A while ago, Hotel Edelweiss in Zürs, Austria, was struggling to sell two of its smaller rooms. The solution? It bundled them together and marketed it as the “Snorer room”—giving the noisier guest their own space for the night.
Thanks to advancements in attribute-based selling platforms, more hotels like the Edelweiss are boosting revenue by selling rooms in a similarly creative fashion.
GauVendi, which worked with Hotel Edelweiss, is one such platform that is helping hotels unleash their creativity. Sabre and Amadeus are redefining room “retailing” too with their own central reservation systems (CRS).
Of course, challenges still exist, as much technological as about having the right mindset, but experts say artificial intelligence (AI) is now accelerating the adoption of attribute-based selling by hotels as they look to increase direct sales.
The rise of the attribute
Definitions of attribute-based selling can vary wildly. At a basic level, it’s when a hotel unbundles room features into multiple, smaller attributes. It can then promote these various bookable attributes while also allowing guests to search for specific characteristics based on their own tastes.
Attributes tend to be in-room features, so this wouldn’t include something like breakfast. The focus is on influencing sales as well, as opposed to a potential upsell like champagne being offered after a reservation has been made. And for now, attribute-based selling is best suited to direct channels. In fact, many believe that with the advent of online travel agencies, hotels were forced to sacrifice their individuality by having to conform to certain criteria (standard, twin, deluxe) to allow the agencies to make it easier for consumers to compare prices.
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Now, attribute-based selling is turning the tables, and hotels are regaining their independence. Popular attributes today include balcony, floor level, distance from the elevator and even ceiling height or room size. Other attributes can include “work quality,” according to Florian Montag, vice president of business development at Apaleo, which works with GauVendi.
“I want to have a real desk. I want to have strong Wi-Fi. I want to maybe have access to certain amenities on top,” he said. “Everyone has to work a little bit, unfortunately.”
Gaming consoles are another way to appeal. A study from Amadeus found two-thirds of hotel guests (63%) are willing to pay extra for features such as a specific view or floor, to have an Xbox in their room or to have local attractions added to their package.
The potential to earn more revenue is significant. Amadeus claims these sorts of features could add 12% to the average daily rate charged by the hotel, which could increase revenues by $5,300 per room, per year, for an average mid-range hotel chain.
Hotel group IHG, which was the first customer for its Amadeus Central Reservation System (ACRS), singled out elements like more space or a higher floor in its recent annual report. The average value for “luxury and lifestyle” hotels was $40 per night and $20 for “essentials and suites.”
High-growth mode
Sabre has been helping hotels sell attributes through its SynXis CRS platform and Retail Studio for several years.
“Attribute-based selling evolved really into the concept of retailing for hospitality,” said Frank Trampert, global managing director for Sabre Hospitality. “Go beyond the guest room. Think of yourself as the merchandiser.”
He compares attributes to stock keeping units (SKUs), which are commonly used in manufacturing and retailing. Sabre has categorized about 1,000 SKUs among the various hotels that use its platform.
One of its luxury hotel customers has between 10 and 15 SKUs. “These are items they sell from spas to coffee services, and the incremental revenue potential is anywhere between one and two million dollars,” Trampert said.
In this respect, Sabre works with brands like Rosewood Hotels and Outrigger Resorts & Hotels to drive extra revenue, and Trampert encourages hotels to employ merchandisers.
“The technical skill in assembling a product that is mutually complementary is different [from] revenue management,” he said.
He claimed that hotels that adopt SynXis can expect an almost 60% increase in ancillary sales.
“It's in high growth mode, and it's gaining significant momentum,” Trampert said.
What’s in a name?
For Markus Mueller, co-founder and managing director of GauVendi, a PhocusWire Hot 25 Travel Startup for 2023, hotels that adopt attribute-based selling can expect 20% extra revenue. But he prefers to call it “dynamic inventory,” as the platform changes the mix of the products.
“People are paying for a low floor, high floor, middle floor, better views or whatever,” he said. “When we sell like this, we are selling fewer lowest price products and standard room products and selling more different bundles.”
Attribute-based selling evolved really into the concept of retailing for hospitality.
Frank Trampert, Sabre Hospitality
He encourages hotels to embrace storytelling and emotional aspects. For example, he said Arthotel Bakker, in Borkum, Germany, uses GauVendi to theme rooms based on staff opinions. Some guests might want to book Annika's favorite room—which boasts "space and charm" on the hotel's booking page.
“There are huge ripple effects in terms of your positioning, differentiation as a product, as a brand compared to your competitors, compared to other channels,” Mueller said.
Breath of fresh air
The Curator Hotel & Resort Collection is another group expanding into attribute-based selling.
“It's growing,” said Brent Hayhurst, vice president of program development. “I'd say we have about 30% of the hotels doing it in some form or fashion.”
Curator has about 85 independent hotels across the United States, many of which use Sabre’s SynXis platform. Hayhurst said Curator’s role is to help hotel members look at building scale and to identify emerging technologies.
It works with about 20 “vendor operations,” including recent addition Fresh Air Sensor, which monitors indoor air quality. The company defines it as a “low-cost, high-margin room attribute” that allows hotels to leverage air quality as an exclusive guest benefit, generating ancillary revenue. Think guaranteed smoke odor-free rooms.
AI and personalization
The explosion in AI is set to take attribute-based selling to the next level because it can offer a greater degree of personalization, experts argue.
“The secret sauce, of course, is finding what is the attribute which moves the needle for the purchase or the satisfaction of the guest you're trying to sell to,” said Peter Waters, executive vice president of hotel solutions at Amadeus. “This is where modern technology like AI is coming to the fore, because for us, the secret sauce of success is having the product at the granular level matched to a good understanding of who you're selling to.”
Amadeus is also working with Accor on pilot projects in North America, said Alix Boulnois, chief business, digital and tech officer, said in PhocusWire interview last month.
For short-term rental operators, property management platform Eviivo says its generative AI-powered virtual concierge can deliver the right rooms to guests, as they can request certain features.
However, one of the issues with attribute-based selling is that the booking engine needs to know what’s actually within the hotel’s property management system (PMS).
“The challenge is that you need the data to confirm that the attribute is actually available,” said Curator’s Hayhurst. “So, you can market a balcony upgrade or city view on the website and charge an additional premium.”
GauVendi said it overcomes this by having integrations with Mews and Opera Cloud, as well as Apaleo, and is in talks with several others as it looks to expand.
Amadeus’ Waters said ACRS was built from the ground up to create a new ecosystem of attributes. “We decided to strip away the foundation blocks, which has been the main element of trade between the different ecosystem players, which was a room type and a room rate.”
He claimed it can operate in two modes. “It can still be a recipient of the inventory to a PMS, or the other way around,” he said. “With most of our large customers, they're moving the ACRS platform to be the master record of inventory. Let's call it the source of truth.”
It’s the same story for Sabre, with Trampert saying the company has to “re-architect” the technology in order to remove the dependency on just booking a room, enabling a hotelier to sell anything they want.
Drag and drop
Floor Bleeker, consultant at In2 Consulting and former group chief technology officer at Accor, thinks there’s more work to be done before it becomes entirely mainstream.
“It's still not there,” he said. “Everybody's a little bit here and there.” But he believes attribute-based selling is “a real game changer” at a time when everyone in the hotel industry uses the same systems, which renders traditional yield management obsolete.
“In the end, it's not really a competitive advantage,” he said. “They use the same algorithms to calculate what the price is going to be. It's becoming a commodity.”
His vision is for a consumer to visit a hotel website, and instead of being given a list of room categories, they instead get a visual of an empty room.
“You then start dragging and dropping attributes in it. I'm dragging a double bed in here because I like that, I'm putting a balcony in there,” he said. “Then I add experiences, like a fragrance. And you really feel it is your own room that you build. If the system becomes smarter, it actually knows what your preferences are.”
While everyone may not agree on an exact definition of attribute-based selling, few would disagree it has the potential to transform the way hotels market and sell rooms, even disrupting the way consumers search for them.
“It's a reality for certain people, and the momentum's building,” said Amadeus’ Waters.