| | 8 HOSPITALITY BUSINESS REVIEWJAN -MARCH-2023ANCILLARY REVENUES: INVESTING IN THE FUTURE OF HOTEL DISTRIBUTIONBy Rhett Hirko, Global Vice President, Revenue Optimization, Preferred Hotels & ResortsArecent meeting with fellow members of the HSMAI board included a survey on the "hot topics of 2022." Among the many submissions was ancillary revenues. As the meeting host opened this up for discussion, groans were heard across the room, coming from everyone in Revenue Management. One particularly established and well-respected leader both visibly and vocally shared her frustration with the topic, summed in a similar phrase well received by all: hotels are not airlines.Let's recognize that this is a hot topic across the discipline, which is continuing to gain traction in recent years as airlines have this well entrenched ­ and, for good reason. Hotels are replete with opportunities to turn their predominantly room and F&B-based products into something more akin to the retail space. Whether selling room-related policies or attributes such as "early arrival" or "high floor" to more stand alone products such as beer from the on-premise brewery or tickets to a high-demand concert, every property has an opportunity to drive more revenue beyond just maximizing accommodations.The challenge is not in the awareness of the opportunity, but rather the required technological investment. This can be summed multifold, as follows: Hotel systems were built primarily to sell rooms. While dynamic packages broadly exist to attach ancillary offerings to an accommodation, this requirement limits stand-alone offerings that a hotel may wish to offer without reserving a room. Many reservations systems require a one-night stay. The advent of the COVID-19 pandemic brought attention to the value of day-use rooms to attract local customers, but the lag in technology has hindered the ability to achieve this. This further limits the ability to sell ancillary offerings that may require only daytime inventory (i.e. "Pool Cabana and Guest Room from 11am-4pm").Rhett HirkoIN MY OPINION
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