Increasing incremental revenue is more than a “want” – it is a “need” that creates a competitive advantage in premier hotels and resorts around the world. The biggest source of these new revenue streams is found upgrading rooms for a premium at the moment of arrival. Moreover, a well-designed upgrade program should pay for itself, adding at least 75% flow through to the bottom-line and directly increasing REVPAR and ADR.
Based on our research of successful upgrade programs in over 30 countries, here are three key components of excellence and profitability.
Build an upgrade process
First, the most successful properties build an “upgrade” process with a daily game plan that optimizes every arrival – because every upgrade counts. Properties should know exactly what the value of one upgrade per day means to the property annually. Of course this means getting the right reporting in place because you cannot manage something that is not measured properly.
So what are key upgrade program metrics to track for continuous improvement at your property? The two most important are average number of upgrades per day and the average upgrade value. These two are the foundations for continuous improvement over the years.
Create the chance to say “yes”
Second, create chances for guests to say, “yes,” by asking every appropriate guest appropriately. Research shows romantic couples love a chance to experience a suite, a guaranteed late checkout, and in-room dining credits. Families with two or more children really appreciate extra space and especially a family-friendly connecting room special. Business guests want convenience and efficiency, whether that’s parking, Wi-Fi, meeting space, or even cocktails in the Executive Lounge at the end of the day – all of which can turn a dreary overnight into a world class experience that will increase both your bottom line and their intent to return.
As Wayne Gretzky said, “You miss every shot you don’t take.” Now, it’s difficult for individual associates to make up proper language on their own, and even if they could, there would be no brand consistency. So, to avoid rogue language that can lead to pushy “upselling” tactics, we recommend you script the offers and make it easy for people to suggest choices nicely. We keep the wording short and integrate it with non-verbal cues, making it easy to learn and easy to remember.
Set goals and incentives
Third and finally, the “secret sauce” of any upgrade program is to develop well-formed revenue goals for your property that are connected to performance-based incentives for your associates. We recommend individual incentive structures that are tiered higher to motivate people toward peak performance. Excellence is recognized and rewarded!
We also recommend customized team incentives that will drive all-up department goals and foster inter-departmental teamwork. Consider including key staff in Housekeeping, Rooms Control, and Club/Concierge Level associates that normally never participate in the incentives but have to deliver on the service promise you are making at the front desk.
Don’t worry about paying a little more because increasing the pie means you can share more and bigger slices with deserving staff members across the property. In fact, designed properly, this is the only program we know where the more you pay your associates, the more revenue you take to the bottom line! More is more – for all!
About the authors
Josh Beil is Senior VP – Marketing, Research & Technology for Drake Beil and Associates, LLC – one of the world’s premier hotel and resort “Upgrade” consulting firms. Dana Beil is VP – Training and Development for DB&A – the firm serves hundreds of clients in over 30 countries based in Honolulu, Hawaii since 1980. DB&A customizes “Service Excellence Upgrade Programs” for luxury hotels and resorts in Rooms, Spa, F&B, Golf, Retail, and Sales revenue channels. If you are interested in learning more, contact them for a complimentary revenue assessment for your property or portfolio. Visit www.drakebeil.com or email: [email protected].