As today’s travelers seek more personalized experiences, hoteliers need to develop holistic retailing strategies that go beyond the guest room. Activating purchase touchpoints that include flexible gift cards and other ancillary products can help maximize revenue.
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For many travelers — particularly millennials and Gen Zers — the perfect trip is no longer just about checking into a hotel, shopping for souvenirs, and working through a checklist of popular tourist attractions. Driven by convenience, added value, and a desire to interact with the world in new ways, today’s travelers prefer spending money on unique experiences over material items.
According to a recent survey from The Moodie Davitt Report, most millennials and Gen Zs consider experiences as the highlight of their journey, with 63 percent booking their experiences prior to their trip.
In addition, consumers accustomed to receiving tailored recommendations from popular brands like Amazon and Netflix also expect increasingly personalized experiences. According to Google Consumer Insights, shoppers are 40 percent more likely to spend more than planned when they identify the shopping experience to be highly personalized.
“Meeting the evolving demands of a modern traveler is both a major challenge and an opportunity to gain a competitive advantage,” said Mykola Sheludko, vice president of product management at Sabre Hospitality. “
Looking for convenience and added value, leisure travelers are more interested in unique trips and personalized experiences. When we make decisions about our personal spend, an advanced level of personalization becomes the new norm. Rising remote business travel also drives interest in ancillary offers, such as amenities, meeting spaces, and business services.”
Hoteliers can capitalize on these growing expectations and maximize revenue by surfacing gift cards, ancillary products, and other non-room offers to guests at relevant points of sale along the travel journey.
Meeting the Needs of Today’s Travelers
“The ability to deliver personalized offers and experiences has become a key differentiating factor in hospitality,” Sheludko said. “The challenge is that travel brands are pushed to meet the expectations set by non-travel brands who are further along in leveraging the available e-commerce technology.”
For hoteliers, providing personalized offers and experiences means enabling unique choices before, during, and after the stay — as well as fulfilling those requests quickly and seamlessly. Fortunately, retailing technology for hotels has evolved considerably over the past few years, allowing hoteliers to create holistic strategies covering various types of offers, guest touchpoints, and distribution channels.
“Beyond having the right technology, building a successful retailing strategy requires a profound mindset shift that prioritizes how the hotel can maximize its participation in the total trip-related spend,” Sheludko said. “Instead of focusing solely on rates and occupancy, which have limited topline improvements, hotels must consider what enhancements beyond the room would be in high demand, when and how those enhancements should be offered, and how to drive the total revenue over time.”
Exploring the Benefits of Gift Cards and Experience Vouchers for Consumers
One of the easiest ways to deliver personalized offers and experiences is by enabling choice — and one of the most effective ways to enable choice is by providing gift cards and experience vouchers.
To that end, Sabre Hospitality recently acquired e-commerce and gift card provider Techsembly, which powers some of the world’s leading hotel groups in uplifting their revenue through the sale of gift cards and ancillary products.
Guests can purchase a gift card online or on property and get it delivered digitally or physically, with the flexibility to pick the monetary value that later can be used for virtually anything, including stays, dining, afternoon high tea, spa treatments, meeting spaces, and other experiences. By contrast, an experience voucher offers guests the opportunity to be more personal and gift a specific experience they want a loved one to enjoy.
“We all are delighted by great memorable experiences when we travel,” Sheludko said. “A gift card or experience voucher is an exciting and thoughtful way to share these experiences. The technology we have now makes it easier and more convenient than ever before.”
Driving Total Revenue Through Gift Cards
The global gift card market is expected to reach $750 billion by 2026, presenting a growth opportunity for hoteliers who offer gift cards and experiences to their guests.
“Gift cards and experience vouchers help hoteliers drive new incremental revenue streams beyond the room, but also foster guest loyalty and encourage repeat visits,” said Amy Read, vice president of strategy at Sabre and co-founder of Techsembly. “Hotel room inventory is limited, but gift cards offer the possibility for year-round spending across all departments. One client who had never sold digital gift cards previously, the Capella Hotel Group, made over $1 million in incremental sales in under a year since implementing our solution.”
Easy to set up and support operationally, a gift card solution can open up new opportunities to drive additional revenue, brand differentiation, and loyalty.
“Gift cards offer the opportunity for hoteliers to market to guests long after their stay, turning satisfied guests into brand ambassadors,” Read said. “For example, after a guest checks out, a hotel can prompt a feedback survey and suggest purchasing a gift card to share their experiences with loved ones, extending the brand’s reach and capturing new audiences.”
What’s more, industry statistics show1 that 75 percent of customers tend to overspend their gifted amount by $38, showcasing the potential for higher revenue.
Total Revenue Beyond the Room
Implementing a gift card solution is a relatively simple entry point for hotels to enhance their revenue streams, but Sheludko recommends building broader retailing capabilities that include ancillary offers sold with the room such as policies and stay enhancements, ancillary offers sold without a room such as amenity passes, as well as offers from third parties, all of which can help unlock the maximum value of retailing for hotels and their guests.
“Building a retailing muscle will require some practice,” Sheludko said. “Starting with a few high-velocity ancillary offers can generate a meaningful revenue stream while limiting the operational implications, and early successes can lead to a clear business case for allocating more capacity to managing retailing offers. It’s a journey for every hotelier — what’s important is to make the first step, and to do it with a strong technology partner.”
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