We are pleased to publish another post from Hosteltrends, this time on Ancillary Revenue.
The airlines have totally mastered getting extra revenue from all of us (booking direct with Jetstar in Australia take 15 mins!), hotels are doing a lot better and hostels are catching up.
Great systems like GuestCentrix Hostel.Web PMS allow you to capture ancillary revenue easily.
Included in Hostel.Web is a totally configurable web based Point of Sale which can run a small bar or cafe. The system also supports a range of check-in up sells with one click.
Additionally hostels, hybrids and hotels can now set up packages online eg Welcome to Big City packages in SiteMinder’s Booking Button that could include include 3 nights accommodation and Extras such as airport shuttle bus transfers and city tours. The cost of those extras can be mapped directly to GuestCentrix PMS.
The up selling ancillary revenue options are endless and they don’t come with a hefty reservations data entry price tag!
Here is the HostelTrends blog
Ancillary revenue, or cash from things other then renting beds, plays an essential role in running a successful hostel no matter what kind of strategy a hostel is running, and almost all hostels obtain this revenue in one form or another. Ancillary revenue can either increase your overall revenue, motivate and reward good staff, or even just grow additional value to your product. The trick to it is to determine where your customers are spending money outside your establishment, and bring it inside or at least make a partnership out of it.
Here is a way to consider what could be right for you, no matter what size hostel you run.
Food and beverage can be a breadwinner. Large and Mega hostels can pull over 50% of their revenue from doing this right and have entire teams dedicated to this, serving hundreds of pints and meals a day (Generator Hostels, St Christopher’s Inns, and Freehand have built a reputations doing so).
Hostels like these have an advantage to hotels, because there are more heads per key (room) to come down and enjoy what is offered. In order to drive people to their bar, these hostels usually have a “No Outside Food or Drink” policy that can go against some customers expectations of a hostel. Small hostels on the other hand can sell snacks and beverages at their desk. They can have a fridge full of beverages, and sell in person. This personal level keep interaction high with the guest and lead to higher satisfaction. Small hostels can also organize meal nights having the guests pitch in and share a meal.
Medium hostels, on the other hand, is where the creativity comes in. They need to determine if it is worth the licencing and regulation to have an official bar or kitchen in their space, or perhaps ignore those regulations all together. What seems to work best is vending machines, for snacks, toothpaste, toiletries, etc. You can choose to do meals like the small hostels, or let people have their own. Do you see your guests all ordering the same pizza? Perhaps you can form partnerships with local food establishments to make the ordering process easy (especially your guests don’t speak your local language). You can ask for a commission, or even for them to just give your guests a discount if they use the code. If guests are able to bring their own alcohol then they might be more willing to order food through you.
For the full post and some great tips and ideas click over to HostelTrends here