What hotel operators can learn from Taylor Swift

Leisure travellers tend to spend more on local activities and events during their trips than they do on accommodation. Furthermore, the bleisure trend means that business travellers are increasingly interested in leisure pursuits and trip extensions.

There are ways that hotels can capitalise on the total spend of their guests even when that spend is outside the property. Hotels can earn commission from selling third-party activities and take a more active role in shaping their guests’ itinerary.

IHG Hotels & Resorts collaborates with iSeatz, a provider of digital commerce and loyalty solutions, and Viator, an aggregator of 300,000 travel activities and experiences. From the IHG website customers can discover local activities, tours and attractions near their hotel or their home and earn loyalty points when they book directly.

A search for things to do in London brings up 292 options. Top of the list are day trips to Stonehenge, Bath, Windsor Castle, and Warner Bros. Studio.  Hotels selling activities in this way earn on average 10 per cent commission. The attraction is obvious. Once set up, the hotel group is getting passive income.

So, hotels are well-positioned to financially benefit from the activities and tours market. Accommodation is often the first thing travellers book when planning a trip and independent hoteliers usually have far more local knowledge and expertise than an algorithm, but the booking process needs to be carefully designed so as not to confuse or over-burden the user.

High-end activities

In the luxury segment, exclusivity pays, and the concierge is still king. Tickets to sold-out sporting events? Private museum tours? Out comes the little black book and a few calls later miracles are made. The world’s wealthiest guests expect this level of service and almost everything is possible … at a price.

But even here, technology plays an important parallel role. Alliants, a provider of guest experience software, works with luxury hotels who like to curate the activities they put in front of their target markets. Guests have the option of making booking requests themselves before arrival which show up in their real-time digital itinerary.  For restaurants using the SevenRooms API, direct bookings lighten the hotel’s workload.

James O’Keeffe, former GM of the Wellesley Knightsbridge and now a hospitality consultant at Alliants, said: “It can take a long time for a concierge to get to know a guest individually but with technology we can begin to personalise recommendations based on what we know about the guests from their digital footprint.”

“Luxury is about removing friction wherever possible. We’re not trying to remove the personal touch. Obviously, some of the magic that concierges deliver is impossible to replicate. We’re just elevating what is there digitally so that the level of digital service is of the same luxury standard as the in-person experience.”

The Taylor Swift effect

The impact of Taylor Swift’s world tour has focused minds on the symbiotic relationship between hotel revenues and the wider event economy. The singer’s fans added $208 million to US hotel coffers last year, a conservative estimate that only covers rooms revenue. 

As the tour continues to the UK and Europe this summer, hotel executives are already talking publicly about its positive impact. Dominic Paul, CEO of Whitbread, told an earnings call that its Premier Inn hotels sold out almost immediately when Taylor Swift’s 17 UK and Ireland tour dates were first announced.

A Taylor Swift concert is the kind of event booked months, even years, in advance, but often short booking windows and poor planning mean travellers miss out on opportunities. How many business trips have you taken only to learn you missed an interesting event on the night you caught the plane home?

Events front and centre

Some hotel groups are acting to remedy this. Margaritaville Hotels & Resorts, for instance, puts a calendar of events directly in front of the customer at the booking stage. This capability is powered by two tech firms: the marketing platform Flip.to and the events API OccasionGenius, who say use of their platforms results in double-digit conversion increases.

Nate Marcus, CEO and founder of OccasionGenius, commented: “There’s a big difference between activities and events. For hotels, activities are very much ancillary revenue whereas what we’ve built is a way for people to extend their stays, which has a bigger financial impact for a hotel. Instead of earning X percent of a $60 ticket, they could earn a whole extra night, plus F&B and any additional spend. Events drive trip extensions and decrease cancellation rates.”

OccasionGenius starts by aggregating a data set for the hotel or hotel group that can include free events (Mardi Gras, food festivals), offline ticketed events (state fairs, Irish festivals) and online ticketed events (Ticketmaster, Eventbrite, and a host of smaller players). Integration takes between one and five days. The price varies from $150-$350 per month depending on the size of the data set and its timeframe: the next 30 days or up to 12 months out. Hotels only pay per market, so if a group has several hotels in the same city, the cost is shared.

“It’s just encouraging people to know about the great things that are happening. It helps the hotel be more genuine, authentic, and helpful but not in a salesy way,” said Marcus.

How does Occasion Genius compare to the better-known aggregators like Klook, Viator, and GetYourGuide? “They are activity aggregators, and we are an event aggregator,” explained Marcus. “When you look at our data set and theirs, there’s almost zero overlap. We saw how much money is being made in that sector and their billion-dollar valuations and we think the next space to really innovate and push the envelope will be events.”

Those lucky hoteliers on Taylor Swift’s tour schedule will no doubt agree.