Ryanair has recently announced its intention to give some tickets for free during the next five years. So in which way this renowned low-cost airline is going to increase its earnings? The CEO of the Irish company has stated that selling extra services at the airport will allow to balance out the “loss” deriving from the free tickets.
This strategy, which is actually not new in the airline field, corresponds to what is defined in marketing as Ancillary Revenue, that is to say the extra profitability generated by the sale of additional goods and services, such as in the case of the flights, such as the possibility to rent a car that is already included in the ticket price.
The main purpose of Ancillary Revenues is to maximize revenue but, at the same time, there is the assumption that offering customers a broader range of services, they will eventually be more satisfied. In this way, they are able to benefit from an extra service at a lower price compared to the ordinary one purchased separately.
In recent times, the hospitality field has also realized that, through the sale of additional services, earnings will be quickly and easily increasing. Notwithstanding this, not all the hotels are able to turn Ancillary Revenues into a real business tool.
How many of you really know how to take advantage of the packages, in other words, the ability to offer customers, during their reservation process, in addition to overnight stays, a range of extra services aimed at improving their stay?
Many think the concept of “package” is in contrast with the modern traveler, who tend to choose the details of the vacation on his/her own. However, travelers wish to live a unique experience but at the same time, they also would minimize problems and worries! So those hotels, that are able to offer additional and customized services, manage to earn more and they have more happy and satisfied customers.
Any hotel manager should therefore be able to offer ‘stay + extra’ packages (including not only services but also “things to do”), by listening to the guests’ requests . How? You might submit, at the end of their stay, a survey that is conceived to understand which services your users most appreciate in addition to the ordinary ones. In addition, you could monitor your fanpage, or review websites, in order to understand what your guests like and what they really need.
Hence you might find out that some of your guests are much more interested in a transfer service than in the parking lot, as most of them do not use their own car -as in the case of business clients. Furthermore, if you notice that many Facebook users ask information about excursions and organized tours, why not include this type of services at a more affordable price?
So now let’s look at how to find out which additional services are mostly appreciated by your customers and how to properly sell them in your packages or offers.
1 How to find the additional services that engage your customers
According to some studies, hotels can get a 25% increase in income by investing in Ancillary Revenues. This should already be enough to make you understand the relevance of additional services, even for the accommodation facilities.
However, as we have said above, offering packages to maximize revenue turns out to be a winning strategy according to which the first thing to do is the identification of the right target segment.
Undoubtedly, not all of your potential customers will be attracted by this kind of offers. It is therefore unnecessary to make packages for a target that is poorly prepared to this type of initiatives because the price could be unattractive or they are just not interested in additional services!
Once the target is well-positioned, you will also need to identify the additional services you need to offer and you need to consider that the number of users to whom you are targeting your package is limited. All you have to do is, in fact, including as an extra just those services that may affect a specific customer segment.
Alternatively, if you dispose of a booking engine that allows your guests to include their extras by themselves, so that it creates dynamic and personalized packages, remember to always specify the costs, dividing them by range of age and time. Above all, remember also to point out how to join and the cancellation conditions. For instance, if you are offering a spa treatment or a gym session as an additional service, remember to specify the time when you can benefit from it, if cancellation is possible and other useful information to avoid misunderstandings that could threats a positive user experience.
Anyway, bear in mind that nowadays customizing offers is one of the major attractions for consumers, especially in the travel industry. This not only encourages sales, but it also increases the degree of satisfaction and, in many cases, the customer loyalty.
2 How to sell additional services
It is well-known that who works in this industry is completely aware of the fact that the sale of additional services can increase both their revenues and the customer satisfaction, at least those belonging to a specific target segment.
However, once you have completed your extra package, what’s the most favorable way to promote it? Do not forget it: the fundamental step is trying to best allocate your product!
The main way to achieve your sales goal is making visible offers on multiple channels such as:
- Firstly on the website, you’d rather create a specific section called “offers” and, in any case, even in the homepage; through the booking engine;
- By sending e-mails and newsletters to registered users or by creating email marketing campaigns;
- On social profiles and fanpages;
- Through promotional campaigns on Facebook, other social media or Google Adwords.
Remember that you also need to reach your usual customers or loyal guests, with whom you certainly have more chances of success, as packages, if they are created in the right way, are based on he analysis of their tastes and their preferences.
In this case, cross selling, that is to say the sale of additional services, can also be done through the submission of truly customized offers, tailored to suit those customers, on the basis of the real choices made by the same users on previous occasions.