With an increasing reliance on online travel agents (OTAs), the emergence of strong competition, and higher expectations from guests, a huge challenge for hotels is maintaining their profitability.
One of the best ways to boost revenue and get more value for the business out of each customer is by employing upselling, and cross-selling, strategies.
Upselling is the process of selling a more expensive version of the service or product your customer is buying, while cross-selling is the process of selling an additional, supplementary product or service to complement the product or service your customer is buying.
It will allow you to make better use of your hotel’s amenities and products, and increase the level of personalisation your hotel extends to guests.
However there are other reasons to upsell and many ways you can do it.
What’s the primary goal of upselling?
If you answered ‘to make more money for my hotel’ you’ve started off on the wrong track. Any action you take at your hotel should benefit the guest first and foremost. If you can increase guest satisfaction, positive reviews and build closer relationships, more revenue will naturally follow.
You need to think about the long-term benefits upselling will have on your business. Taking a customer-first approach will serve to enhance your brand reputation, persuading guests to be more loyal as they grow to trust you have more than your bottom line in mind.
Taking a customer-first approach will serve to enhance your brand reputation
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How should you communicate your upselling offers?
The methods you use to upsell need to be handled with a degree of delicacy. The timing, tone, and regularity with which you upsell is vital to the success of your efforts.
You don’t want to seem pushy so treat it as an exercise in awareness rather than a sales pitch. Make sure guests know what options are available to them but let them initiate any further interest.
Be specific and incremental. For example, you might say “For only $30 more you can get a room where you’ll see…” This will work better than quoting the full price and saying the room has a view.
You should also try to profile your guests and only look to upsell or cross-sell things that are likely to be of interest to them. More than 60% of consumers would be open to spending more if an additional service complements or enhances their main purchase.
A good way to do this is to send an email prior to their arrival enquiring about any preferences or requests they may have.
What should you upsell?
There won’t be a shortage of options to offer guests at your hotel. Consider the following key areas where you should be upselling:
Food and beverage
Encourage guests to begin their stay on a relaxed footing with a drink at the bar, celebrate any special occasions with banquet deals, add fruit and chocolate or other extras to their room, or order dessert after a main meal. Always present as many options as possible so guests are making their own choice rather than just following your recommendation.
If guests have taken a long flight or arrived late, invite them to add a spa package to their stay, with a massage on their first day and the opportunity to book more treatments throughout their time at your hotel.
This shapes as the obvious tactic and it can often work when executed well. When travellers book a trip they’re saving money for the occasion. If a guest has booked a standard room, you can contact them in the days prior to their arrival and offer an upgrade. They may be surprised by the offer and the extra price will seem smaller, especially since they will have their finances in good order by this stage.
Special features in the room
Pay attention to who is coming to stay at your hotel. If a family has booked, it will be important for them to have a bathtub for the children. This presents a good opportunity to upsell or cross-sell a room that has this facility. Other examples might include upselling couples to rooms with a balcony or a larger bed.
Exclusive guest offers
Anything that helps create a more memorable experience for your guests will receive a favourable response, such as breakfast in bed, fresh flower bouquets, champagne etc. Even though the guest has to pay extra, it will be a worthwhile expense from their perspective.
Renting and selling things to do like riding bicycles, use of the tennis courts, gym, sauna, cinema tickets, and city tours is usually a no-brainer and not hard to get guests excited about.
Upselling best practices
When it comes to upselling there a few things you definitely should do and some you definitely shouldn’t. Keep these three tips in mind when developing your strategy:
1. Upsell throughout the guest cycle
Upselling doesn’t have to occur prior or during arrival. During the stay guests will become immersed in their experience and may be more likely to accept your offers. Even when they’re checking out you can ask them to join your loyalty program or purchase an option for their next stay.
2. Use the right hotel technology
3. Educate your property’s staff
Let your staff experience everything you want them to sell so they can adequately explain it to the guest. It’s also important that they be prepared for objections or rejections. Awkward or difficult questions need to be responded to in a calm manner. If a customer rejects an offer, don’t chase the sale. Offer an alternative or raise it again at another time.
Good upselling will increase guest satisfaction and by extension provide your hotel with higher revenue and profitability.