Why upselling is important for hotels - Insights
Insights

Why upselling is important for hotels

upselling in hotelsWhile upselling often gets touted as a great way to boost revenue and the guest experience, its importance goes way beyond that. 

It’s a way for you to get the biggest return on your cost of acquisition all while providing travellers with an unforgettable stay. The icing on the cake is that upselling makes delighting your guests with personalised service almost effortless. 

Keep reading to discover upselling strategies you can use to generate more revenue from your existing guests. 

What is upselling?

In the hospitality industry, upselling describes a sales technique where hotels propose a higher room category, accommodation with certain features or a more expensive version of a service guests have already requested. Cross-selling is a similar discipline where staff offer travellers add-ons that complement what they’ve booked. That can include extras like a bottle of champagne in the room, airport pick-up or a spa package. 

If you do it well, upselling and cross-selling are great for travellers and your hotel. Guests can perfectly personalise their stay while you boost your income. 

To keep things simple, ‘upselling’ will cover both approaches in this article. 

Five ways hotels benefit from upselling

Now that you know what upselling is, here are the five top benefits your hotel can experience from it. 

1. An improved stay experience

Cookie-cutter stays aren’t’ enough anymore today. Customisation has become part of everyday life and appears everywhere from online retail to social media algorithms. That’s why travellers also expect a high degree of personalisation on their trips. Upsells and extra services that match their desires allow you to provide this degree of customisation. 

2. Better knowledge of your main target markets

Look at the deals your guests book most often to better understand their interests, needs, and desires. This will show you what they’re happy to pay extra for and can give you ideas for new upsell offers they’ll love. Of course, you’ll also see what doesn’t work with your audience. Refresh those offers to make them more appealing or shelve them. 

3. Lifted incremental revenue

Targeted and well-executed upselling can significantly increase your ancillary revenue. Data shows that using an automated upselling solution can boost your average guest spend by up to €250, depending on the type of property and its upselling potential

4. Stronger brand reputation

Upselling offers that your guests enjoy can bring you more five-star reviews. That boosts your online reputation and shows you provide the outstanding stay your promise.

But upselling is also a way to share your values. A sustainability-focused deal like opt-out housekeeping or planting trees for every stay highlights your dedication to greener operations. 

Finally, upselling is a chance to expose your guests to your brand. When you send them offers, be sure that the message reflects your branding by using your usual fonts, colour scheme, tone of voice, and overall style. 

5. Setting yourself apart from the competition

The more you can personalise your services, the more your property will stand out. Guests who loved their stay will share their positive feedback with friends and on review sites. This will boost your ranking, get more eyeballs on your hotel and increase travellers’ willingness to pay. Finally, it increases the chances of first-time bookers becoming regulars. 

Inspiration for upselling offers at your hotel

Now that you know of upselling’s many benefits, here are some ideas for deals to try at your hotel.

Paid room upgrades

This is the classic upsell offer which includes proposing a higher room category for the applicable supplement. Apply dynamic pricing to your rates to maximise your revenue here, boost conversions and get a chance to resell base category rooms

Food and beverage deals

Increase travellers’ in-house spend with F&B deals like breakfast, lunch, or dinner add-ons. Spice things up with special offers like set menus at advantageous rates or unique dining experiences in an uncommon location (e.g. on the rooftop, at the spa, or beach).

Spa and wellness-related offers

Since the pandemic, many people have become more conscious of their physical and mental health. That’s why health and wellness-related deals like massages, yoga classes, or a full-day package do especially well today. 

In-room extras

Small extras can go a long way in terms of creating a fantastic experience. Think about what your guests may enjoy finding in the room and offer it as a paid add-on. This could be a fruit plate, a bottle of champagne, or balloons for a birthday. 

Activities

Activities are a fantastic way to engage your guests and help them create more memorable moments. Start with things you do at your hotel like a cooking or cocktail making class. Then look outside at locally themed deals that work for your target market. That could include a wine tasting at a local vineyard or a surfing class. Look around for partners who want to work together on these offers, and you’ll even get a chance to support local businesses. 

The five easiest upsells you can implement today

If you’re still new to upselling, some of the above ideas may feel like a bit much. In that case, start with some (or all) of the five easy upsells below.

  1. Room upgrades: all you need to do is set your supplement and you can get started. 
  2. Early check-in and late check-out: this adds extra convenience for travellers and is hugely popular.
  3. Stay extensions: offer these at a slight discount on shoulder days to fill rooms that would otherwise go unsold on low-demand days.
  4. Discounted rates for food and beverages: these promotions can increase your F&B venues’ capture rate and, when done correctly, encourage guests to spend more once they’re at your outlets. 
  5. Opt-out housekeeping: reduce the pressure on your housekeeping team and save precious resources by allowing guests to opt out of housekeeping. You can even offer a reward (e.g. a drink at the bar) for those who skip daily cleaning. 

How to introduce upselling at your hotel

Once you’ve picked the upsells you want to offer, follow these five steps to get going. 

1. Define your target guest

Look at the various types of guests you’re targeting and think about what they would enjoy during their stay. This can be quite different depending on the type of guest, so it’s important to have a few highly relevant offers specifically for each target market. A few examples of guest types include families with children, couples, digital nomads, and business travellers. They all have specific needs and preferences. Analyse their booking and consumption behaviour to understand which deals will best serve them. 

2. Use segmentation for the best guest experience

Once you’ve created targeted deals for your different types of guests, use your PMS data to make sure travellers only see the most relevant offers. For example, a solo business traveller will be more interested in airport pick-up or flexible arrival/departure times than a baby cot or a romantic dinner. Check your rate codes as well. If a guest’s booking already includes a certain service, there’s no need to offer it again as an upsell. That would only cause confusion and mar their experience. 

3. Get your whole team on board

Involve your whole team when you’re coming up with upsell offers and thinking of ways to implement them. Ask them for their ideas, input on cost and feasibility. That way you’ll end up with offers that work for everyone and don’t upset operations. Finally, let your staff benefit from your upselling initiative’s success by sharing part of the proceeds. 

4. Upsell at the right time

Data shows that pre-arrival beats on-arrival upselling by a long shot. But even if you upsell prior to a guest’s stay, there’s an optimal time. Data suggests that one message twelve days out and another one a few days later leads to the best results of up to 48% click-through and conversion rates of up to 12%. 

5. Suggest the right number of offers

Avoid making guests feel overwhelmed by too many offers. Use segmentation to narrow down how many deals they see. Data shows that between 10-15 upsells is ideal. They should include a few classics such as paid upgrades and breakfast as well as a few special offers relevant to the guest segment. 

6. Use upselling technology for the best results

Applying all the ideas outlined above can take massive amounts of time and still only yields limited resources because it’s not scalable. For the best outcome for your staff, top line, and guests, implement an automated upselling platform that does the heavy lifting for you. 

All you need to do is set up your offers, add segmentation details and you’re good to go. Look for a system that offers two-way integration with your PMS and all data regarding deals sold and remaining availability will flow without your staff having to lift a finger. 

Now that you’ve learned about the role upselling plays for hotels, it’s your turn to get to work. Put together deals your guests will love and watch your ancillary revenue grow. 

 

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Marieke Wisse
Head of Marketing

Marieke is Head of Marketing at Oaky. An international, strategic marketing leader, brand builder and skilled photographer, her expertise lies in driving lead generation and creating high quality content. Passionate about design, creating strong teams…

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Oaky is a hyper-personalised upselling software that helps hotels boost revenue through enriched guest experience and branding.

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