While hotels may see lodging as a priority, there is plenty of room for growth to increase onsite spending on entertainment and food & beverage.
A 2022 study from the American Hotel & Lodging Association and Oxford Economics found that a majority of guest travel spending occurs outside of the hotel at about 53% of total spending with lodging account for just 31% of total spending. Excluding transportation, the next largest guest expenses are on food and entertainment making up an about $247 billion market.
One of the best ways to bring in more revenue is offer more onsite entertainment offerings, which can dually can increase food and drink spending as well. One such entertainment offering, which has grown massively in popularity in the last few years is karaoke.
We’re here to go through how bringing karaoke to your hotel can increase onsite guest spending.
This blog goes over:
Why should hotels incorporate karaoke
While historically karaoke held connotations of dive bars, in recent years karaoke has undergone a massive evolution and surge in popularity. Incorporating karaoke can be a massive benefit for both attracting customers and building your brand.
1. Elevated experiences:
Offering karaoke can turn an ordinary hotel stay into an unforgettable memory. Imagine unwinding after a day of meetings or sightseeing with your favorite ballad or pop hit.
Hotels that have incorporated music and karaoke into the hotel experience have seen amazing success. Backstage Hotel in Stockholm offers open mic karaoke as well as bookable karaoke rooms to their guests. They also have connected their hotel with other musical offerings like The ABBA Museum and local recording studies to make it a full musical experience.
2. Broadened appeal
It's not just about the residing guests. With karaoke nights, hotels can attract local enthusiasts, elevating their space into a community hub.
Catering to those seeking a more intimate experience, private karaoke rooms are a brilliant way to convert underused spaces. With booking rates competitive and a strong appeal, guests often end up extending their time, and their tab! From a business standpoint, the pre-book karaoke business model aligns well with the booking systems of hotels.
Download our karaoke room business guide here.
Karaoke rooms, while previously popular in countries like South Korea and Japan, have exploded in popularity across all markets. Karaoke rooms are especially popular for attracting groups traveling together who are looking for a more intimate late-night experience.
3. Boosted onsite spending
Music, combined with a relaxed ambiance, often leads guests to indulge more, be it on exclusive cocktails or gourmet snacks.
Karaoke turns the hotel bar or lounge into a vibrant performance space, offering guests the thrill of a live audience. Studies indicate a 20-40% rise in F&B revenue on such nights.
Create multi-functional spaces with karaoke
While a space only dedicated to karaoke can be great, by creating multi-functional spaces you can get even more occupancy rate out of your spaces.
Open mic karaoke
For open mic karaoke in a bar or stage area, it is normally quite easy to maintain a multi-functional space as the equipment for karaoke can be shared with the equipment for musical performances, comedy nights, or other events you may have.
But if you are running open mic karaoke in a smaller bar area, where leaving the equipment may not be ideal, or if you want to have portable karaoke, you can consider making a portable karaoke set-up like at Generator Stockholm. Their special portable setup allows them to bring a karaoke party to any space or change locations in the bar if there are concurrent events.
When it comes to karaoke rooms, hotels stand to gain significantly in terms of increased occupancy rates by implementing a dual-purpose karaoke and conference room.
Business travelers might be enticed to extend their stay, knowing they can wrap up a day of meetings with an evening of entertainment. You can easily transform any conference room into a karaoke room with some great lighting and decorations. Quality Hotel Panorama has a private meeting and event space, that can be dually booked and transformed into a karaoke room.
Case study: How Steam Hotel implemented karaoke
Building upon the previously discussed framework of integrating Singa's karaoke system into a hotel's entertainment repertoire, let's delve into the financial specifics:
Steam Hotel boasts two karaoke rooms, each spanning 20 sqm, and these rooms are a hub of musical activity with an average of 5,000 karaoke songs sung every month, translating to about 250 hours of karaoke sessions monthly. The hotel places its guests at the forefront, reserving karaoke primarily for them. However, in a bid to cater to a wider audience and foster community relations, a dedicated time slot from 6-8pm daily has been set aside exclusively for non-guests.
Diving into the finances, each karaoke room comes with a CAPEX involving a hardware and design cost of 12k€. Additionally, the licensing for the Singa karaoke system incurs a monthly fee of 400€. For those looking to book a room, the price stands at 50€ for every 2-hour session. This pricing strategy results in a consistent monthly revenue from bookings alone ranging between 6000-7000€, not to mention the supplementary revenue boost from food and beverages.
Given these figures, the payback period for the investment is impressively short, standing at just 3 months. It's worth noting that this successful model has been operational since late 2019, proving its sustainability and profitability over time.
In essence, the integration of Singa's karaoke system not only elevates the guest experience but has also shown to be a lucrative investment for hoteliers, offering both direct revenue from bookings and additional income from F&B sales.
You can use our karaoke room profit calculator to learn how much your venue could make.
Implementing karaoke with Singa
Incorporating karaoke into your hotel’s amenities can be a game-changer, not only in terms of entertainment but also in fostering community and guest engagement. With Singa’s comprehensive and consultative approach, hotel operators are given a guided path from ideation to execution.
1. Consultative approach
Singa believes that every hotel has a unique vibe, clientele, and set of needs. That’s why the first step is all about understanding. By taking a consultative approach, Singa spends time with you, the hotel operator, to delve deep into what your specific requirements are. From understanding the nuances of desired product features to brainstorming business models that align with your hotel’s vision, Singa is right there with you, ensuring every detail is tailored to perfection.
2. Startup and onboarding
Knowledge is power. Once the initial phase of consultation is over and the direction is clear, it's time to put things in motion. Singa organizes an in-depth onboarding session, ensuring your staff is fully equipped to handle the new karaoke system. This session aims not just to familiarize the staff with the technology but to also give them tips and tricks on how to get the best out of Singa, guaranteeing a smooth and enjoyable karaoke experience for your guests.
The journey with Singa doesn’t end once the system is set up. Continual growth and evolution are vital. Quarterly business review meetings are scheduled to revisit and refine the objectives set during the consultation phase. By constantly auditing these goals, Singa ensures that the cooperation evolves in tandem with your hotel’s growth, always ensuring the karaoke system remains relevant and engaging.
4. Marketing, data & customer support
Singa goes beyond just providing a karaoke system. They aid in marketing efforts by furnishing you with valuable venue-specific data, such as the most frequently sung songs and newly released song lists. Plus, partnerships in social media can give a significant boost to your hotel's online presence. And for any challenges along the way? Singa’s dedicated customer support is just a call away, ready to assist in person, ensuring you always have a reliable partner by your side.
It’s not just about adding a karaoke machine to a room; it’s about integrating an entire experience that aligns with your hotel’s brand, ethos, and guest expectations. With Singa’s expertise in startup, development, marketing, and steadfast support, hoteliers can confidently embark on this exciting journey of offering a world-class karaoke experience.
So, why wait? Elevate your hotel's entertainment game with Singa today.