These were the words of Guy Barnes, Head of Sales, Europe, Sabre Hospitality, speaking and sponsor of Global Revenue Forum 2024 to deliver an enlightening session on the importance of personalisation in today’s retail model. In a world where consumer powerhouses such as Netflix present a unique selection of recommendations to their subscribers based on their streaming history, and Starbucks offers a staggering 87,000 variations of drinks available based on the ability to customise your order according to your preferences, a personalised approach to retail is now a given, in order to thrive in today’s market.
Guy illustrated this with some pretty powerful statistics based on a McKinsey report. Such is the impact of a personalised approach to the customer journey, companies with above-average revenue growth generate 40% of their revenue from initiatives that drive personalisation and 71% of consumers now expect communications to be personalised according to their likes, preference, and purchase history. Personalisation is big business.
Develop the relationship, not the transaction
Just as in human relationships, consumers respond positively when companies focus on developing the relationship rather than the transaction, by responding to their behaviours – be that purchase history or browsing history – with a personalised approach. Such is the positive sentiment generated from a personalised communication strategy, 76% of consumers will respond positively and are likely to purchase with 78% more likely to make repeat purchases on receipt of personalised communications. Given these statistics, deploying a strategic approach to personalisation is key for B2C businesses to compete successfully in the marketplace.
We need to do something different
Hospitality has historically scratched the surface with personalisation but there is a long way to go to catch up with other industries and meet the demands of the guest. ‘For so long, room revenue has been king,’ said Guy. ‘But with a risk of peaking ADR’s in certain territories, if the industry is to see significant growth, we need to do something different to drive total revenue.’
In a world where everything is an attribute, the possibilities are endless.
Enter Attribute-based Selling (ABS), where guests have the possibility to customise their stay with the purchase of add-ons to design their ideal in-house experience. Many of these – room upgrades, food and beverage options, and late check-outs – are familiar and have formed part of upsell strategies for some time now. But as Guy said, ‘Why stop there? In a world where everything is an attribute, the possibilities are endless.’
Elevates guest experience
Not only does ABS generate additional revenue, but it also helps to deliver a superior guest experience. With the ability to design their hotel stay exactly to their preferences, guest’s expectations are being exceeded. ‘The more you allow a guest to build a dream experience, the greater their propensity to buy,’ said Guy.
As post-pandemic guests increasingly look to experiences rather than material goods, hotels have the perfect opportunity to not only drive incremental ancillary revenue but also meet guest demands, with the option to offer everything from massages to theatre tickets allowing guests to design their own dream stay. ‘Hotels that have embraced attribute-based selling have seen a 700% increase in ancillary revenue,’ said Guy, reinforcing the positive impact an attribute-based approach to sales can have on a hotel’s revenue.
The potential of gift cards
For those hoteliers looking to implement an ABS approach, Guy suggested Gift Cards may be an easier-to-implement alternative, with the potential for guests to redeem across all properties and assets within your group. With the gift card market projected to hit $2.3 Trillion by 2030 and 50% of consumers stating they would prefer to receive a gift card than a physical gift, the potential is huge. Commercially, they are an attractive offering for hoteliers. Sabre reports a significant 75% of gift card holders overspend on their gift card by $38, which combined with the value of unredeemed gift cards going straight to the hotelier’s bottom line, presents a significant revenue stream for hoteliers.
As Guy brought his session to a close, the message was loud and clear.
It’s time to change our mindset and think differently.
Room revenue is no longer king.
