HOTEL BUSINESS REVIEW OCTOBER FOCUS: Hotel Revenue Management
Identifying Ancillary Revenues and Driving Additional
Revenues
By Shawn Tarter CEO & Founder, RealTime Reservation | October 2022
When thinking of ways to increase
revenues, most revenue managers
focus on the room and look for ways to
increase revenues by offering early
check-in, late check-out, upgrades to
suites and other room types, as well as
generating no-show revenue.
Last month, however, I had the
opportunity to participate in the HSMAI
ROC conference in Orlando and spoke
on a panel focused on increasing
additional revenue.
Organized by Nancy Johns, Senior Vice
President, Integrated Marketing +
Digital Solutions for Crescent Hotels
and Resorts, and together with my esteemed colleagues Linda Gulrajani, Vice President of Revenue Strategy
and Distribution, Marcus Hotels & Resorts, and Kelly McGuire, Managing Principal, ZS, the conversation led us
to explore all areas of the hotel. We honed in the search for opportunities in departments such as food and
beverage, parking, recreation, and amenities, for the next level of ancillary revenues, while enhancing the guest
experience.
Although occupancy rates and room revenue projections are now approaching 2019 levels, the outlook for
ancillary revenue is expected to lag behind due to business travel, meetings, and a slower return of group
bookings. A Global Business Travel Association (GBTA) report estimated a full recovery of global business
travel by 2026 – a result of many factors such as the Russian-Ukraine con�ict causing in�ation, high energy
prices, labor shortages, supply chain, and frequent lockdowns in the world’s largest nation, China. Although, in
2021 business travel reached $697 billion, the number is considerably lower than 2019 pre-pandemic spend
levels at $1.4 trillion. With four years of continued challenges to consider, hoteliers are looking to additional
revenue streams to encourage and boost spending.
To stay ahead of the competition and help your business recover faster than those hotels that rely only on one
revenue stream, it is prudent to create a well-formatted ancillary revenue strategy. For example, walk your
property and identify under-used areas, i.e., gardens, lobby, and board rooms. Ask the team if this space could
generate revenues by offering food & beverage delivery such as picnic baskets or special occasion dinners,
celebrations outside of catering, identifying communal workspace, or promoting outside guest passes to the
local community. With meeting rooms available and unused, properties have more opportunities to engage
with its customers by repurposing spaces with new activities.
We all know the saying, “what gets measured gets done”, starting with charging the basics and identifying how
these are posted, who is auditing, who is accountable, and how it is tracked. These basics include fees for no
show, early departure, early check-in, late check-out, pet fees, cancellation fees, rollaway, mini-bar, room
upsells, and most recently, resort or facility fees. Other areas to look at beyond room upgrades, include
standards such as dining, golf, and spa to the non-traditional parking, rooftop space, pools, cabanas, beach
rentals, community workspace, food & beverage, and activities. Having set procedures and audits in place will
automatically increase these ancillary revenues and the result will �ow to the bottom line.
With the leisure customer looking for unique experiences, hotels are able to be creative and innovative while
enhancing the guest’s journey. This is also an opportunity for teams and departments to work together,
brainstorm the “right” activations for their hotel, and increase brand awareness and values. Additionally, new
data products provide comprehensive reporting on guest’s preferences and their go-to amenities they book
during their stay. Management can recognize and identify offerings and revenue streams that work for their
property and which ones do not. By eliminating service amenities and activities that are not requested and
that do not generate signi�cant revenue, resources can be reallocated elsewhere on the property. The goal is
to increase revenues and create memorable experiences for your guests.
What we have found is that by expanding offerings and letting the guest personalize their stay, you unlock
additional opportunities for revenue streams. This becomes a core part of your business strategy. Identify
technology that can assist in automating processes, make suggestions, and empower the guest.
The following outlines some general ideas that are easy to implement:
• For hotels that have a Fitness center, add the sale of water and juices. Use QR codes to open refrigerator
units and capture payment. Utilize unused meeting rooms and partner with local �tness instructors to
design workout programs for guests and locals.
• Re-imagine the pool deck, cabanas, day beds, and pool chair rentals. Treat pool and beach cabanas as a
room, yield weekend vs. weekday and half-day vs. full-day. Create sunset evenings by the pool and beach
and add dining experiences. Customize the offerings or amenities by adding games, such as PlayStation
or Xbox. Stock suntan lotions and drinks. Develop innovative packages, such as girls day by the pool,
special occasion, bachelor, or bachelorette packages. Most importantly, empower the guest to personalize
and reserve in advance.
• Make amenities available so anyone can seamlessly purchase and send a thoughtful gift to their friends or
family staying at the hotel, or even to themself. Merchandise birthday celebrations, anniversaries, romance
nights. Allow operations to establish and customize offerings based on your property, develop lead times,
and automate tasks where possible. Design a section of the website to display offerings and create
booking links with photography for a more visual appeal. These suggestions increase pre-arrival orders,
capture payment in real-time to ensure no lost revenue, while exciting the customer for their upcoming
visit. These small changes allow you to take advantage of current conditions and challenges that your
property is facing so that you can transform it into a positive outcome for both the hotel and its guest.
More ideas may include the following:
• Consider packaging the airport shuttle with property parking, special events with photography services,
and waivers with activities, all incentivizing guests to take advantage of both offerings at once.
• Activate your lobby, unused meeting rooms to create day use, co-working spaces, and private rooms
attracting the work-from-home clientele. Based on availability, manage areas by yielding by the hour or by
half-day vs. full-day. Establish an easy-to-deliver menu; use QR codes in spaces for food & beverage
ordering. Utilize room service for delivery. Customize the offerings or amenities- including AV equipment,
conference phone, pads & pens. Create packages for the size of groups or single users, which might
include coffee, light bites, �ip charts, and AV.
• Developing ancillary strategies is not just for resorts but can be applied to select and limited-service
hotels. Many of these hotels have small lobby marketplaces. By using QR codes on the key packet and in
the room, the property can create an in-room grocery shopping experience where guests can order snacks
and beverages from the market on their phones. Through integration with the POS and credit card
interface, attendants or front desk bags the order and guest pick up. This makes for a �awless exchange
between the guest and management.
• Don’t forget about your group customer. Just like your leisure customer, the guest that is part of a group is
also looking for unique experiences. As companies are looking to engage their work from home
employees, meeting and group business is slowly returning to the hotels. To cater to this market segment,
hotels must think outside the box and develop unique events that enhance the group’s time together. By
developing these activities, you keep them onsite and increase additional spend. Internally, it would be
best practice to incentivize your sales team on selling ancillary revenue. By looking at all sales market
segments and identifying ancillary contributions, the overall �nancial performance will be impacted.
As you and the team identify customized revenue opportunities, you must remove roadblocks by allowing
guests to do things digitally pre-arrival and during their stay. Be sure to engage your marketing team. Track
what channels, rate codes, and demographics have the highest ancillary spend. Update your website to
promote and book all ancillary opportunities. Let potential guests learn about your amenities and reserve and
customize their stay.
In summary, the good news is although ancillary revenue levels have not returned to levels seen since the prior
to the pandemic, the industry is turning to technologies that provide guests with the opportunity to engage in
extra activities during their stay. Hoteliers are realizing that to maximize revenue opportunities and enhance
the guest experience, one must embrace a comprehensive revenue management strategy that looks beyond
the room rate and extends to total revenue management.
That said, use technology that empowers the guest to book and pay for dynamic packages, activities,
cabanas, and 24/7 food & beverage, all from their personal devices. These technologies also ensure there are
Mr. Tarter
Shawn Tarter is CEO & Founder of RealTime Reservation, an organization that provides real-time
inventory management reservation software to the hospitality/travel industry. Mr. Tarter
recognized opportunities at many properties and was eager to provide hotels with ways to
improve the customer experience while providing services that support client satisfaction and
loyalty. In 2015, he founded Ipalapa Corporation which was rebranded in 2018 to RealTime
Reservation. In the three short years since its rebrand, the company has experienced signi�cant
sales and revenue growth, despite operating during a global pandemic. Today, the company
employs �fty professionals across development, R&D, client services, administration, sales, and
marketing and boasts more than 500 clients.
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no missed opportunities with both leisure travelers and business travelers. Include links and QR codes in
con�rmation letters and pre-arrival Letters, calling out the properties offerings during the guests stay. Upon
arrival, prepare the key packet to include a link and QR code to the list of activities as well as provide a text
message after check-in and during the stay.
By making such QR codes and links accessible and easily available to guests, they become more likely to
engage with the technology and book additional amenities and services. By promoting these marketing
techniques prior and during the guest stay, the hotel is using technology for its advantage.
