Following the introduction to the management of the hospitality and food service sector in the previous article, today we’ll address a topic that’s very important for hotels: increasing revenue in the hospitality and food service sector. Just as we’ve heard from other hotel service providers, revenue from this sector contributes to the TRevPar (total revenue per available room), particularly for businesses that devote special attention to this area.
Revenue from the Food and Beverage Department: Principles
There are many different techniques for applying the strategies of cross-selling, up-selling, and down-selling—which we’ll come back tolater—that can help us increase sales in the hospitality and food service industry. But, as always, it’s important to start with the basics. Any business that uses these strategies as part of revenue managementculture should start with the following:
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Training: Proficiency in our customers’ languages; in-depth knowledge of offerings in the hospitality and food service sectors, hotel and resort facilities, etc.
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Motivation and encouragement.
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Involve the entire hotel team; don’t limit yourself to just the Food & Beverage staff.
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The best possible support materials: We should handle our materials with great care—such as the beverage menu, the food menu, and information displayed on digital media (for example, the screens in high-traffic areas of your facilities)—as these play a very important role.
The salesperson’s motivation, training, and skill are of the utmost importance, since the customer’s needs often do not yet truly exist and must first be created. In this regard, it is advantageous if the techniques we have chosen are applied successfully. However, none of the above helps us at all if we do not first properly assess our guest, get to know them, and thereby identify their needs and preferences.
What do ” up-selling ” and ” cross-selling” mean?
Let’s return to some techniques that can help us increase revenue in our hotel’s food and beverage department. I suggest we focus on two: up-selling and cross-selling. Up-selling and cross-selling are essentially techniques for increasing revenue in which a customer is encouraged to purchase a higher-quality product or a more premium service than the one(s) they have already purchased.
It is important to emphasize that the following minimum requirements must be met for the strategy to be successful:
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Find the product or service that best suits our customer—in other words, the one that’s best for their profile.
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It’s important to offer the customer the product or service at the right time.
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The location has to be right.
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And, of course, the price has to be fair.
What benefits do these techniques offer us?
Aside from our goal of increasing revenue in the hospitality and food service sector, the proper implementation of these strategies—as part of a revenue management culture in any lodging establishment—ensures that customers, the company, and employees all reap tangible and intangible benefits:
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Customer: Once we have identified customer needs, expectations, and preferences, we are able to offer personalized service and, as a result, higher quality.
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Company: There are many advantages here: For example, costs can be optimized as revenue increases, since the fixed costs of products or services are spread across more customers, thereby increasing operating income.
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Employees: In my experience, an employee is much happier with their job when their customers are happy. In addition, incentive programs (not to be confused with motivation) help ensure that earnings from work performed also increase.
When these techniques are applied correctly, not only does TrevPAR improve, but it also has a positive impact on our quality index. Therefore, the revenue management strategy should always be implemented with a long-term perspective, consistently measured against our customers’ satisfaction. This approach will quickly help you build a base of loyal customers for your hotel or resort.
Before I conclude, I must emphasize once again: team members must be motivated and trained, see themselves as part of the whole, and be inspired, since their work is crucial to achieving the goal of increasing revenue in the hospitality and food service sector. Let’s not forget that the best way to sell is always through personal contact: people talking to other people.
On behalf of IHCS Hotel Consulting , we invite you through this article to not hesitate when it comes to getting to know your customers and training your employees. See for yourself that even though it may be difficult at first to master revenue management strategies, you’ll find that the benefits are numerous and well worth the effort.
We hope you found this article interesting; if so, please share it with others and send us your comments, opinions, and suggestions. We’d like to conclude with the following quote from Napoleon Bonaparte:
Victory isn’t always about winning; it’s about never giving up.
Thank you very much, and see you soon!
