Big Interview: The importance of gift card retailing in the hotel industry as Sabre unveils new offering

This month Sabre unveiled its new gift card technology. We chatted with Guy Barnes, head of Sabre Hospitality to discuss why there is a need for this and how it plays a part in personalisation.

What steps can hotels take to start implementing retailing strategies effectively?

Hotels can start quickest by adopting technologies that enable personalisation, such as gift card programs, which are simple to set up and can quickly generate incremental revenue. Embracing a mindset shift towards selling not just rooms but a wide array of personalised experiences, products, and services is key. This includes considering every possible guest preference as an opportunity to offer something unique, thereby enhancing the overall guest experience and driving revenue.

What future trends do you foresee in the hotel industry regarding retailing?

The hospitality industry has a huge opportunity to unlock new revenue growth streams beyond the traditional guest room, which will also enhance the experience and lifetime value of the guest. The future of retailing in the hotel industry will leverage technologies to offer a wider range of personalised products, services, and experiences, extending beyond the booking journey and stay itself to encompass every aspect of the guest's journey. This will likely include more sophisticated use of data analytics to not just predict guest preferences and drive increasing conversion, but ultimately include revenue optimisation, both of which enhance guest loyalty and drive revenue growth.

What is the current state of personalisation in the hotel industry?

The hotel industry is generally lagging in adopting personalisation compared to other sectors. While many companies recognise the need for harnessing personalisation with AI and machine learning to improve their business performance, only a small percentage have begun implementing these strategies.

How can hotels use personalisation to enhance revenue generation?

Sabre Hospitality’s view is that hotels can personalise offerings to drive a richer guest experience by offering not just the room but also a myriad of non-room offers. Extending the ability for consumers to buy ‘anything’ at any point in their journey—pre-stay, in-stay, post-stay—hotels can drive a significant growth revenue stream as well as brand differentiation.

What role do gift cards play in the hotel industry's move towards retailing?

Gift cards serve as a strategic gateway for hotels to begin to sell products and services beyond the room. Leveraging Sabre Hospitality’s retailing capabilities, hotels can meet the growing consumer preference for experiences over material goods, offering gift cards that can be redeemed across hotels and against curated experiences tailored to guests' preferences. Powerfully, gift card recipients spend on redemption typically exceeds the card's value, with 75% overspending by an average of $38.

Can you share some results from hotels that have adopted personalisation strategies, especially around gift cards?

Early adopters in the hotel industry utilizing Sabre Hospitality’s SynXis Retail Studio have seen significant increases in revenue, with examples of revenue increases by 7 times, and units sold by 11 times. This showcases the powerful impact of taking on a new mindset to adopt retailing and sell more than ‘just the room,’ meeting the increasing demands of consumers for personalised offerings and the best guest experience.

How does the implementation of gift cards align with the trend towards personalisation in the hotel industry?

Implementing gift cards aligns perfectly with the trend towards personalisation by offering guests the flexibility to choose how they spend, be it on the guest room, products, services, or experiences. It taps into the increasing consumer preference for experiences over goods, allowing hotels to provide personalised offerings that can significantly enhance the guest's stay and overall satisfaction.

Can you discuss the concept of 'breakage' in the context of gift cards and its effect on hotels?

'Breakage' refers to the portion of gift cards that are paid for but never redeemed. While hotels aim to encourage redemption to drive additional spend and deliver guest experiences that will lead to repeat business, cards can be lost or forgotten, with those unspent monies going directly to the bottom line as pure profit.