Maximizing Revenue: How Integrated Technology Helps Hotels Earn More

Room revenue is the cornerstone of a hotel’s profitability, but there’s additional growth potential beyond the primary offering of room sales. By utilizing a well-integrated tech stack, hotels today can optimize room pricing, enhance all aspects of their operations, and generate additional income while ensuring impeccable service and meeting guest expectations. 

This article explores how hotels leverage integrated technology to maximize revenue potential property-wide. 

We’ll dicuss:

• Hotel revenue sources
• The role of technology in hotel operations
• 8 strategies for hotels to increase revenue

Hotel revenue sources

Nowadays, hotel owners and operators pay special attention to other revenue sources outside the guestroom and take a more big-picture approach to growing their business. Although room revenue is the main source of income for many hotels, exploring other potential sources can be key to boosting overall earnings.

Let’s look at some common revenue sources:

Hotel rooms

Since this is the primary revenue stream, understanding how to price dynamically, developing effective rate plans and packages for different market segments, and strategically distributing rooms across channels are some of the crucial revenue management principles that every hotelier should apply. 

Food and beverage

F&B outlets, including restaurants, bars, room service, mini-bars, and catering, can drive sales through strategic pricing and personalized promotions tailored to guests and locals. For example, if you host a lot of digital nomads or corporate guests at your property, offering an on-site cafe could be a profitable move. The key is to track performance using technology to ensure that your offerings are relevant to guests. 

Event spaces

Conference rooms and common spaces (like your rooftop patio or beachfront restaurant) rented for corporate and social events can bring significant revenue to hotels. By offering tailored packages and marketing effectively to groups and corporate clients, hotels can attract steady bookings and secure a reliable source of income during the off-season.

Spas and wellness services

Skift predicts that the travel wellness industry will continue to grow in the coming years, reaching 1.4 billion dollars in expenditure by 2027. In line with this growing interest, lodging properties can boost their revenue by providing packages or partnering with services like spa treatments, yoga classes, and outdoor activities.

Ancillary services

Offerings like parking, in-room entertainment, bike rentals, excursions, and airport transfers diversify revenue further while enhancing the guest experience. The options are endless when it comes to the types of services you can offer and will depend on your guest segments. Using technology, you can personalize and promote these offerings throughout the guest journey at relevant touchpoints.

The role of technology in hotel operations

Modern hotels rely on several interconnected systems to manage every aspect of their daily operations, with a property management system (PMS) at the core. 

Any disconnect can cause data silos or misinformation to flow between systems. To ensure proper connectivity, more hotels are opting for cloud-based PMS’ with open APIs, making integration with additional applications much easier and more cost-effective. 

How integrated technology helps increase revenue 

There are many different ways in which technology can be leveraged to increase revenue across a hotel. 

For example, the PMS and RMS work together to forecast demand and dynamically adjust pricing strategies, while the channel manager pushes out rates and availability to relevant channels, including online travel agencies (OTAs), the GDS, and booking engine. 

In hotel restaurants and bars, the POS (point-of-sale) system is crucial in capturing and managing property-wide transactions. An integrated POS system tracks and groups all the transactions made by each guest in one folio so they can pay at checkout. 

By integrating your POS with the PMS and CRM (customer relationship management) system, you can track guest preferences and gain a comprehensive view of guest spending habits, enhancing your ability to cross-sell and upsell services like special dining experiences or exclusive access to events. 

Most importantly, you must have robust reporting capabilities to understand patterns and identify areas for improvement. With proper integration between systems, you can access comprehensive reports and simplify the decision-making process across departments. 

8 strategies for hotels to increase revenue

Here are several strategies that you can use to optimize your hotel’s revenue and boost profitability.

Implement smart pricing strategies

Optimizing revenue requires a strategic approach to pricing that goes beyond traditional methods. One way to achieve this is by using an RMS to implement dynamic pricing, adjusting rates based on real-time demand. You can also maximize revenue per guest by implementing strategies like length of stay (LOS) restrictions during high-demand periods. 

Diversify your channel mix

A diverse customer base with different stay patterns, booking behavior, and booking sources helps hotels maximize profitability throughout the year. That’s why keeping a balanced sales channel mix is important. As an example, you can lean on online travel agencies during low or shoulder seasons to drive demand and invest in direct booking strategies like metasearch advertising during peak periods to capture important guest data.

Attract group business 

Group bookings are an excellent way to increase occupancy and revenue, particularly during low seasons. By attracting corporate meetings, conferences, and social events, hotels can ensure a steady flow of bookings that result in higher overall revenue. In addition to room rates, group business can also lead to increased revenue through spending on F&B services, audiovisual (AV) rentals, and meeting spaces.

Integrate payments 

An integrated payment solution streamlines payments across hotel operations, from the spa and the restaurant to room charges, by consolidating all payment channels into a single folio. This improves the guest experience, resulting in increased spending, and reduces the probability of human errors, which can lead to significant revenue losses.

Upsell to guests

Upselling is a powerful strategy for hotels to boost revenue by enhancing the guest experience and increasing per-guest spending. Leveraging guest engagement software, hotels can offer guests upgrades or additional services, such as premium in-room features, exclusive access to amenities, or enhanced dining options, via SMS, WhatsApp, or text. 

Effective upselling leverages guest data and preferences, allowing hotels to present personalized offers that align with individual interests.

Invest in F&B

Offering bundled packages that include dining credits or special culinary experiences encourages guests to spend more within the hotel. Hosting themed events, like trivia night, cooking classes, or wine tastings, can attract local patrons and boost F&B revenue year-round. Dining promotions and loyalty rewards can also foster repeat bookings, increasing overall revenue.

Offer experiences

Whether it’s a music festival, a sporting event, or a meal at a Michelin-star restaurant, travelers today want more from their trips than just a place to sleep: they want an experience, and hotels are in a unique position to help meet these demands. In fact, 61% of travelers are willing to pay more for personalized experiences. 

As a hotel, you can use the guest data collected through the CRM and PMS to offer tailored packages, such as concert tickets, dinner vouchers for local restaurants, or exclusive concert merchandise to cater to your guests’ unique preferences.

Analyze data 

Understanding the data you collect through your tech stack is key to staying competitive. By analyzing data from your PMS, guest engagement systems, POS, CRM, website, and booking engine, you can gain insights into guest preferences, spending patterns, and booking behaviors. Doing this on a regular basis can help you identify trends, predict demand, and implement strategies to improve operations, ultimately driving higher revenue and guest satisfaction.

Diversifying revenue streams

Diversifying revenue streams and harnessing the power of integrated technology enables hotels to boost profitability and reduce dependency on room revenue alone. Through dynamic pricing, effective upselling, optimized F&B operations and personalized guest experiences, you can achieve greater financial success and deliver exceptional value to your guests.