In this ultra-competitive hospitality industry, profitability is tough to maintain. Consumers have more research power than ever and have the tools and technology at their disposal to find the best available rate with ease. This, coupled with the ongoing battle between OTAs and hoteliers for the privilege of getting the booking and owning the guest, means that it’s a great time for hotels to get creative in maximizing their revenue. One of the simplest and most effective methods is in the age-old sales technique of upselling. From room upgrades, to additional services, and F&B, there are so many opportunities to upsell a guest and maximize your profit.
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Upselling vs. Cross-Selling
While, technically speaking, upselling is the process of driving more revenue from a better version of the same type of product i.e a room upgrade; and cross-selling is the process of driving additional revenue by offering additional, supplementary products or services such as F&B, merchandise or attraction tickets, we should look at both interchangeable, depending on the timing of the opportunity. Either way, we want to maximize not just RevPar and ADR, but overall revenue from each guest.
Benefits of Upselling
There are many benefits to upselling beyond the obvious of higher ADR and increased profitability.
- Better chance of shifting lower-tier perishable inventory
- For condo-tels, you can keep your larger units more occupied
- Increased customer loyalty and online reputation through increased satisfaction by providing more value and a more personalization experience
- Richer guest data for future targeting and personalization.
- Greater utilization of on-site amenities
- New, untapped revenue streams
Focus on Enhancing Your Guest’s Experience, Don’t Be a Used Car Salesman.
As travelers, we are primed to buy things. There are seldom times when our purse strings are more loose. Having said that, no one likes being sold to. It’s very important that you train your staff to approach upselling as a way to enhance the guest experience. The result of upselling is increased profit; however, the primary goal and focus should be on strengthening your relationship with the guest by enhancing their experience,
Upselling should occur throughout the guest’s journey
Don’t focus on just one specific time to upsell. Any time you have an interaction with a guest, over the phone, in person, or virtually via your website or an email, there’s an opportunity to upsell. Here’s why:
- Guests are often not aware of upgrade options, especially when the reservation was OTA or an business traveller’s assistant. Even if they book direct, perhaps, the phone reservationists may not have conveyed the upgrade options or their value
- The guest’s needs will constantly change Family vacationers, for example, may add people to their trip or may want to squeeze in an extra attraction before they leave.
- The travel lifecycle is full of micro-moments for decision making. Each time a guest is presented with a decision to spend money or not you may get a different answer. Their experience, their mood, the fact that they already paid perceive that they’ve paid for the stay, etc. All of these factors can influence their decision.
Timing and Message Matter. Since the purpose of upselling is to improve the guest’s experience then it has a place throughout the entire research, purchase and consumption life cycle, but what you upsell depends greatly on when you upsell.
- During the Online Research and Booking Process: The is often the first opportunity to upsell. Offering messaging that highlights the difference in price between a room and a suite, and shows the difference in price as opposed to the total price can be effective in getting people to select an upgraded room. Also, presenting additional services and/or package options can drive additional revenue. Just be careful not to decrease your overall conversion rate by offering too many add-ons or options.
- On the phone: your reservationists can have a large impact on your upselling endeavors. They key is for them to ask questions and find out about the guest and their specific needs. If they’re travelling with a family and looking at rooms, perhaps make the suggestion of a suite because of the separate bedrooms and additional space.
- Pre-arrival: Confirmation emails and other pre-stay emails can politely inform customers of relevant services, special offers or room upgrades to enhance their upcoming stay. The best part is that the guest has already committed themselves to your property and has already paid for the stay in their mind. This is a great time to really push messaging that focuses on the difference in price vs. the total price. I.e. ‘For only $20/night, get all this extra value.’. You can also promote savings by pre-ordering on things like breakfast, upgraded wi-fi, spa treatments, etc.
- During Check-in: Check-in is the most effective and opportune time to upsell. This is when the guest is beginning their stay and is most susceptible to helpful suggestions. Weary travelers often welcome the opportunity to upgrade their room or book a session at the spa.
- During the Stay: When guests are immersed in their stay experience, they are typically more open to opportunities to enhance it. During a guest’s stay, you can promote relevant services to them through interactions with hotel staff, email, in-room guest information books, and your mobile apps.
- During Check-out and Post-stay: This is often overlooked as an upsell opportunity. Upon check-out, invite the guest to join your loyalty program, get them to buy branded merchandise or souvenirs of their stay, or offer them a discount or free breakfast for their next stay. After they have checked out, post-stay emails thanking them for visiting can also promote return offers. Enticing customers to return with special offers helps strengthen the guest relationship, and the opportunity to upsell to them in the future.
What to upsell?
- Room upgrades
- Early Check-in
- Late Check-out
- Extended stay
- Food and Beverage/Meal Plan (especially breakfast)
- In-Room extras (bottle of wine, DVD rentals, in-room massages, etc.)
- On-site amenities (spa, bowling, game cards etc)
- Upgraded Wi-Fi
- Packages (Romance Package, Family Package, etc.)
Tips For Upselling
- Always offer multiple options: Don’t just offer the cheapest option, always give guests a menu to chose from. That way, they’re not deciding ‘yes’ or ‘no’, they’re deciding which one to pick.
- Personalize the upsell: When guests indicate price sensitivity by saying “what’s your cheapest rate?” use a “bottom-up” approach by mentioning the lower-rated option first, then referencing only the incremental difference for the next category such as “For only $25 more you will receive…”. Always make the guest feel like you have their best interest at heart. For example, if a guest is travelling with children, offer a larger unit and kid activities by saying something like, “Since you are travelling with your family, you may like…”. If it’s a couple, offer a romance package. Pay attention and think about what would be most appealing to each individual guest.
- Sell the value:. Be as specific as possible. Rather than saying “Deluxe rooms have a view,” say “In this room you can look out your window and see…” Rather than saying “The concierge floor has a lounge,” say “As a guest on this floor you’ll have 24-hour access to our executive lounge, which includes…” Rather than saying “This is a 600 square foot suite with a fully equipped kitchen,” say “Since you’re traveling with your family, you’ll love having all the extra space this suite provides. And the kitchen will be nice if you want to make breakfast or bring back take-out one evening.”
- Don’t make lower priced options sound undesirable: This is especially important when guests decline the upsell offer. Be sure to reinforce the positives of the lower-tiered rooms with statements such as “With this option you will still receive all the same amenities and services…” or “Although this room is a little smaller, it still has…”
- Utilize incremental sales techniques: In the mind of most travellers, they have already paid for their initial trip. While they didn’t want to pay the full amount for the king suite when they booked, they may be enticed when presented with the value proposition before or at check-in. “For only $25 more, I can offer you one of our upgraded rooms. In addition to what you have already booked, you would receive…”
- Present the availability of upgrades as a unique opportunity: by saying something like: “We’ve had some of our upgraded rooms open up this evening…” or “Congratulations, you have qualified for a discounted upgrade today…”. When doing this, it’s also a good idea to position the lower rate by mentioning a reference point and therefore increasing the perceived value. “These rooms are typically $300/night, but because of these special circumstances, I can offer you a special rate of $250/night.”
- Don’t be afraid to upsell. You will get 0% of the upsells that you don’t ask for.
- Train your staff – how, what and when you upsell is important and should be consistent
- Make it about guest satisfaction and the revenue will take care of itself
- Personalize the upselling process to your guest
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