The knowledge I gained on the job was instrumental for my next professional step when I joined TSA, now FPG, as an ancillary revenue consultant. How do you describe the value of revenue management? I believe there is still a certain misconception about the importance of revenue management. For many people, revenue management is about updating rates and having a healthy channel mix. However, there is much more to the subject. be at the same level of hierarchy as the director of sales. The role should be understood as director of profitability, as it touches on sales, marketing, finance, etc. Let me explain. In many hotels, the sales team is “only” in charge of bringing business to the hotel, no matter the cost.
Then you have finance whose sole task is to
keep expenses to the minimum. However, the current revenue manager is in charge of optimizing the profitability of the property. This focus on the property’s profit obviously includes selling as much as possible at the lowest possible cost. However, on top of that, the role also involves maximizing income by creating and improving new sources of revenue. This is ancillary revenue. There are some companies that already have a CRO, chief revenue officer, and that is the way forward. Congratulations on the launch of your first book, Mastering Hospitality Ancillary Revenue.
What inspired you to write the book
And how long was the process from idea to publication? I’ve been very lucky to work first-hand with great hospitality leaders during all of these years of global training and consulting. I’ve created and optimized endless ways to generate more revenue for their businesses as I worked alongside them. I was attending an event in Amsterdam in early 2024. During the event, a few of my colleagues over many different conversations, told hong kong email list me “I can not think of any book focused on ancillary revenue. Pablo, you know a lot about it, why don’t you write that book?”. The fact that the same comment was made several times on the same day by different people made me wonder if that would make sense and add value to the industry. So I researched online, and I realized that, when it comes to hotels and hospitality, there is barely any literature about the topic.
There are some great guides focusing
However, it was surprising to see that not much has been written about ancillary for hotels. That disparity demonstrates a difference that exists to this day between airlines and hotels when it comes to developing those income streams. That’s why I thought it made sense to try to add value to the industry and write a book on how to master ancillary revenue. All in all, from planning to publication, it’s taken me six months to complete my book. Part of this was simply structuring it. For example, by asking top industry professionals to contribute. I was very lucky to have everyone jump on board. Then there was the process of shaping the book into its final form. In the end, it grew into 10 chapters, 216 pages, and over 100 examples of best practices and tools found around the world.
The concept of ancillary revenue is growing in hospitality
How would you define it, and why do you think it’s become so essential for the industry? There’s a theory that states “ancillary revenue is all revenue that is not generated by your core business”. Take aviation as an example. The core business in aviation is carrying people from one place to another. One source of ancillary revenue, one of many, could be the in-flight duty-free. In a Hotel, if the core business is selling how to network and partner efficiently? rooms, everything else would be ancillary. Some could argue feeding those guests is also a core business – the subject is open to debate. Now, if we understand a hotel as a place where people go to sleep, then we’re only focusing on the core business. In this case, we’re missing out on much of the ancillary. However, what if we see a hotel as a place where people go to enjoy a full experience, have a great time, gather with friends, escape, enjoy a great meal, celebrate, and also sleep?
Here I’m quoting Pere Estela Global Ancillary
Director at Iberostar Group and one of the book contributors. If we operate under that definition then the doors are fully open to endless tg data possibilities to generate new streams of revenue. Room rates are growing at a fast pace. On top of that growth rate, they are already stretched in certain locations. That means that the traveler’s budget to spend on sleeping might have hit its maximum. However, when it comes to extras, there are still a lot of untapped streams that we can work on and optimize, to improve the visitor’s experience.
