Increasing spend and loyalty to drive revenue in your hospitality venue

Driving revenue in the hospitality industry requires a combined effort between operations and marketing. Read on to explore three commercial levers to help grow your top line sales.

Establish your positioning to drive footfall

Ahead of the summer, new sources of footfall will be high on your priority list. The type of hotel, or restaurant, you operate will make a considerable difference to who you target so the first task is to establish your positioning – are you a value, boutique, luxury, independent or chain hospitality venue?

For example, a guest seeking value wants to get the best out of their trip and they often rely on review sites to help them find what they need – and whether it’s included in the room rate for example. Whereas luxury seeking guests are more focused on pleasure and willing to spend more money to achieve that goal. Luxury seeking guests can often be couples and tend to look deeper at the detail while browsing review sites to ensure the hotel has the amenities and facilities they seek.

Hotels with restaurants can expand their reach to non-hotel guests during peak times to increase lobby footfall. Offer a full breakfast, lunch and dinner service while curating daily menu specials and dietary options. While your guests dine at the restaurant, cross-sell your hotel offerings on your menus and via tabletop marketing collateral, while ensuring waiting staff are briefed to provide further information if needed.

Review your current signage and branding. The easiest way to do this is to ask your guests if you were easy to find, this can be done during check-in or check-out. Ensure your hotel has bold branding, accessible signage from main roads, or floor graphics if your entrance is within a larger building.

Consider offering your restaurant or bar as a hub for local networking events on quieter evenings. This will not only produce footfall but a new revenue stream with incremental sales as the event builds weekly or monthly.

The importance of first-time guests can’t be underestimated. Give those guests an experience to remember and incentivise them to return to maximise your opportunity for repeat business.

Increase visit frequency of your guests

For guests that have already visited, give them reasons to make a repeat (or even regularly) visit. This is much more efficient than constantly working to acquire new guests.

Seasoned restaurant operators often refer to the importance of marketing to three visits.

So, what are the stats? Well, industry experts suggest that when a guest visits your restaurant for the first time, and has a flawless experience, they have a 40% chance of coming back. Upon a second successful visit that chance increases slightly to 42%. However, following a third successful visit the chance of the same guest returning for a fourth visit is over 70%.

So how can you achieve this goal of three visits?

By providing your customers with an incentive to return – such as a welcome beverage or complimentary dessert on their next visit – and coupling this with a flawless guest experience – you’re building trust and credibly with your guest that will foster loyalty and advocacy.

Increasing guest spend

Encouraging an increased spend from each guest that stays in your hotel, or dines in your restaurant, can stack up over the course of a year. It is one of the best opportunities available to increase your top line sales.

The classic McDonald’s coined phrases “Would you like fries with that?” and “Is that a large meal?” have been reported as contributing upwards of 25% on their annual revenue.

Below are two examples of increased guest spend in a hotel and restaurant environment.

Raising average spend per transaction (ASPT) – During the pre-stay phase, guest eagerness is high. Take this opportunity to share details of the amenities on offer as well as enticing room upgrade prices and upsell facilities upgrades.

If you have regular availability in superior rooms, offering flash deal room upgrades are a great way to increase your guest spend. For example, if you sold two room upgrades per day at £60++ that would drive an additional £43,800++ on your annual top-line sales.

Many hotels offer arrival packages. For example, if your guest is celebrating a special occasion why not take the opportunity to upsell them a bottle of champagne on arrival. If executed well, pre-stay offers help increase your ASPT while still projecting value-add to the guest.

Raising average spend per head (ASPH) – waiting staff are the first line of communication with your guest. When you have a server with both the training and confidence to recommend items on your menu, your guests will be much more likely to listen to their suggestions and naturally increase their spend per head.

Train your team well so they can suggest sides, signature beverages, and desserts to complement the guest’s dining experience. The effort taken to bring your service staff to this level will pay dividends once you see the rise in ASPH and ultimately, daily revenue.

Consider your menu design – many guests can be intimidated when choosing the correct wine for their entrée. Remove this obstacle by either cross training a server as a sommelier or by adding pairing suggestions on your menu in line with your big-ticket steak and seafood options.

Throughout April and May Purplefish will be sharing thought-leadership hospitality articles carrying themes from employee engagement, marketing, and crisis communications – sign up for our email newsletter to avoid missing out on future content.