As we learn to live with the ongoing pandemic, companies have faced a need to change their market strategies as well as operational strategies. Various industries – hospitality, and travel in particular – are trying to recover by reopening their services in limited capacities where possible. Things have changed due to the lockdown and just re-opening a property is not enough to bounce back. With minimum occupancy rates and competition for diminished market share strong, hotels have taken to adopting new solutions. In times where properties are barely breaking even and attracting customers is difficult, hotels need to make an offer that simply cannot be refused!
So, how about removing the need to pay for rooms? Is it possible? Are hotels capable of making enough ancillary revenue to survive without charging for rooms? Okay, probably not. And why would you? But stick with us for a minute, there’s a point to make here.
A new practice gaining popularity in the hospitality industry is ‘Augmented Hospitality’.
Augmented hospitality is a new approach to hospitality that focuses on personalized services offered to a wide range of consumers – inside and outside the hotel. A perfect example of this is the Bermondsey Square Hotel in London, they have adopted this practice by offering their services to Neighbouring Airbnb hosts and guests. These Airbnbs can use services like housekeeping, maintenance, luggage storage, and so on. This not only brings in more clients, but it also creates a loyal customer base and an authentic, community-driven brand. This approach also diversifies hotel revenue streams, reduces overexposure to OTA-driven room rate price wars and increases demand as guests look more and more for a cultured experience in a city.
For example, hotels can explore augmented hospitality by offering up their services to different markets. Hotels can become a core part of their local area’s ecosystem by offering their services to businesses and consumers alike. They can expand their services outside their hotel property. Aside from housekeeping services mentioned previously, hotels can also strive to innovate the use of their space. Refining a unique dining experience, a move into co-working spaces, and embracing community activities such as local markets can all have a positive impact on the bottom line and brand perception within the community.
Services like Food delivery (room service) and car rentals can also be made public and available to the locals. Collaborating with companies like Uber Eats and local food delivery services is also an option. Hotels are known for excellent food and customer service; they could consider expanding this value with pop-up restaurant or bar collaborations in venues outside their hotel compound.
Hotels can also renew their focus on providing a complete experience through their ancillary services. A hotel ancillary refers to supplemental products or services the hotel offers to guests in addition to a room.
- Rental cars & transportation
- Food delivery and Takeaway Food
- Experiences & tours
- Airline tie-ups
- Spa, massage, and wellness services
- Butler Service
- F&B offerings and room service
Unique, carefully designed ancillary services can be used as leverage to convince people to consider “staycations” in property throughout this time of COVID and raise overall property revenue. Hotels looking to innovate can offer attractive services to guests like “pup-friendly” staycations loaded with full menus designed to pamper owner and pooch or healthy packaged meals for a family day out.
This move into a more collaborative, community-driven space and a focus on ancillary services open up revenue and branding opportunities which should be considered. The pandemic and incoming new normal are demanding a more thoughtful approach toward the market. The traditional hotel business model may not be enough to stay relevant in this rapidly evolving and competitive market space and properties need to be willing to shake things up to attract new guests and new revenues. The travel boom has been put on hold, and the brave operators who dare to reimagine their place in the world will find their way to the top through the coming years.