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With my workshops and speaking I often do an exercise where I challenge each leader to find a minimum of $250 in next month’s forecast that can be savings in the form of reduced payroll or expenses. It can also be a source of new revenue. The participants come up with some amazing ideas that really work. The great thing about these ideas is that we almost always get to repeat and compound. An idea that works next month works EVERY month. Read more about creating asset value here.
In this piece I am going to share one of the best revenue-generating and guest-pleasing ideas that my clients have come up with. It’s something that just about any hotel can do and it costs nothing to create. I talk about this idea and several others in my live work, but it was a client who experienced the opposite that prompts me to write this. More on that at the end.
My client was a busy and trendy hotel near the beach in SOCAL. I was living in Orange County in a little town called Corona Del Mar at the time. I visited this hotel several times over a 6-month assignment and each month I delivered a new financial workshop and I also coached the leadership team 1-1 – developing their financial muscles and sharpening their skills.
One of my workshop exercises involved a breakout where individuals were paired up and their instructions were: Sit with your partner and come up with an idea to increase the profit or reduce the expenses for your department next month by a minimum of $250. You have 12 minutes and when you come back, you’re going to present your idea to the group and the best idea today wins a prize – happy hour with the GM, cocktails and hors d’oeuvres included.
Now you must understand nothing motivates hotel leaders like free cocktails and the recognition that goes along with quality time in the limelight with the GM. It’s just what leaders crave in a happening hotel.
The session yielded some interesting ideas, but one idea that the housekeeper and revenue manager came up with was a real game changer.
The hotel has 200 rooms and was very busy on weekends and holidays. The hotel was a small brand and almost one-third of the reservations were direct via their website or phone. The revenue manager knew that the number one guest request was “early arrival.” Why not when you can get an extra few hours on the first day of your mini-break with your kids at the beach or your best friend at the pool.
The housekeeper knew that even on the busy weekends there were a minimum of 25 checkouts on Friday and Saturday. Salt just met pepper. Their idea was to start to sell an early arrivals program. They came up with a plan in their short time together.
Using the reservation team and their website, they would now be able to satisfy one of the number one guest requests: “Can we arrive early?” Answer: “Yes you can; we have an early arrival program, and you can purchase it and arrive any time after noon.”
They would train the reservations team to respond to the request when they had callers, and their website would highlight the additional service and would direct the guest to call the hotel directly to make their booking and secure their early arrival. The housekeeping team needed to respond and prioritize the cleaning of the checkout rooms first. The front office team also needed to minimize any late checkouts.
That was it. Their presentation drew an incredibly enthusiastic response from their peers and some good questions.
“That’s a great way to make a stay more valuable,” the GM said. The DOS commented that he thought it would help lower OTA costs by directing the clients to call the hotel “just like the old days.” Another person chimed in that it would help boost pool F&B sales.
Some excellent questions also emerged:
- How much are you suggesting we charge for the extra few hours?
- How will we control the number of early arrivals allotted each day and how will the front office and housekeeping be able to coordinate this.
- Is this a taxable sale?
- What happens if we don’t have rooms available?
- What happens if the guest wants a particular room type?
All the comments and questions were well received and one of the rules of the game was – there were no bad ideas!
In the following weeks they rolled out the idea and in the first three months the hotel generated over $35,000 in additional revenue. The operational challenges were overcome, and the best part was the guests loved it.
So back to the prompt for this piece. A current client was attending a Halloween event in LA and had booked a hotel nearby. They arrived at 2:30 and tried to check in. The desk clerk informed them that it was $75 to check in early. My client was &%$$*!. $75 for 90 minutes! Her husband said, “Just pay it, we’re here and I want to get my stuff.” Neither was happy and the surprise was not appreciated.
Don’t set guests up for disappointment – set them up for more fun and they will love it.
Happy guests and more money – what could possibly be a better cocktail!
Asking your leaders for new and innovative ideas is always in vogue.
For more profit improving ideas check out my website and YouTube channel.
Coming Soon in 2022 – The Prosperous Hotelier
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https://hotelfinancialcoach.com/video-course/
https://www.ahla.ca/financial-leadership-david-lund/
https://video.tourismworks.ca/en/financial-leadership
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Strategic Hospitality Financial Leadership Workshops
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Contact David at (415) 696-9593
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