The Point: Master the art of selling beds!
We have all heard about making some extra cashola on the side by selling additional products & service, but at what cost? When I first started in backpacking all those years ago, I remember frequent visits from other operators coming around saying “it’s all about selling travel” and I was like yeah, yeah, you can’t even sell your own f###### beds!
I am not saying don’t sell additional products & services, I am saying focus on your primary source of income, your core product, which is selling beds, get that right then start focusing on other areas and additional revenue streams. I see it all the time, even in big backpacking markets like Sydney, hostels running at 40% in winter trying to push travel on long term customers who have no intention (or money) of buying anything before the warmer months come around. The aim of the game is to maximize your bed occupancy and anything under 100% year round leaves plenty of room for improvement.
Now, if you do run a high occupancy, then focus on your ABR, and set some controls to obtain higher revenue generating guests. If you do have a high occupancy, and a high ABR (meaning high revPAB revenue per average bed), then focus on the extra revenue streams. Only than will you be justified by turning your focus from revPAB to trevPAB (total revenue per average bed). You can read more about ancillary revenue here.
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Author: Adam Murphy