Make your hotel more profitable : Strategy #12 – Diversify Your Revenue Stream

The hospitality industry has many components, including lodging, food
service, beverage service, meetings, tourism, entertainment, attractions and
more.

Running a successful, profitable hotel and/or restaurant has parallels with
the stock market : one must diversify to maximize profitability and to
minimize risk.    The risks are even more apparent today considering the current economic climate, which requires thinking about the future as well as the present.

 

Today, you may have a solid brand (local or national), a good location, a base of regular guests and are holding your own in your competitive set comparative numbers. On the other hand, you have been having some staff turnover, your profit margins are not always consistent and there always seems to be a new competitor entering the market.

 

Your business could become stronger, more balanced and able to strengthen market penetration if you carefully examined some options and expanded your offerings with some diversity of service and products.    These could include:

  1. Adding retail space and/or items.  Conrad Hilton set the pace two generations ago and the industry is again about to expand this approach in deeper ways
  2. Making your services more accessible. This is especially true in food services, with major and smaller players experimenting with delis, carry-out for select popular items, etc.
  3. Exploring the potential for appropriate size party catering services.  Hosting special events off-site, IF you can do it well and profitably.
  4. Finding your niche. It could be weddings, showers, corporate team building, etc
  5. If you have a hotel restaurant , assess the periods of volume and see if there are options, such as making your restaurant available for larger functions on slow periods. You could also find a niche in renting the
    entire place for private parties on known slow days or in high demand seasons, like corporate holiday parties.
  6. Assessing your current or potential meeting room space and determine if the need is met in the market. This could bring in group business not currently using your facilities.
  7. Creating profitable partnerships. There are likely several other local businesses that would like to reachyour customer base. Come up with creative ways to give such partners advertising access to yourcustomers…for a fee.

 

There are additional resources devoted to each of the Baker’s Dozen of Strategies to Make Your Hotel More Profitable on HospitalityEducators.com

Dr. John Hogan CHE CHA CMHS
Hotelier, Speaker, Educator, Columnist

* Co-Founder of www.HospitalityEducators.com
A membership information site committed to MAKING YOUR HOTEL MORE PROFITABLE!                                                                                                                       Introductory pricing will close in two weeks, so sign up now

* Principal, www.HoganHospitality.com
Your Hospitality Resource for the Hotel Owner, Innkeeper, Manager and Hospitality Industry Associations.

2011  Keys to Success are results-driven programs  aimed at building competitive advantage. These programs are available as either a keynote address or an interactive workshop. Details are available can be found at both sites.

 

Program # 6

10 Hotel Sales Action Steps to Succeed – Any time, Anywhere

I encourage you to read the previous blog post relating to a worthwhile proposal for qualified sites:     Industry Links – A Valuable Resource

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