With a background in revenue management, JM is always looking at ways to optimize pricing. What he didn’t expect was for software to enable entire new revenue streams with little extra work.
JM, a seasoned hospitality expert specialized in revenue management and optimization, faced a challenge with Otium Rentals. Otium’s income was entirely reliant on nightly rates. As JM puts it, “Raising rates only gets you so far since the bulk of the added revenue goes back to the property owners. If we wanted to become more profitable, we needed to offer upsells to guests without increasing our staffing count or investing in new amenities.”
JM discovered Hostfully, a platform offering digital guidebooks, which he first started using to enhance the guest experience. However, what truly caught his attention was the Marketplace feature, enabling hosts and property managers to offer upsells to guests. With the potential to create a new income stream, JM decided to build an upsell platform through Hostfully’s Marketplace feature.
After implementing Hostfully’s digital guidebooks for local recommendations, JM capitalized on the Marketplace feature. His first successful upsell involved offering guests the option of early check-in or late check-out, initially priced at $15 each (but now set at $39). JM noted that guests frequently requested these services, and providing them had no operational impact. As JM put it, “why not turn that into an upsell opportunity?” Guests were more than willing to pay for the upgrade and “the extra income basically paid for our Hostfully subscription” JM adds.
Encouraged by this success, JM expanded the upsell options to include a pack and play crib, extra toiletries, additional towels, an air mattress, and a pet cleaning fee. What made these upsells even more appealing to JM was that they were sold passively, requiring little effort on the part of the staff.
Hostfully’s partnership with Viator presented yet another lucrative income stream for JM and Otium Rentals. By leveraging this partnership, JM was able to earn 8% of whatever a guest booked on Viator based on his recommendations. Researching local tours and activities in the area, ensuring their trustworthiness and reputation, and featuring them in his guidebook proved to be a simple yet fruitful endeavor. Whenever a guest clicked on these recommendations and booked through Viator, JM earned 8% of the total amount spent by the guest on the booking. This seamless integration of local recommendations not only enhanced the guest experience but also contributed significantly to the company’s revenue.
The most significant advantage of these new revenue streams is their independence from the property management side of the business. In simple terms, Otium Rentals retains 100% of the income generated without having to share it with property owners. JM estimates that these two new revenue streams have increased Otium Rentals’ net bottom-line by at least 15%.
Upsells and Viator referrals represent the beginning of JM and Otium Rentals’ new income ventures. The abundance of unique Puerto Rican experiences, such as an in-home chef crafting local cuisine, remains unavailable within Viator’s offerings. However, an established local like JM knows area chefs which could offer this service. To further boost the guest experience through immersion, JM plans to also use the Hostfully Marketplace in the near future.
JM envisions a seamless setup, wherein Otium Rentals will handle the payment collection for these experiences, subsequently coordinating bookings and remuneration with the vetted local operators. This move will unlock new experiences for guests, enhancing their satisfaction and setting Otium Rentals apart in the competitive hospitality landscape.
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