Want to own the entire travel experience and make more money? Target the Everyday VIP.
For the past couple of weeks, we’ve been sharing coverage from our annual Hotel Data Conference, and in one of the stories I heard an interesting idea about boosting revenue, though I’m not really sure what it might mean.
Usually, I’m accustomed to hearing variations on the same theme when it comes to the topic of increasing revenue at the property level: Get better at revenue management. Look for ancillary revenue opportunities, like in restaurants and spas. Cut costs to capture more on the bottom line.
But this was a totally new idea to me and I’ve been thinking about it all week.
On the “Beyond rooms and F&B: Total revenue management practices” panel, IHG’s VP of performance strategy and planning Isaac Collazo floated the idea of tiered experiences at hotels. He said there are lessons to be learned from how music festivals and amusement parks manage to create tiered experiences based on how much consumers are willing to pay.
“There are ways to make things easier for the customer and make revenues on that,” he said. “At music festivals, you can buy a regular ticket or a VIP ticket. In hotels, we don’t really think about things that way. We need to figure out what’s a VIP item we can charge for. It helps make the experience better and makes money for the hotel.”
I’m trying to imagine what a VIP experience would be like for a hotel. Sure, there are opportunities to sell what I’ll call low-level VIP experiences—upselling a guest to the concierge lounge at a property, offering a package deal that includes some different F&B or entertainment experiences. Those things make a guest feel special, sure, but they’re low-level special, not true, velvet-rope, VIP special.
So hoteliers, if you want to create a true VIP experience, you’re going to have to go outside the hotel.
We hear so much these days about how hotel brands want to own more of the guest experience, from dreaming to booking to on-property to post-stay. I hear a lot about that, but I never hear too much about how brands are planning to execute on that concept. Sure, they’re investing in apps to make the check-in process more smooth, and content to help me learn more about the destination where the hotel is located, and a hashtag for me to use when I share my vacation photos online.
But that’s not VIP.
Mind you, I’m hardly a VIP-type person, but since I’ve been thinking about this particular concept all week, I’ve developed a wish list for what a VIP hotel experience would be like, and here it is:
First off, the flight experience has to be included. I want my flight to be part of the price, but I’m looking for more than just what an online travel agency packaged flight + hotel deal can offer. If I’m a VIP, I want the hotel to arrange my flight, but also to include airport transfers and baggage transfers. And access to some airport lounges would be nice, too. I’d like suggestions for local experiences. A complimentary cocktail never hurts. And I’d like a ride back to the airport on my way home, and someone to carry my bag.
But here’s the important thing—I don’t want this to be a luxury, Relais & Chateaux-type white-glove, velvet-rope experience. Nope, I want to be an everyday VIP.
That right there is the key—reaching the everyday VIP. That’s someone who wants a total experience and will pay for it, but who doesn’t need that experience to be traditional, over-the-top luxury in a weird, deferential way where the front-desk person knows your name before you walk in.
So that’s my interpretation of Collazo’s concept. I’m sure you have your own, or maybe your hotel already is offering some “everyday VIP” experiences that you’re getting a nice price premium for. Let me know in the comments below, or you can email me at firstname.lastname@example.org or find me on Twitter @HNN_Steph.
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