Hoteliers are constantly looking for ways to increase hotel guest spending (and therefore, revenue) without decreasing overall customer service and as a former hotelier, I know that this slippery slope that can have negative effects if not executed properly.

Full Service hotels in particular are sometimes known for using a “nickel and dime” approach that consists of cashing in on expensive parking, $4 waters and $16 oatmeal from room service. While these are definite revenue drivers for hoteliers, the volume of these transactions isn’t as high as it could be.

And, hotel guests see this approach for what it is: Hotels are over charging guests for convenience. There has to be a better way to increase spend per guest without potentially sacrificing reputation and guest satisfaction.

Virgin Hotels, for example, has decided to move away from the “nickel and dime” approach. This major independent brand is changing the way guests look at the mini bar by charging “convenience store pricing” in order to increase overall volume, which will make up for the decrease in price.

Over the course of the stay lifecycle, there are seven stages in which hoteliers can drive revenue:

Research, Booking, Pre-Stay, Arrival, On-Property, Check-Out, and Post-Stay. Focusing on Pre-Stay, Arrival and On-Property is important as they are important opportunities to increase hotel guest spending.

During the Pre-Stay period, an incoming guest already has a reservation booked. The information available at this time should include stay dates, number of guests, and some other important aspects of the guest’s stay. If Guest A has booked a basic city view room but the hotel knows this individual is traveling with a family and is a frequent stay guest, there are opportunities to increase this guest spend.

Room upgrades are one no-brainer way to increase spend per guest. Common hotel selling strategies include overselling on the basic room types in order to push upgrades upon arrival with or without extra charges. Try this with an email campaign: Offer the $400 Suite for $60 on top of what the guest is already spending, instead of offering the upgrade for free. It’s an easy opportunity to increase revenue, while still offering the guest a value add for their money..

Amenity upgrades are also a very popular way to increase guest stay without much effort or overhead. Many hotels call these packages and sell them on top of booking reservations, like they do with room upgrades. The idea is to target a specific demographic of guest and sell them on the idea of item X in their room. For example, if hotel guest is celebrating a special occasion, the idea of Chocolate Strawberries and Champagne waiting for them in the room is very appealing. Alternatively, if you’re a business traveler, checking in to discover a gift basket of local micro brews and treats is enticing.

Another way to increase guest spend is to make it more readily available via technology. Mobile check-in, mobile hotel applications, text concierge services and on-demand television/in-room entertainment are great ways to increase the average guest spend.

Studies like the 2014 Smith Micro Hospitality Survey provide supporting evidence of the demand for these services: 83% of survey respondents want hotel service promotions (such as restaurant, bar and spa) on their mobile devices. Easy access to these promotions allow for more opportunities to educate guests on offerings and allow them opportunities to spend.

Understanding the importance of upgrades on the operation bottom line is imperative.

For example, say your hotel offers upgrades to bigger rooms. If your mobile application or front desk agent was able to get three $50 upgrades per day then the hotel would add nearly $57,000 a year in extra revenue. Depending on the size of the hotel, three upgrades could be a low estimate. But, even three upgrades at $25 will add $27,000 annually to the operation.

Increasing guest spend to drive revenues in an increasing popular conversation at the executive management level. In a world driven by online reputation and the increasing ability for anyone to publicly give their opinions, hotels have to be very careful in how they approach revenue drivers.

The wrong approach can leave your guests with a negative impression of your hotel. The right approach can enhance the guest experience and increase satisfaction.

James Kaikis, Client Solutions Manager: www.revinate.com