For decades, hotel Revenue Management has focused primarily on one thing: the room.
Occupancy. ADR. RevPAR.
We forecast room demand, optimise room rates and carefully decide which business to accept.
But the guest does not only buy a room.
They may eat in the restaurant. Park their car. Book an experience. Pay for an early check-in or late check-out. Use the spa. Hire meeting space. Or purchase something else during their stay.
This is where Total Revenue Management changes the perspective.
Instead of asking:
How much revenue can we generate from this room?
We start asking:
How much value can we create throughout the entire guest journey?
During Global Revenue Forum Amsterdam, Spike Scheepbouwer from Mews explored this shift and how hotels can unlock revenue opportunities far beyond the traditional room booking.
And perhaps the most interesting part is that this is not simply about getting the guest to spend more.
Done well, it can also create a better guest experience.
Total Revenue Management means looking beyond the room and understanding the commercial potential of the entire guest relationship.
In this article, based on insights shared by Mews at Global Revenue Forum Amsterdam, we explore:
Why room revenue only tells part of the story
Where additional revenue opportunities exist throughout the guest journey
Why total guest value matters more than room rate alone
How technology can make additional services easier to discover and purchase
Why Revenue Management increasingly needs to connect with Operations, Marketing and the guest experience
For most hotels, the room remains the largest and most important source of revenue.
So naturally, it has also been the primary focus of Revenue Management.
But look at the hotel through the eyes of the guest.
The guest may interact with the hotel many times before, during and even around the stay.
The Mews session highlighted opportunities including dining, parking, early check-in, late check-out, experiences, activities, meeting space and retail.
Each represents potential revenue.
But each can also represent value for the guest.
A traveller arriving on an early flight might genuinely value guaranteed early access to the room.
A guest with a late departure might happily pay to keep the room longer.
Someone travelling by car needs parking.
A leisure guest might welcome an easy way to book dinner, spa or an experience before arriving.
The commercial opportunity therefore does not necessarily begin with:
What else can we sell?
A better question may be:
What else does this guest need?
Consider two guests staying on the same night.
Guest A pays €250 for the room and spends nothing else at the hotel.
Guest B pays €220 for the room, books dinner, pays for parking and purchases a late check-out.
Which guest is more valuable?
If we only look at ADR, Guest A wins.
If we look at total guest value, the answer may be completely different.
This is one of the fundamental shifts behind Total Revenue Management.
We move from optimising an individual transaction towards understanding the total commercial value of the guest relationship.
And that has consequences for how hotels measure performance.
ADR and occupancy remain important.
RevPAR remains important.
But they cannot tell us everything about the value being created across the property.
The white paper therefore recommends tracking ancillary performance alongside traditional room KPIs and identifying opportunities to increase spend throughout the guest journey.
There is an important distinction here.
Total Revenue Management should not mean bombarding every guest with upsell messages.
Would you like breakfast?
Would you like an upgrade?
Would you like parking?
Would you like dinner?
Would you like late check-out?
Would you like another offer?
That is not necessarily creating value.
It may simply be creating noise.
The guest perspective highlighted in the white paper is more useful: guests are increasingly willing to purchase additional services when those services are relevant, timely and easy to access.
Those three words matter.
Relevant. Timely. Easy.
The right offer to the wrong guest has little value.
The right offer delivered too late may have little value.
And even a relevant offer delivered at the right time may fail if purchasing it is unnecessarily complicated.
Total Revenue Management therefore needs to consider not only what we sell, but also when and how we make it available.
Imagine a guest who wants a late check-out.
If they need to call reception, wait in a queue and ask whether it is possible, there is friction.
If availability is known and the option can be offered at the right moment through a simple digital interaction, the situation changes.
The hotel creates incremental revenue.
The guest gets something they value.
And the operational process may become easier.
This is where technology becomes important.
The Mews session highlighted technology's role in helping hotels identify opportunities, personalise offers and remove friction from the purchasing process.
But technology is the enabler, not the strategy.
Before deciding which system or automation to use, hotels still need to answer:
What do our guests actually value?
Which products and services do we have available?
When are guests most likely to need them?
Can we fulfil them operationally?
And can we make them easy to buy?
Only then does technology help scale the opportunity.
There is another consequence of moving beyond rooms.
Revenue Management cannot do this alone.
A room can often be managed through relatively clear inventory and pricing structures.
The wider guest journey crosses multiple departments.
Restaurant.
Spa.
Meetings and events.
Front Office.
Parking.
Activities.
Marketing.
Digital.
Operations.
Suddenly, Total Revenue Management becomes a much broader commercial question.
If Revenue identifies an opportunity for late check-out but Operations cannot deliver it, there is no product to optimise.
If the restaurant has available capacity but Marketing and Revenue cannot identify which guests might want to dine, an opportunity is lost.
If ancillary products exist but the guest cannot easily discover or purchase them, their revenue potential remains theoretical.
This means hotels need to connect departments around something broader than room revenue:
total guest value.
That is also one of the key recommendations in the white paper for commercial leaders: move from room-centric towards guest-centric thinking and align departments around total guest value.
The idea of Total Revenue Management can quickly become complicated.
Hotels have many products, systems, departments and data sources.
But the starting point can actually be quite simple.
Follow the guest journey.
Before the stay
What could make the upcoming visit easier or better?
Parking? Dinner reservations? Transfers? Experiences? An upgrade?
Arrival
What does the guest need now?
Early check-in? Food and beverage? Luggage services? An activity?
During the stay
What additional experiences or services are relevant?
Restaurant? Spa? Activities? Meeting space?
Departure
Could late check-out add value? Is there another service the guest might need?
Then ask three questions at every stage:
Is it relevant?
Is it easy to buy?
Can we deliver it profitably?
Those questions begin to turn the guest journey into a commercial strategy.
What we measure influences what we optimise.
If the commercial dashboard is dominated by occupancy, ADR and RevPAR, it is hardly surprising that most Revenue Management attention remains focused on rooms.
Moving towards Total Revenue Management means gradually broadening that view.
How much ancillary revenue are we generating?
Which guest segments spend beyond the room?
Which products are most frequently purchased?
When in the guest journey do guests buy them?
Which offers convert?
And importantly:
Which additional revenues are actually profitable?
Not every extra euro of revenue creates the same contribution.
The goal should therefore not simply be to maximise guest spend.
It should be to create profitable additional value in ways that also make sense for the guest.
The white paper presents a simple Total Guest Value Framework:
Stay → Spend → Experience → Satisfaction → Total Revenue.
I like the framework because it prevents Total Revenue Management from becoming purely a conversation about extracting more money from the guest.
Spend is only one part of the journey.
The experience matters.
Satisfaction matters.
And ultimately, commercial value and guest value should support each other.
A late check-out can generate revenue and make the guest's departure easier.
A restaurant reservation can increase F&B revenue and remove the need for the guest to find somewhere else to eat.
An experience can generate ancillary revenue and make the stay more memorable.
The strongest opportunities are often those where the hotel does not need to choose between revenue and experience.
The guest receives something they value, and the hotel captures part of that value commercially.
Total Revenue Management asks hotels to look beyond the room and consider the value created throughout the entire guest journey.
Room revenue remains important.
But so do dining, parking, early check-in, late check-out, experiences, activities, meetings and other services the guest may value.
The opportunity is not simply to sell more.
It is to understand what is relevant to the guest, make it available at the right moment and remove unnecessary friction from the purchase.
That requires technology.
It requires data.
But above all, it requires Revenue Management, Marketing and Operations to look at the same guest through a broader commercial lens.
Perhaps the question for the future is therefore not:
What is this room worth tonight?
But:
What is this guest relationship worth across the entire journey?
This article is based on insights shared by Spike Scheepbouwer, Client Sales at Mews, during Global Revenue Forum Amsterdam.
In the GRF Insights white paper Beyond the Stay: How Hotels Can Unlock Total Revenue Opportunities, we explore how hotels can move beyond room-centric Revenue Management, identify ancillary opportunities and use technology to make additional services more relevant and easier for guests to purchase.
Download the White Paper and explore how Total Revenue Management can unlock value beyond the room.
[DOWNLOAD WHITE PAPER]
