Research from Turneo, a platform that helps hotels organize in-destination activities, revealed a direct correlation between experience focus and revenue per available room (RevPAR).
The company, a PhocusWire Hot 25 Travel Startup for 2024, analyzed publicly available data from 136,600 total properties globally, including 122 hotel groups with 12.2 million available rooms and a total of €131 billion in revenue.
While experiences are often looked at as “add-ons” Turneo’s research suggests that an experience-first strategy has a greater financial impact.
According to the company, a hotel with a "high focus" on experiences, like one that has roughly 30% of guests booking these services, can anticipate a 55% lift in RevPAR. They also see positive effects during the pre-stay, during-stay and post-stay phases, including lower cancellation rates, higher daily spend and higher reviews and re-booking rates.
Subscribe to our newsletter below
To determine focus level, Turneo created a 15-point “Experience Index,” categorizing hotels based on five criteria: how brands featured experiences in messaging, how unique and different experiences were, whether experiences were connected to the local culture and community, whether experiences could be personalized and the role of experiences within brand identity.
Those with a high focus on experiences (scoring between 10 and 15 on the Experience Index) had a 262% higher average RevPAR than those with a low focus (scoring between 0 and five) and a 104% higher RevPAR than those with a medium focus (scoring between five and 10).
For every additional point scored on the Experience Index, Turneo found that hotels saw an annual average increase of €2,564 in RevPAR.
“The analysis reveals a statistically significant correlation between a hotel’s focus on experiences and the revenue it generates per room,” Turneo said in the report. “Simply put, the more a brand invests in offering and promoting meaningful, personalized and locally rooted experiences, the higher its RevPAR tends to be.”