In the hotel industry, upselling is a technique that aims to sell upgrades on bookings or reservations, by encouraging guests to opt for superior services or higher rates. Upselling is one of the best ways for a hotel to increase profits, and it shouldn’t be confused with cross-selling, another technique that has the scope to boost revenues, but selling complementary products and services.
Benefits of upselling in hotels
There are multiple benefits for every hotel to practice upselling techniques in their daily operations, here are our top reasons why you should be:
Helps to understand your guests better
Every interaction with your clients starts with a dialogue and every attempt to upsell pushes you to listen to your customer’s voice. Understanding your audience improves their experience and facilitates customer retention.
It increases customer’s satisfaction
Upselling is a great way for you to showcase your services and product range, offering more options to your customers, who might not be aware of upgrading options or simply might have had other needs coming up since they made their reservation.
Boosts your revenue
Effective upselling can give you extra revenue streams. Choosing the right distribution partner, like Hotelbeds, can give you access to international guests that are more likely to upgrade their booking as they tend to spend more in a destination.
Did you know that:
Hotelbeds guests are spending twice as much as the guests coming from alternative booking channels? Check out our page on market segmentation to target the most profitable guests for your hotel.
Upselling as a resource to survive crises and unpredictable situations
During crises and other situations that could potentially freeze the travel industry, many hoteliers will have to face the consequences of lower occupancy rates and booking cancellations. Putting in place successful upselling strategies can be a great resource to increase your revenue per booking, and mitigate losses. Extra packages and upgrades for current guests, as well as offers or for future stays, are common upselling techniques used in these situations
Hotel services and products to upsell
The potential of products and services each hotel can offer depends obviously on their inventory. Some common examples of upselling in hotels include:
Room upgrades & Rooms with special features
Bigger rooms, suites, or rooms featuring panoramic views, terraces, whirlpools, saunas or kitchens.
Additional Rooms at a discount rate
It can be an option for families or groups of people sharing rooms.
To facilitate the logistics of late departures, such as evening or late afternoon flights.
Prolonged stay at a discount rate
It can be an incentive for guests to evaluate the option of extending their stay.
Did you know that:
40% of all Hotelbeds bookings will stay for at least 6 days?
Find out more about Hotelbeds and join our network!
Upselling techniques for hotels
The success of upselling techniques depends on multiple variables: you will need to be sure to propose the right product or service, at the right time, in the right way.
Now that we have defined what services and products are a fit for upselling, let’s deep dive into some of the most common techniques hoteliers can use to upsell, to cover the when and the how:
When to upsell
Upselling opportunities before the arrival
The time between a reservation and the customer’s arrival at the hotel is ideal for the following techniques:
Limited time opportunity offer
Allows hoteliers to showcase upgrade options as special/exceptional opportunities.
Check for awareness of premium options
Using the: “Did you know that…” or “ Are you aware of …” formulas, making sure to use positive language that won’t undermine the option your guest has chosen.
Opportunities at the moment of the guest’s arrival
Upsell for early-paid bookings
When payments have already been made in the past, it is easier to leverage on the comparison between the whole price, and the upgrade cost: “ with only 20% more you can upgrade to…”
Upsell for early arrivals
A guest arriving earlier than the check-in time might catch your hotel off-guard, and their room might not be ready: this could be a great opportunity to offer a room upgrade to a suite or just a bigger room as an alternative solution, providing immediate accommodation!
How to upsell
- Use market segmentation to know which guest you can target.
Knowing your target audience is a crucial step in every up-selling process. Offering upgrades to the wrong guests can have negative effects on their experience.
- Aim to improve the customer experience over increasing your revenues.
Customers can get annoyed by aggressive upselling techniques. Focus on offering solutions rather than increasing your profits.
- Present every upsell opportunity as an option.
Pushing hard doesn’t always work, that’s why it’s crucial to showcase upgrade offers as choices.
- Use a cautious and balanced pricing strategy.
Price is always one of the biggest factors in a customer’s choice. Take into consideration the initial price of a purchase, and make sure that the upgrade feels like a great offer rather than a big increase.
- Try to offer multiple upselling options.
Presenting a wide range of options with different price points can be beneficial for every up-selling strategy.
- Focus on training your staff for front-desk up-selling
Make sure that all the members of your hotel are on the same page. Training every customer-facing staff member to spot up-selling opportunities, and to approach the guests with the right tone, at the right time, will be a key advantage.
Three guest-types for your upselling strategies
The analysis of your guest’s character traits will be crucial for the success of your hotel’s upselling strategy. Taking into account all the variables already mentioned, there are three main categories of guests that can be the ideal target for your upselling strategy:
They can be willing to upgrade their experience as guests with bigger and more comfortable rooms, or panoramic views and other features that can help to improve their stay.
Families with children
Bigger spaces, additional rooms, as well as other special features, can encourage parents to opt for upgrades.
They are a great potential for upselling strategies as they are often less price-sensitive, and are looking to improve and smoothen their stay.
Find out more
To deep dive on how different channel distribution strategies can improve your hotel’s performance, check out the Hotelbeds guide to hotel distribution in 2020.