How often do you think about ancillary revenue?

As a small accommodation provider, your main focus is booking the rooms at your property and keeping your hotel filled to capacity as often as possible.

While selling rooms is your main source of income and the way that you keep your business running, you also need to be open to the idea of other revenue-generating possibilities.

Because when you expand your products and services, you open up to the door to additional income and increase the potential for growing your hotel in new and exciting ways.

What is Ancillary Revenue?

Ancillary revenue is defined as any revenue generated by products or services in addition to the hotel rooms that you book on a daily basis.

For example, any extras that you sell at your hotel would be included as part of your ancillary revenue.

Souvenirs, premier services and upgraded amenities are all part of the ancillary revenue that can help you increase the profits that you earn at your hotel.

Why is it useful?

Ancillary revenue can be extremely beneficial for your hotel. Your pricing strategy dictates the rates of your rooms, which ensures that you earn the base profit necessary to keep your small hotel in operation.

However, you should always be exploring additional ways to earn income. The more profit you generate, the more you can offer your guests and continue to grow your presence in the community.

Ancillary revenue has the potential to help you boost your revenue significantly, and is an important component in your overall business plan.

Here’s a few ideas of what you can do…

• Offer additional convenience services to improve the guest experience while boosting revenue at the same time. These services can include options such as shuttle service from the airport, or transportation services to attractions in your local destination.
• Bed and breakfasts and inns are starting to add additional products to their online stores to increase their presence online and develop their brand. You can use your own logo, theme or atmosphere to create unique products, such as a line of toiletry items, T-shirts, mugs, glassware and more.
• Other small accommodation providers are expanding their business, and becoming more than just a great place to stay for the night. Consider opening a restaurant, winery or coffee house on your property. Guests who are traveling from other destinations will be pleased to have convenient services available at your location, and local residents will be drawn to your location as well.
• One easy way for small hotels to generate ancillary revenue is to create product packs that are available as an extra upon booking. You might offer baskets of local cheese, wine, jam and crackers, or perhaps you can design a romance package that includes champagne, fresh fruit and flowers. Allow your guests to select these options at the time of booking to boost your ancillary revenue.
• Small accommodation providers are also finding that gift certificates are a great option for additional revenue. More people are giving the gift of experience, and a night away is an awesome way to treat someone that you love.

To learn more about revenue management and the importance of ancillary revenue, watch this on-demand webinar: