Although 3% may not seem like much, during the COVID pandemic, when hotels and hospitality were suffering huge losses in Thailand due to lack of tourism, any positive revenue gain was something of a minor miracle.

In 2022, a mid-sized hotel with 200 rooms located in Bangkok approached us, seeking ways to increase revenue. Despite being in a prime location, they were struggling to attract guests at the height of the pandemic.

After conducting an audit of the hotel’s revenue management and advertising practices, we identified an opportunity by optimizing hotel concessions.

What are Hotel Concessions?

First, let’s cover the basics.

Hotel concessions refer to additional amenities or special deals that hotels offer their guests beyond the standard room rate. These concessions can range from simple complimentary services, such as complimentary Wi-Fi, to more premium services, such as free room upgrades, spa treatments, a generous group rate, and exclusive tours. They’re excellent tools for enhancing the guest experience and boosting occupancy.

Some other common examples of hotel concessions include:

  • Food and beverage: Many hotels offer complimentary breakfast or snacks to their guests. Some hotels also have on-site restaurants and bars that provide a wide range of food and beverage options.
  • Leisure and entertainment: Hotels may offer leisure and entertainment options such as swimming pools, fitness centers, and spa treatments. Some hotels may also provide access to local attractions and exclusive tours.
  • Technology: Hotels may provide technology-related services such as free room Wi-Fi, in-room tablets, and access to streaming services.
  • Room amenities: Hotels may provide additional room amenities such as robes, slippers, and high-quality toiletries. Some hotels also offer room upgrades for guests who are looking for a more luxurious experience, such as add-on guest rooms or suite upgrades.
  • Transportation: Hotels may provide transportation services such as airport shuttles, limousine services, or car rentals.

Concessions are an important part of revenue management for hotels. By offering a range of attractive concessions, hotels can increase their revenue and enhance the guest experience. If planned properly, these guests can become lifelong patrons of your hotel.

Strategies for Offering Hotel Concessions

After evaluating the hotel’s base offer and comparing it with its competitors, we were able to generate a unique strategy to help them stand apart.

Here are some of the following strategies we used to increase revenue for the hotel:

  • Long-term package deals: We created attractive package deals that bundled various amenities and services at a discounted price for longer stays. While no one was coming to Thailand, leveraging the stays of the guests who were already here was essential.
  • Upselling: We implemented a systematic approach to upsell guests on a suite upgrade and additional guest room services. This included contacting current guests to let them know of these special offers and giving them the chance to upgrade. We were also able to find affordable luxury experiences to sell through the hotel that most guests wouldn’t normally get to experience at that price point.
  • Dynamic pricing: We implemented dynamic pricing strategies based on holidays and demand levels. This involved adjusting prices in real-time, sometimes offering last-minute deals to maximize revenue and occupancy.
  • Targeted marketing: We adjusted their promotion strategy to appeal more to local Thais with special Thai restaurant reservations, Thai spa treatments, and local tours targeted at Thais visiting Bangkok. This increased the spending from guests on the hotel’s services and increased overall revenue.

After implementing these strategies, the hotel saw significant improvements in revenue with increased occupancy.

The hotel’s occupancy rates increased by 2%, and the revenue per available room (RevPAR) increased by 3%. This was during a time when competing hotels saw massive drops in their revenues.

The hotel also saw an increase in guest satisfaction scores due to the attractive package deals and enhanced service offerings.

Strategies for Hotel Concessions in 2023

In the ever-changing landscape of the hotel industry, it’s essential to keep a keen eye on opportunities. Even in the midst of a crisis like the COVID pandemic, there are ways to create value for guests and drive revenue for your hotel.

One proven tactic is to offer complimentary perks, such as a free sleeping room or other guest rooms, which can go a long way in creating a memorable guest experience. Think beyond simple things like complimentary wifi.

Looking ahead to 2023, here are a few innovative strategies to consider:

  1. Package Deals: With hotels getting back to normal, it’s more important than ever to stand out from the crowd. Consider targeting specific guest segments with unique packages, such as a “Romantic Getaway” for couples that includes a couples’ massage, a candlelit dinner, and a complimentary bottle of champagne.
  2. Upsell New Offers: Use the check-in process to let guests know about new offers, such as a suite upgrade or a free room for a lucky traveler. Even a simple complimentary sleeping room can go a long way. This can lead to lifelong patronage and valuable word-of-mouth referrals.
  3. Test and Adapt: Experiment with different strategies to find out what works best for your guests. Families may value offers that include childcare, while young backpackers may be more interested in taxi services to and from the hotel. Finding ways to communicate directly with your guests is a great way to learn about what’s important to them.

You should always be catering your services to your target market and looking for new opportunities to stand out. Running a successful business means having accurate methods for tracking and assessing your marketing performance.

Summing Up

By optimizing hotel concessions and continually innovating, hotels can increase revenue, enhance the guest experience, and stay ahead of the competition.

Partnering with a skilled web design agency can also help elevate your hotel’s online presence and drive bookings.