THE BIG PICTURE

While the focus of a hotel’s service design, business generating strategies and marketing spend was on room guests earlier, hoteliers are increasingly exploring revenue opportunities with ancillary departments

PRANITA BHOSALE

Pre-pandemic, revenue generating strategies in hotels were focused around guestrooms. However, the changing spending pattern of domestic travellers has seen the emergence of newer revenue mapping trends. Hotel companies are exploring innovative ways to generate business from various ancillary sources, apart from rooms.

As hotels focus on fiscal recovery, Hotelier India speaks to a cross section of hospitality professionals on how they are planning a holistic revenue management strategy. We find out how they are employing TRevPAR metrics to measure the overall fiscal health of their properties by assessing the total revenue generated on a peravailable-room basis and how regularly monitoring these numbers can give a hotel an edge over its competitors.

How did the pandemic highlight the fallacy of focusing solelyon guest rooms for revenue generation?

Varun Chhibber, Complex GM, The Leela Ambience Gurugram Hotel & Residences and The Leela Ambience Convention Hotel: Pre-pandemic, the ancillary revenue departments were aptly named, since these served a secondary role to guestrooms. A large part of our service design, revenue generating strategies as well as marketing spend was focused on room guests. However, newer trends emerged in the postpandemic era. With business travel in general and international travel in particular on hold for over a year, more than half of our business was impacted. In this backdrop, the focus of hotels shifted to domestic leisure travel.

The spend pattern of a domestic leisure guest, travelling on staycations, is completely different. As price points started to get rationalised, a luxury stay has become more affordable and a shift towards ‘revenge-travel’ emerged. With these new trends, the spending pattern of guests shifted too. They are likelier to order high-end wine or take a 90 minute spa treatment. These behavioural shifts impact the hotel’s bottom line. Consequently, hotels are exploring revenue generating opportunities with the ancillary departments as well.

Gaganjit Singh, Revenue Manager, Conrad Pune: Few hotels solely relied on room revenue. There was always a material impact of F&B outlets and catering along with other departmental revenue. However, the pandemic highlighted the need to become creative and have sound commercial know-how to get through tough times when occupancies and room revenues are lagging. Hotels with a large international corporate clientele have taken the biggest hit on rooms business and will take the longest time to recover. Hence, focusing just on room revenue alone was never a robust strategy, even in pre-pandemic times.

TRevPAR indicates the effectiveness of a hotel space in revenue generation and has a direct impact on the property’s profitability.

Sushant Sharma, Cluster Revenue Manager-North India Revenue Management, Marriott International: While the pandemic narrowed our profits through rooms, we were able to pull our topline. As a strategy, we initiated ‘Marriott on Wheels’ as restrictions on F&B and catering venues put more focus on this segment, which emerged a large contributor to a hotel’s revenue generation. The idea and purpose of the room requirement also changed during COVID-19. We were in regular touch with the government for any assistance during this period.

As hotels focus on fiscal recovery, what options can they explore for holistic revenue generation?