Personalization and Profit: The Rise of ABS in Hotels

The difference between conventional room selling models and attribute-based selling (ABS) can be summed up with a single word: choice. Traditionally, guests have had very little choice when booking a room. They might choose between one king bed or two queens, or pay extra for a room with a view, but ultimately, they have to wait until check-in to negotiate with a front desk agent for the room attributes they want.

Attribute-based selling, however, allows guests to select their preferred room features—such as bed type, floor, or connecting rooms—at the time of booking. Unsurprisingly, the definition of ABS is evolving to include not just room features but also amenities like early check-in or late check-out and other ancillary services like spa appointments or sparkling wine upon arrival.

“Hotels will be able to move from 'room-sellers' to true merchandisers,” says Peter Waters, EVP Hotel IT, Hospitality, at Amadeus.

The ABS Advantage

For hoteliers, the benefits seem to be quite numerous. For example, an ABS sales model "enables hotels to increase their average daily rates (ADR) and optimize revenue per available room (RevPAR)," says Andrea Senarega, head of revenue strategy, BEONx. "The ability to select specific attributes leads to higher guest satisfaction, as it provides a more personalized and transparent booking experience. It also helps hoteliers to set and manage guest expectations well in advance during the pre-stay period."

ABS also serves as a means for differentiating a brand or property within a highly competitive market. 

"When looking at a typical OTA website, sameness pervades," explains Klaus Kohlmayr, chief evangelist and development officer, IDeaS. "All hotel pages look the same, and there is no opportunity to really differentiate and highlight their unique features. Allowing guests to customize their experience and personalize their stay by paying only for the features they value most will allow hotels to stand out from the ocean of sameness."

Not only does ABS put a measure of control into the guest's hands, it also allows hotel marketing teams to drive loyalty by demonstrating that they know who that guest is and what they want by specifically offering attributes for sale that match the guest's personality type, age, nationality, or reason for visiting, Waters says.

For example, hotels would be able to strategically tailor marketing efforts to promote family-friendly features to vacationing families while offering tech-savvy amenities to business travelers, Senarega notes. Moreover, dynamic pricing of attributes enables hotels to attract price-sensitive guests with competitive rates for base rooms while capitalizing on additional revenue from guests willing to pay for premium attributes.

Weighing ABS for Your Property

Of course, before implementing an ABS sales model, hoteliers will need to carefully consider the pros and cons for their particular property based on its size and geographic location. For example, ABS can streamline operations for large hotel chains by standardizing attribute offerings across multiple properties, explains Daniel Lofton, senior director of hospitality Solutions, Americas, Duetto. It can also enhance brand consistency and improve upselling opportunities. However, implementing ABS in large hotel chains could be a complex task due to the scale and diversity of the portfolio.

On the other hand, "ABS offers a significant competitive advantage by allowing for greater customization and personalization, which are key selling points for boutique and independent hotels," Lofton adds. "The disadvantages include potential higher costs and complexity in implementation due to limited resources and technology infrastructure."

Similarly, city hotels that cater primarily to business travelers could benefit from the frequent adjustment of attribute pricing but face challenges with varied demand and complex inventory management, Senarega says. Meanwhile, vacation hotels could enhance guest satisfaction and revenue by leveraging longer stays and leisure-focused attributes but will have to navigate seasonal fluctuations and higher implementation costs.

"The biggest consideration is overall complexity versus revenue benefit," explains Andrew Rubinacci, chief advisory officer, FLYR. "If you are a select service hotel with few products or features that can be monetized, it may not be worth the extra complexity in breaking apart attributes from room types. There may be very little upside. But, if your property does have more complexity, then ABS must be considered."

Key Considerations for ABS Adoption

For hoteliers that do decide to move forward with ABS implementation, David Millili, CEO, LodgIQ, recommends that they first evaluate whether their existing tech stack can support ABS or if new investments are needed.

"Putting racecar wheels on a 1998 Ford Taurus won't turn it into a sportscar," he explains. "Make sure the foundational tech stack is solid before considering enhancements."

However, Priya Rajamani, VP of implementation and support, Stayntouch cautions hoteliers not to succumb to the misconception that implementing ABS always necessitates a complete overhaul of the existing technology stack. “ABS is often seen as too difficult to implement. However, when powered by the property management system, it can be deployed without changing a hotel’s existing room-category inventory model. With the addition of automation, hotels can offer guests real-time availability down to the individual room number, ensure the fulfillment of attribute-based room purchases, and provide guests with an enhanced level of personalization throughout their booking and stay experience.”

Second, Rajamani recommends setting up a meeting with a technology provider that can help hoteliers take stock of their hotel's available attributes.

"Not all of a hotel's attributes are immediately obvious, especially when you consider its location. Many hotels discover that there's a lot of potential to leverage room features in ways they hadn't initially realized," Rajamani says.

Third, once these attributes have been identified, hoteliers need to assess market demand and guest willingness to pay for specific room attributes, Senarega says.

"This involves conducting thorough market research or analyzing existing guest data to identify which attributes are most desired across different guest segments," she adds. 

Rajamani agrees, noting that accurately labeling and pricing attributes according to their true value is critical. “To maximize the benefits of ABS, it is imperative for hotels to approach the process with rigor.”

Fourth, don't forget how implementing a new technology can affect the staff, Millili says.

"Be sensitive to busy seasons, and not just guest-facing busy seasons," he notes. "Even if September is a slow occupancy month, it is busy for Sales participating in RFP season, so if it is anticipated that Sales will be involved, find a time when they have the bandwidth to assign to it."

And, of course, ensure staff are well-trained to manage ABS effectively.

Fifth, do a cost-benefit analysis to estimate potential revenue gains from upselling attributes versus the costs of implementation, Millili adds. "The risk to pattern disruption is important to consider and may impact which seasons you are willing to make ABS available."

Sixth, conduct a pilot program to gauge its impact before jumping into a full-scale rollout, says Millili. Additionally, hoteliers may want to start with a limited set of attributes first and then expand based on guest feedback and operational capacity.

"Hotels should start with the guest attributes that will bring the most value and look to implement these first," Waters says. "This way, they can start reaping the benefits of ABS and gradually build in the complexity."

Keep in mind that offering dozens of choices isn’t always better for the guest. Instead, that many attributes could easily overwhelm the guest and drive down conversion, Rubinacci says. To help prevent decision fatigue, hoteliers should link their CRM with their RMS and booking engines. Why? The data from these programs can be used to determine a customer’s stay occasion and previous behavior in order to then filter and personalize the attributes that are presented to them during the booking process.

Lastly, be patient.

"As the industry adopts ABS, we need to crawl, walk, and then run," Rubinacci says. "Even though we are only trying to meet the guests' needs, we must not move beyond what they are comfortable seeing."

For example, when internet bookings first became available, it took time and incentives to get customers to move away from the phone and engage with the new technology even though it was objectively better, Rubinacci explains. "While change moves much faster these days, we should not underestimate the level of change and adoption needed to get customers to engage with us differently."