What sort of things can I do to make sure I'm generating revenue from every part of my building?
What sort of things can I do to make sure I'm generating revenue from every part of my building? I pay rent on every square foot and feel I should be maximising my sales on that basis
Ian Graham, Hotel Solutions Partnership
Ikea makes you walk through a whole warehouse, familiarising you with its entire range and tempting you to buy more than you came in for. At Heathrow's Terminal One you pass through a veritable shopping mall with tempting offers.
But check into an average hotel and the guest walks unaccompanied through dull corridors, goes upstairs in a lift with mirrors, and into a bland room peppered with stationery that tries to sell the restaurant, room service or the bar.
The lessons of the retail world are surely that hotel guests should be exposed as early as possible to as much as possible of the product and service offering. This can be achieved through design, walking the guest to the room, and selling products and services in the room effectively. You should consider the guest a captive audience for all the sales and marketing messages you can imagine.
Intermediaries (conference organisers, travel agents, travel managers) should be exposed to as much of the product and service as possible as often as possible.
Your staff should be encouraged to experience as many of the products and service as possible so that they, too, can sell the experiences. Your guests should be rewarded for using more and more of your facilities. And as an entrepreneur or as manager of the hotel, you should be buying in retail-selling skills as a core component of your management team.
But - and it's a big but - the focus should not be on increasing revenue per square metre. Rather, it must be on increasing profit per square metre. Don't be a busy fool like the guy next door!
www.hotelsolutionspartnership.com
Ann Elliott, Elliott Independent
Take a good look at your building from outside. See it from every perspective - from the back, from across the road, from each side. Think objectively about what you have. Consider what someone else might do with your property if they had the opportunity. Take photographs.
Take time to look at every inch of your space inside. What exactly do you have? What are you using? What is there still to be used? What could be reorganised to give you more revenue-earning potential?
Check against any plans of the building. You might have space you didn't know you had.
Do you have any rooms or any wasted space which could form the basis of more accommodation? Do you have storage space which could be used to generate revenue? Accommodation can be very profitable, particularly if those who stay also eat and drink.
Think critically about any space you have which could be used for community events, functions or business meetings.
Can you "sweat" your current assets more effectively by trading longer, improving on your current offering, attracting a different target market or remarketing your offer? Do you have a patio or verandah which could be used for dining, where heated large umbrellas can extend the summer season? If not, can you build one?
Your garden should be an obvious space for more revenue, particularly if you can erect a marquee for functions.
Finally, do your neighbours have any space they might let you use? You never know!
David Russell, Russell Partnership
Some might suggest you sell the advertising space available on your lift and washroom walls, franchise out your street-level or your first-floor office space, or create a series of specialist themed promotions, etc…
Well, we've all been there and done that.
I believe it's better advice to concentrate on prime revenue generation, which relies on an obsession with a customer-driven methodology, an understanding of customer needs and a passion for delivery. Revenue optimisation needn't rely on physical promotions but can focus on your people. Your team provides a roving revenue-generating tool with endless power and coverage.
Loyal staff breed loyal customers, and loyal customers generate optimum revenue. But super team players are not created overnight. Make time for their development and mentoring, fund their familiarisation visits, and create a "human stable of superstaff".
Try applying a little science to your revenue generation. Implement a menu-engineering approach to your business. Menu engineering is a marketing-orientated approach to the evaluation of current and future menu pricing, design and content. Rid your business of inflationary pricing and bring in the concept of banking pounds, not percentages.
Investing in your team and the application of a little science will generate greater top-line sales. However, you also need to focus on optimising the use of the space you pay rent for. Don't accept space inefficiency - rationalise storage space.
Inappropriate, outdated equipment in revenue-generating areas has the potential to restrict revenue generation through an inability to merchandise effectively.
Our experts answer your questions
Do you have a business issue you want to put before Caterer‘s panel of experts, drawn from all areas of the hospitality industry? E-mail:
benjamin.walker@rbi.co.uk.
