How to open a hotel gift shop and make this complementary business a success
A combination of traveling essentials, souvenirs, and snacks are what you expect to find in most hotel gift shops. However, many hotels have let their shops become stale, and as a result, the entire concept of gift shops has suffered. You can create a complementary business with a prosperous hotel gift store. The trick is to avoid a few common mistakes, excel in service, and make decisions that will enable your store to become profitable.
The U.S. nationwide experiences about 16.75 billion in sales each year just from gift and souvenir stores. Opening a gift shop in your hotel is an opportunity to engage travelers and immerse them within a unique guest experience.
Avoid common mistakes which make guests avoid hotel shops
Apart from the strong competition from online retailers, there are many common missteps that lead to empty hotel shops. However, you can avoid nearly all of them with a bit of planning and effort.
Only stocking the basic necessities for travel
Marking up prices to take advantage of tourists
Choosing a generic inventory of souvenirs
You already have a retail space, and access to steady foot traffic. Because the significant hurdles of starting a business have already been overcome, you can instead focus on the more specific aspects of opening a small gift shop.
Stock more than the basics
While basic toiletries and frequently forgotten items are nice to have, think outside the box. Useful, fun, or intriguing gifts and novelties can grab a lot of attention for a hotel souvenir shop.
When evaluating what to sell in a hotel gift shop, carefully consider:
Your guests’ needs
Novelty or iconic aspects of your local culture that draw in tourists
Items that are also part of an experience (souvenir mugs used in your dining hall, or brick fragments from a fallen tower of your historic hotel).
Popular products made in your region (organic cosmetics, spices and herbs)
Useful or multi-function souvenirs such as travel guide memory books
As you learn how to run a gift shop business, you’ll see that creativity plays a bigger role than you might have expected. Get creative with the items that you keep in stock and rotate them periodically. Have seasonal items or items which can help you raise brand awareness.
One of the reasons that guests are hesitant to enter a hotel gift shop is because of the prices. For far too long hotel owners have overpriced their products and justified it because they offer convenience to travelers. With so many resources available to help tourists to navigate a foreign country, it is reasonable for travelers to find a convenience store or market on their own.
Move away from the mentality that you're offering convenience. Instead, price appropriately and give convenience as a perk.
Cater to traveling shoppers
Catering to travelers is different than meeting the needs of any other type of customer. The guests in your hotel will have different times of the day when they’re shopping. Additionally, they may shop for different items or seek out varying comforts from their own country.
Knowing tourism information such as which countries visit your corner of the world most often can help you cater to your guests. For example, India has the highest rate of tourists come in from Bangladesh, the United States, and the United Kingdom.
If you know who is coming into your area, you can stock your shelves with familiar items, and novelties which cater to those travelers. It’s also possible to take into consideration the time difference that these guests are experiencing and accommodate your shop hours for travelers who aren’t on local time yet.
Yes, someone could rush down to your shop in the middle of the night for a toothbrush, and that same guest could be souvenir shopping in the mid-afternoon. When you deliver on both of these needs, then you have a higher chance to see success for your hotel shop.
Travelers now expect immersion into the local culture. Give your guests insight into your local culture through your hotel store, all the while supporting your community.
If you want to cater to your guests, then deliver something in your hotel gift store that represents your region. Showcase local art or support the local environment preservation efforts with "leave-no-trace” necessities.
Treat hotel shops as profit centers
Hotel owners and managers will often see a gift shop as a necessary expense, but there are many ways that you can profit from these stores. To do so, get creative. Approach the concept of a souvenir shop in a hotel with a new perspective.
Phnom Penh's White Mansion Boutique uses their gift shop to serve as a platform for disabled Cambodian artisans. Their "do good" mentality has boosted its foot traffic.
The White Mansion Boutique's gift shop is an excellent example of hitting a particular target audience. They know that the people who stay with them want to experience Cambodian culture, and supporting Cambodian artisans is one more way to do that. It also brings in a new level of creativity and quality that their guests probably won’t find in other hotel lobbies.
Other hotels that treat their gift shops as a profit center include the Queen Mary. This historic ship now serves as a hotel, and their gift shop takes guests back to the roots of the Queen Mary. In their gift store, you can find hotel merchandise as well as English snacks that you would otherwise have a hard time locating in the United States. Then, they come full circle with their branding by offering many nautical themed items, and customizable souvenirs.
Surveys on hospitality trends throughout 2019 showed that customers want specialization and customization rather than shops that have “something for everyone.”
The Queen Mary focuses on keeping their branding consistent with what they sell and taking a very professional approach to handling stores. They know the shopping patterns of their guests and update their gift shop inventory to reflect various events. Their gift shop inventory updates regularly to reflect local holidays, events, and even the wedding season.
Learning how to run a successful gift shop does not happen overnight. However, you can look at recent trends, and what other stores are doing right and recreate some of the aspects that you like in your store. From the examples here, it's clear that focusing on quality, authenticity, and branding can have a positive impact. You should spend some time considering the marketing opportunities available as well.
Your hotel likely puts a lot of resources into marketing already. Use those events to promote your gift shop. You can also invite in local celebrities and pop-up shops, or host trunk shows. Out-of-the-box marketing tactics are a great way to get people in your doors and shopping at your gift store.
Deliver extraordinary service
Once people are in your store, you need to make sure that they have a remarkable experience. Start with your staff and then proceed to create wonderful interactions at every other customer contact point. Because so many people would rather order what they need online, customer service has become a gamechanger for brick-and-mortar stores.
You should expect the best from your staff. However, to enable your team to provide extraordinary service, again and again, you need to give them the necessary tools and training.
Train your staff
There are many small aspects of customer service that can have massive payoffs, especially when it comes to your reputation and brand management.
What can your staff do to make a gift shop extra special? Train your staff to:
Gift wrap with a bit of flair
Offer package delivery to their room
Help guests connect with delivery services to ship packages to their home countries
Identify and act on opportunities to provide a more inclusive or convenient experience (such as speaking in the guest's primary language).
One important takeaway here is that your staff need to have free rein to go the extra mile for your guests. If they need to wait for manager approval on everything, it will only inconvenience your guests whenever a staff member wants to do something nice, such as arrange for package delivery.
Give your guests a stress-free experience
Vacations are often unnecessarily stressful. Hotels make great claims that they ease the stress of travel plans and many other struggles. But, your gift shop can make an impact there as well. Many travelers have to jump through hoops for very simple things such as sending a purchase to their room. You should have a gift shop POS system in place to make it easy for guests to manage their payments and handle their purchases.
Leveraging guest data to create small moments of convenience is the new way to personalize an experience. Expanding guest convenience across all contact points is critical for hotels and their gift shops.
To manage this, you might consider pairing a POS with your PMS (Property Management System). Poster POS and Cloudbeds integrate seamlessly to combine property management with processing sales. In a hotel setting, it means that it's possible to assign orders to room numbers. It also allows guests to have more payment options. Guests can choose to pay at the counter in the gift store or invoice their hotel room and pay when they checkout. Your staff can do this all quickly in just a few steps meaning very little wait time for your guests.
Choose between owning the gift shop or leasing the space
So, what is the cost of starting a gift shop? Unfortunately, the start-up costs for gift shops vary so much by location, size of the store, and products that it’s impossible to give clear numbers on this topic. However, take into consideration that you're already ahead of your competition because the retail location itself is yours. You may even already have service staff to put into place.
What you will need to get your gift shop started:
Display shelves and cabinets
Locks and security if holding expensive or unique items
Point of Sale system
Inventory or stock of goods
Your initial inventory purchase may be the largest investment you put into your new store. Ordering the products that you will sell can be expensive if you're working with customized designs or specialty materials. How much does it cost to open a gift shop? The total amount necessary to open your gift shop will depend largely on what items you decide to stock.
When you have a clear understanding of what it will cost to open your store, you might choose to lease out the area. Leasing out a retail space could secure the hotel with steady revenue through the rental payments, but that is the extent of it. Leasing your hotel retail space should be a back-up plan because it doesn't have growth potential.
However, if you don't have the resources to open a gift shop, then leasing the space is not a bad idea. There are some drawbacks to consider, such as brand disassociation, and a gap between the store and hotel operations. You will need to choose which option is right for you. Yes, owning a gift shop does require a substantial amount of effort; however, it has substantial earning possibilities. Whereas leasing the space will only secure a small monthly payment to your hotel.
When opening a gift store in your hotel, look at what other lobby stores have done wrong, and where they have excelled. Avoid basic mistakes like overcharging guests for the sake of it or lacking any creativity when it comes to inviting guests into your shop. Then implement the good things that gift shops have done over the years, such as a focus on regional representation and community involvement.
Looking at the bigger picture of your guest's expectations can help you decide what to sell in a hotel gift shop, and how to market your shop too. After you have a clear understanding of what your guests want, then you can start working with your staff to deliver exceptional service. Make it comfortable for guests to shop, and easy for them to pay. It's a bit of work, but for most hotels, it's worth it to own the gift store and provide guests' with a complete experience.
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