Set Up a Profitable Hotel POS Outlet With This Guide

Point of sale (POS) outlets in hotels are pretty common these days. Not just that, they are profitable too.

However, hotels cannot simply go ahead and set any outlet they want. I mean, they can, of course. But that might not turn out to be profitable.

If you’re a hotelier and wondering what kind of a point of sale to set up and how, then you’re at the right place. Because in this article, I am going to cover the ins and outs of setting up a hotel POS outlet.

What is a Point of Sale Outlet?

A hotel POS outlet refers to a place where a guest/customer makes a payment for goods or services. Further, sales taxes may apply in these outlets.

Types of POS outlets

Now, there are different types of POS outlets. Here are some of the most common types of point of sale in a hotel:

• Food and Beverage
• Boutique
• Personal care
• Travel desk

However, the type may vary depending on the hotel. Meaning, hotels may even decide to open a store that doesn’t fit in the existing categories, its offering, and the space it has for the outlet.

The Role of These Outlets in a Hotel’s Revenue

There’s no sugar coating. POS outlets significantly contribute to a hotel’s bottom line.

The hotel business is a bumpy ride. Sometimes people don’t show up even after reservation, they cancel their stay at the last minute, low occupancy for a longer time, employee turnover, and whatnot.

If these sorts of scenarios continue to occur for an extensive length of time, hotels might end up facing severe losses.

What can be done? Setting up an additional avenue to generate revenue (Oh! That rhymed). It will definitely ease the pain, if not completely mitigate it.

This is where POS outlets come into the picture.

These outlets are a great way for hotels to upsell, cross-sell, and give a much-needed push to their revenue.

And it is not just about selling goods and services when there’s low occupancy. Even during 100% occupancy, these points of sales in a hotel can add additional cash to the revenue.

Further, hotel POS outlets are also a great way to cater to guests/customers who are not in-house.

For example: Hotel Maiden has failed to achieve 100% occupancy for more than 6 months now. However, the hotel is somewhat still functioning well with more than a decent revenue. How? Hotel Maiden has a restaurant that hits the top sales day in, day out. It is a concept restaurant inside a hotel that has developed sturdy marketing and operational strategies because of which the tables are always occupied.

POS outlets aren’t just nice-to-haves; they are your revenue boosters (if done right). We have even done some detailed articles on this. You can refer to them for tips.

•  Boost You In-House Hotel Restaurants’ Sales
• Increase Hotel Bar Sales Significantly

Tips to Set Up POS Outlets in a Hotel

Now, let’s address the elephant in the room — how can a hotel set up a POS outlet?

There are a lot of things that go behind the scenes while establishing a store/service inside a hotel. However, it’s not a mountainous task; with some sincere analysis and tactics, any hotelier can pull this off.

1. Determine the type of POS outlets you want to set up

I am sure, you have different ideas in mind. As the first step, what you can do is list down all of them. You can also seek inputs and feedback from your colleagues and acquaintances.

Once you do it, try to figure out which ones are more likely to be profitable and sort them.

However, do not discard the other ideas; you might have to consider them as well later.

2. Determine the types of guests you cater to

The type of guests you cater to matters when you’re planning to set up a POS.

Let me explain with an example.

Your hotel mostly caters to business travellers. And over the years you have noticed that most of these travellers book with your hotel just to get a nice sleep after a long day or conduct meetings at your hotel banquet.

Now, you’re planning to set up a fashion boutique. Do you think it will be profitable? Unlikely. 

I am sure you have other guests as well who would love to purchase at the boutique, but that’s a very tiny group.

Setting up an additional avenue of sales is like hammering on a thin piece of metal. You have to be very precise and find a middle ground.

3. Find out the spending pattern of your guests

Spending patterns speak volume about your guests. The deeper you dig, the better you understand a significant part of their psychology behind making a purchase.

If you haven’t tapped into this aspect, it is time for you to do that.

Look at your past data and determine how much your guests have spent and on what. Now, sculpt every piece of information into meaningful insights.

For example: You are able to put your finger on the data and have figured out that your guests have spent a notable amount of money on personal care. Meaning, you can bet on opening a spa or a saloon to drive more sales.

4. Perform compset and market analysis

This goes without saying. Competitor analysis is not to be sneezed at.

Even though you don’t like getting back to the salt mines, you have to perform compset analysis. Or else, you’re lagging. Big time.

Spend a good amount of time and effort to see what your competitors are doing in terms of POS. And not just that, also try to suss out their revenue.

This will give you a firm grasp of your POS game.

We also have a step by step guide on how to perform compset analysis. Do check it out here.

5. Create a strong budget around all the aspects of the outlet

Whenever there’s a new project, one of the first imperative things to consider is budget. Because a budget can make or break a business.

Once you decide on the outlet, get in touch with a financial expert and curate a budget that fits perfectly in line with your hotel’s every monetary aspect.

Word to the wise: There’s a rule in budgeting that every business must follow and I want you to do that too. DO NOT GO OVER BUDGET.

I have done a blog on hotel budgeting sometime back. You can refer to that as well and see if you find an idea.

6. Set up a team

Your hotel POS outlet is not going to manage itself. You need a team that is well trained in all the aspects of handling POS operations.

Now, there’s a mistake that most of the hoteliers make while forming the team — they overhire staff. Do NOT do that.

If you’re not able to decide how many employees you’re going to need to seamlessly run the outlet, get expert help. But make sure, you’re not overspending in the name of hiring.

Not to mention, always cover the hiring aspect in the budget. It will help you do away with unnecessary hiring and save a few bucks.

Word to the wise: Staffing in the hotel industry is a tricky task. Over and above, the industry is also known for having a high employee turnover rate. Therefore, ensure that you’re levelling up your hiring skills.

7. Invest in marketing

If you want your POS outlet to stand out you have to tell a story that connects with a wider audience. And that can be achieved through marketing.

Be it social media, ads or traditional marketing, bet on everything.

Here’s a blog that explains the nuts and bolts of restaurant marketing. It is not exactly for a POS like an in-house restaurant, but the points mentioned here are gems. Do give it a read.

Restaurant Marketing Strategies That Actually Work

8. Look for cross-selling opportunities to in-house guests

Now that you have learned almost all the prime elements to set a POS outlet in your hotel, let’s look at another aspect that plays a vital role.

Hoteliers must utilise their POS outlets as an opportunity to cross-sell. When you have a significant inflow of guests, make sure you pass on the word about the point of sale in your hotel and persuade them to make a purchase.

This is a tricky job, no doubt. However, if done right, it can do wonders. You’ll witness your sales going through the roof.

But many hoteliers do not have the required knowledge or expertise to pull such a strategy (which is completely understandable). This is where revenue management experts come into the picture.

Do not shy away from seeking help from experts. Be flexible and as game as Ned Kelly.

How Can Hotels Manage These Outlets Efficiently?

It might now seem like a cakewalk; however, there’s one more thing you must keep in mind. Setting up a hotel point of sale is one thing, but you also need to manage it in apple-pie order.

For that, you need a POS system.

If you aren’t aware of such a system, it is a tool that helps in managing POS outlets. To elaborate, a POS system is basically a central component that is used to automate and streamline everything from sales, inventory management, payment processing, to customer management.

There are several hotel point of sale systems available in the market. But you must find the right one if you want to eliminate manual entry and reporting errors down the road.

We have a guide that explains the nuts and bolts of selecting the right restaurant point of sale system. You can check it and see if there’s anything useful you find for your POS outlet.

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