A change is as good as a rest: the popularity of hotel repositioning

Back in 1899, the head of the US Patent Office, Charles Duell, secured his place as a little footnote in history. His organisation got smaller and eventually closed down completely, and when it did, he said it was “because everything that can be invented has been invented”.

While that story might be apocryphal, it’s a sentiment that is often on show in the hospitality world. There is brilliance and knowledge in the industry and many inn holders are excelling in utilising and maximising innovation and increasing revenue in all of their hotel spaces, but is there real innovation? Is it going far enough to make an impact?

Hotels are large and complex organisations with plenty of moving parts. Rooms are obviously the largest revenue generator, followed by food and beverage, and then additional services such as spas or conferencing. While there are a number of general measures of performance, such as RevPAR, which assesses how well a particular property is doing in its different business centres, it can be challenging.

Benchmarking tools such as HotStats are available, but how do you use the data? How do you know if your spa revenue this year is good or bad? What sort of performance should you really be expecting from your dining room? How do you set your targets?

Stuck with this sort of uncertainty, the answer may be more about making incremental gains and first setting yourself a starting point using your current performance. The best way to do that is to go back to basics and remember the fundamentals – you exist to provide a great service to guests.

The challenge now is making the best use of every available inch of space to do that in a profit-making way. Once you have a handle on how much each part of the business is contributing, it’s easy to see if new ideas deliver benefits. Set yourself a revenue target per SqM or SqFt that you want to achieve and you will have a starting point to assess how to maximise the use of your total space.

City centre and resort hotels are completely different beasts, but the concept is the same. Can you introduce improvements in the way you present your services or new commercial spaces that drive revenue? In an urban environment, a hotel may have a small bar but large lobby, for example – merging the two is a simple way of reimagining space in a customer-centric way. Likewise, what about offering a work space, private dining or meeting space in rooms during the day, squeezing extra revenue between check-out and check-in when they are (otherwise) unoccupied.

Beyond that, look right across the hotel estate for more opportunities. Car parks can be sublet to neighbouring businesses or rented out on an ad hoc basis. Alternatively, there’s the option of outsourcing the entire operation. In resort properties, are there gardens that might make good wedding venues, or places to host morning yoga or kids’ activities? All of these hit that sweet spot of enhancing the guest experience. It’s not just guests in the mix either – if your conference facilities are empty on the weekend, they might be perfect places for a community event. 

Getting the most from F&B is perhaps the most frequent challenge of the lot. Very often, hotels have sophisticated software and teams of people dedicated to maximising yield from rooms, yet have nowhere near that attention to detail on eating and drinking. Social media has made people far more curious and more willing to accept change, which opens up a world of possibilities to introduce new ways of operating. Doing away with fixed menus that are costly to print and instead flexing your previously set prices for each dish is easy if you have an iPad menu that you can change for each meal time, depending on your demand. 

You could even try different cost-conscious menu options for families with kids that prefer to eat early or bring seasonality to your cocktail menu within a few seconds. For some added theatre, an ice cream trolley or fancy drinks cart that pops by your pool twice a day is a brilliant way to tip guests into spending more.

This new-found trend towards convenience and technological innovation means guests are far more willing to embrace change. The way bigger brands and budget chains have moved towards automated check-in is a classic example, when done in conjunction with the ‘reassurance’ that a member of staff is still available – should guests encounter issues.

Think through what it all means to the guest experience – only do it if you think it will enhance the experience, but bear in mind that simply plugging in new ideas isn’t as simple as it sounds. Your car park might look like a great venue for a drive-in movie, but don’t jump in unless you’re sure the demand is there, so do your customer research. 

With that in mind, it’s clear to see the benefits that partnering with third-party providers and well-known brands can bring. Outsourcing a spa to a world-renowned partner, for example, can really deliver kudos to your brand. As well as offer a great product, you get to benefit from the glow of your partner, and can structure the deal in a variety of ways – either a simple rent, revenue share or with incentives – to cash in and create a win-win.

Finally, remember that optimising the value of space requires expertise. The best waiters and spa therapists know their business and are top salespeople, too. Their upselling expertise is essential and training is the thing that really nets results, so perhaps start there.