In-house selling and average spending

Very often, hoteliers ask us how to change the sales results of their ancillary services, such as food services, café, minibar, wellness center..etc.

If applied correctly, Revenue Management leads to a significant increase in the occupancy data and, therefore, the many extra people could easily turn into opportunities to sell ancillary services… It’s statistics.

We have often taken the trouble to analyze these services’ sales performance, so we need to make a preliminary statement: results strictly depend on the skills of those who are in charge of sales.

The ability of a good barman or waiter or of those people who deal with massages and treatments, obviously, can make a huge difference. Therefore, our suggestion is to raise awareness among the staff of sales techniques by means of courses or periodic meetings to check the results or the taken actions in order to extrapolate important information.

The average spending power is a great data that measures the quality of sales processes

If the total turnover of rooms’ ancillary services was for a determined season € 200,000 and guests were 10,000, the Average Spending Power for that year will be 20 euro ( 200,000 : 10,000).

If the following year the application of Revenue Management leads to an occupancy increase to 15,000 and the total turnover of extra services gets to 250,000, even if the latter has increased, the ASP has decreased from 20 to 16.6.

This result tells us that the services in general worked more but not better; therefore, we haven’t reached that improvement that should lead to a better ratio between income and fixed costs (work increase may mean staff increase).

On the contrary, if the staff sales training and the increase of individual clientele rather than groups lead to an increase of the ASP, we can be sure that the higher turnover will also bring excellent profits.

I suggest that all the hotels that decide to apply Revenue Management strategies always calculate their Average Spending Power and the total sales volume of in-house selling, for both the ancillary services altogether and each of them separately, trying to learn from successes and failures what to change, what to strengthen and, possibly, what to discontinue.