How Hotels Make You Money

Hotel Marketing Mix

In order to capture huge revenue in running hotel business, many entrepreneurs and business owners have submerged to the idea of reinforcing their ROI through acquisition of other businesses to their hotel operation. Nowadays, hotels are not just limited in providing the typical BNB (bread and breakfast) experience to their guests, rather, they’ve also incorporated other businesses (such as offering related service like entertainment and gambling) to leverage their sales and marketing effort. Most of the revenue is not just solely generated through accommodation, but also through selling services to the customers.

Hotel mixed with business are typically infused with facilities and other amenities to develop better promotional strategy among clients, such as adding spa, bars, shops, boutique, travel desk and banquet halls to their establishment. This amenity doesn’t only provide added revenue for business owners, but it also offer customers with an easy access to specific service or facility just within the hotel. In most cases, full-service hotel contain upscale facilities that are comprised with large volume of on-site amenities such as health club, ballrooms, shops, travel decks and on-site conference facilities—in which sizes, room types and rates can vary when owned and operated by a chain.

More than accommodation services, most revenues are generated through the help of this marketing mix for hotels. Some of the marketing approach involves services that assist guests or customers for their recreation, travel, purchasing and others. The consumer-orientation to these concept results to greater demand on the hotel’s offered product and services, whilst, provide greater satisfaction among customers. In order to be successful in such kind of marketing approach, hotel must possess all the required attributes that are significant to the target market but in adequate level, and at the price in which consumers are willing to pay. The products and services must also be accessible to all the consumers, in such a way that will give them a practical advantage compared to other hotels which also offers the same service.

Revenue Contributors

Place and Distribution

The place and the location of the hotel (ex. outskirt of the city, hill station, resort areas) is just one of the indicators that determine the success of the offered service. The ultimate aim of the ‘distribution’ strategy can be specified as making the product/service available to consumers when, where or how they prefer them—which refer to the ‘accessibility’ of the product to the customers.

Cost Element

Defining the right pricing strategy is a significant part of hotel marketing mix. Hotel services and products, such as cost of beverages, live entertainment, cost or beverage, operating equipment, etc, are strongly influenced by the packages and pricing. This has huge implication in the profitability of the operation. These costs can also become very high owing to loses and breakages due to the change in the hotel concept, increase in offered packages or so forth. Hence, it is important to strategize the sales value of offered service to better attract customers and increase business’s ROI.

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