Understanding guest demand for extra-services
For years, all-inclusive holidays were the mainstay of global travellers. The convenience and simplicity of having every element of your vacation pre-set - from travel and accommodation, meals and beyond - saw package breaks soar in popularity and segment pioneers pave the way for many of today’s established tour operators.
But then budget travel arrived, and suddenly holiday planning was democratised. Travellers saw the benefit of booking elements individually, lured by enticing discounts and freedom of choice. The package fell out of favour, with DIY holiday’s taking the market share, as reported by ABTA in 2003. The airline industry pioneered the concept of ‘unbundling’, the separation of ancillary fees and soon hotels followed suit, allowing customers to only pay for the products and services they really wanted - leading to the rise of the likes of select-service hotels. This also helped accommodation providers create experiences for every guest, rather than set packages that were a one-size fits-all.
In the years since, the trend has fluctuated but what remains clear is the desire for convenience (69% of UK travellers choose a package for this very reason) in tangent with a more personalised experience. In short, there is a tremendous opportunity to fulfil aspects of a package holiday - practicality, ease of planning - while still empowering guests with freedom of choice. In doing so, hotels can also increase their efficiency with standardised services and enjoy more predictable demand for these offerings.
Creating experience through choice of service
A great travel experience needs more than just the perfect place to sleep. A recent survey of global travellers found that almost 50% frequently or always use extra-services at their hotel or accommodation and 30% of Booking.com customers paid for these services during their last trip. So the appetite for add-ons like meals and experiences is clear.
The list of potential services that travellers value is long and varied. Our research found that the top services travellers would purchase are related to food - in particular breakfast, transportation including parking and shuttles, spa services like massages and in-destination experiences such as tours and activities.
50% of global travellers frequently or always use extra-services
Often these services are popular for the simple reason of convenience - waking up to a freshly cooked breakfast is more appealing than having to seek out a cafe early in the morning. There is also a sense of FOMO (fear of missing out) often driving these purchases, as the guests perceive them to be services that could sell out in advance of the stay itself.
We know that 84% of guests check a property’s services before booking, so being able to build these into the overall experience from the very start of the journey is a big plus point for attracting guests and creating a more package-like proposition.
The benefit for partners
Helping guests find the services that complement their trip experience - and giving them the means to secure these pre-arrival - is not only beneficial for the guest, it’s also advantageous for our partners.
Firstly, offering services that are personalised to the needs of the guest improves their overall experience, particularly when these are available at the right time of interest. Upselling ancillary services (at scale) is also beneficial for its ability to diversify and grow revenue beyond room bookings. Finally, extra services offer new ways to differentiate from the competition - while your competitors may have a similar room offer, you can create real point of difference with the likes of dining, spa treatments and even travel solutions.
While our early findings undoubtedly show a strong signal towards extra-services being a significant customer need, there is still more for us to learn as we continue testing our offering of extra services through their entire journey - from search to stay and beyond. In the coming months we’ll be working on new ways to enable our partners to sell their extra services in a personalised and scalable manner, prior to the guest’s check in. For example, evaluating collaborations with digitally enabled third party service providers, helping partners extend their ancillary offer without having to make huge investment themselves in creating these amenities.
Making the guest’s trip experience smoother and more delightful by showing them highly relevant services offered by the accommodations where they stay - based on their trip purpose and interests - is a really exciting prospect. Bringing this opportunity to more partners around the world will be a key focus for us as we move into 2020.
- A recent survey of global travellers found that almost 50% frequently or always use extra-services at their hotel or accommodation
- Top services travellers would purchase are related to food, transportation, spa services and in-destination experiences
- 84% of guests check a property’s services before booking, so there is a great opportunity to engage them pre-arrival and secure their interest
- Upselling extra-services can help diversify and grow revenue beyond room bookings