Leveraging guest-centric metrics bolsters guest satisfaction and the bottom line
By Tony Marshall, VP & Managing Director, APAC
Hotels traditionally have measured financial success through fixed, space-based metrics such as occupancy rates, average daily rates (ADR), and revenue per available room (RevPAR). While these metrics remain relevant to provide a baseline snapshot of financial performance, they fall short in capturing the full potential of guest-centric strategies and revenue opportunities within the property.
Today’s leading hoteliers are adding a more comprehensive analytics metric into their performance assessments: Revenue Per Available Guest (RevPAG). Going beyond the limitations of RevPAR and ADR, RevPAG measures how effectively hoteliers generate additional property-wide revenue streams by using real-time data-driven insights to present personalised offers and experiences guests are apt to accept. This data-driven approach not only enhances guest satisfaction but also boosts profitability by fostering loyalty and maximising spending.
The timing couldn’t be better for hoteliers to embrace new strategies as 65% of APAC regions have reached pre-pandemic tourism levels in early 2023. Adding a performance metric that uses technology to uncover hidden revenue streams and identify upselling opportunities guests will perceive as personalised service rather intrusive selling is a smart business practice.
Hong Kong’s “Let’s Go the Extra Mile” campaign by the Tourism Board exemplifies this forward-thinking approach. Addressing recent visitor feedback on service and technology issues, the initiative encourages memorable human interactions alongside efficient technology integration. While friendly service is pivotal, sustainable guest impressions hinge on seamless technology integration that enhances both experiences and operational efficiency.
Additionally, recent studies underscore the impact of personalised touches in hospitality, with a significant majority of travellers favouring tailored experiences and appreciating thoughtful gestures. Technology emerges as a critical enabler here, supporting frontline staff in delivering exceptional service that resonates with guests and encourages repeat visits.
As hotels navigate this transformative period, those adept at leveraging data insights and integrating technology effectively stand poised to redefine guest satisfaction while also securing financial performance superior to their peers.
Embracing RevPAG for holistic insights
While ADR has long been a fundamental measure of a hotel’s financial health, the growing complexity of the hospitality industry and today’s emphasis on guest-centric strategies requires a more comprehensive data-driven approach to expanding revenue through a personalised understanding of each guest.
Rather than limiting analysis to filling physical spaces or optimising room revenue, modern perspectives on financial performance consider potential income from dining, wellness facilities, onsite amenities, event spaces, and other guest experiences.
The hospitality industry will benefit as more leaders adopt more comprehensive, data-driven metrics such as RevPAG. When properties use data to offer experiences refined to each guest’s preferences, unique services and specialised moments improve property wide. Understanding guests more comprehensively and personally will feed innovation across the full spectrum of guest spending including food and beverage experiences, spa treatments, conference center offerings, parking options and room upgrades.
In addition, hotels will have a more holistic view of their performance vis a vis potential revenue streams as well as data that helps them improve operational efficiency by honing their offerings more precisely.
The power of personalisation
In the past, hotels relied on educated guesses regarding guests’ interests, turning upselling into a practice potentially intrusive rather than service oriented. Today, understanding that a guest has reserved a room for a special anniversary, the hotel can suggest personalised experiences such as an in-room couples massage, flowers and champagne upon arrival, or a special dining package featuring a romantic candle-lit dinner. This focused approach boosts revenue throughout the hotel and delivers a more memorable, personalised experience for the guest – indeed, 65% of consumers say personalisation is a key loyalty driver.
The advantages of employing data-driven analytics extend beyond targeted upselling. Access to real-time data enables hotels to instantly verify guests’ ages before serving alcohol, ensuring compliance with legal requirements. Furthermore, data can reveal a guest’s past stay history, enabling hotels to customise service and cater to known preferences. For example, if a guest typically indulges in a specific dessert or beverage from the minibar, the hotel can ensure these items are stocked in the room before check-in. This customisation elevates the guest experience and fosters stronger customer relationships while also opening up additional opportunities for revenue generation.
Harnessing data for a new era in hospitality
Hotels are realising the importance of understanding their guests from the booking process through checkout. Hotels need to connect their technology systems to paint a full picture of guest preferences and the opportunities they hold for monetisation. These systems form the central nervous system of the hotel, linking everything from the booking platform to the mobile app and on-site kiosks – unifying guest data throughout the hotel. By prioritising personalised experiences and targeted offerings, hotels can enhance guest satisfaction and encourage repeat visits, thereby increasing the overall revenue generated from each guest.
When everything is connected, hotels can gain a complete overview of each guest’s needs and wants from every aspect of their stay. Being data-driven isn’t just about supporting higher occupancy and increasing room rates; it’s also about unlocking new revenue streams by creating personalised experiences for guests to keep them coming back.
