in 2017, and, if the upward trend continues (as experts predict), those numbers could reach and surpass 1 billion. Primarily ‘empty-nesters,’ it should come as no surprise that baby boomers have the time, budget, and desire to explore new luxuries and experiences.

Within this changing hospitality landscape, hotels must be resourceful, agile, and adaptable to the trends which are always making their way down the pipeline. Moreover, hoteliers need to adopt a more expansive and holistic view of the term “guest” to optimize their business.

Same Hotel, New Ways to Profit

Traditionally, ancillary revenue streams could range from late check-out to on-property spa services, hotel upgrades, venue usage, room service, and more. But thinking outside of the box, there are other opportunities within reach, such as the day pass.

The day pass provides local guests daytime use of select hotel amenities and services during off-peak times, as set by the hotel through an “amenity PMS”. This can be everything from pool loungers to cabanas, spa services, fitness amenities, restaurant reservations, and more. Hotels and resorts can seamlessly tap into this revenue boost, which can bring annual sales of up to $500,000 per year. Rather than booking an overnight room or a vacation spanning many days, guests can experience their favorite hotels in smaller, more luxurious doses. And because day guests book the hotel in the same way that overnight guests book (online reservations based on managed inventory and pricing), you can think of it as offering just a slightly different set of amenities with a different check-in and check-out time. Instead of booking a bed to sleep, a day guest books a pool chair to relax, but they are both hotel guests.

This trend arrives in tandem with the rise of ‘weekend getaways,’ where those who can’t escape for a week away, but still want to experience a smaller scale vacation or the luxury perks offered by hotels can do so with a day pass. Any hotel with amenities can create a great experience for anyone, whether they’re an overnight guest, staying in a vacation rental across town, or live close by.

Suddenly, luxury travel, and the experiences that accompany it, are more accessible to people, and extraordinarily profitable for hotels.

This is the #daycation movement, and guests are eager to indulge.

About the Author

Amanda Szabo is the Founder and CEO of Santa Monica-based ResortPass, an online booking platform for day guest access to pool, spa, and fitness amenities at resorts and hotels. A life-long entrepreneur, Amanda previously co-founded TravelShack, a booking website for travel activities, and Weddlock, a software platform for event vendors. Amanda’s background is in design, digital arts, and creative services, and has an obsession with all things resort, luxury, wellness, and spa.

About ResortPass

ResortPass is an online booking platform for access to resorts and hotels for the pool, spa, fitness, and activities. Locals and travelers can enjoy leisure amenities at amazing hotel properties without needing to book a room. The Day Guest Program provides the entire system for hotels to benefit from a significant new revenue channel: inventory and pricing management, online booking, revenue data and reporting, marketing, and full guest support. With over 300 hotel partners and growing across top brands such as Hyatt, Marriott, Four Seasons, Hilton, Fairmont, Ritz-Carlton, and many more, ResortPass is on the forefront of not only a shift in the hospitality industry but in creating a new category of how people enjoy time with family and friends, as well as those looking for some solo “me-time”​. 

A fast-growing Silicon Valley venture-backed startup based in sunny Santa Monica, blocks from the beach, the ResortPass team is excited to bring the “daycation”​ experience worldwide.  To learn more, please visit https://resortpass.com/.