Strategically upselling hotel rooms to boost revenue

Like all businesses, hotels and rentals exist to meet a need and generate revenue. Deploy the right strategy, which starts with pricing and revenue management, and you’ll make a profit; get it wrong and you’ll go out of business.

But profit comes in different shapes and sizes, is generated by different means, and the revenue and effort associated with it serve more than one purpose.

If you’ve cracked the most effective way to boost occupancy at the best price, the next step is upselling: the practice of selling additional goods and services that complement and improve the guest experience.

Effective upselling strategies enhance experiences, is tailored to the guest and doesn’t feel like a hard sell. Importantly, it should be conducted over the lifecycle of that guest and increase their likelihood of rebooking.

Let’s break down the strategy.

Promote add-ons during the discovery and booking phase

No one wants to feel pressured into making a purchase. But once a guest has cookies on their machine and has handed over their contact details as part of the booking transaction, there’s no harm in gently exploiting the exposure effect by subtly making them aware of add-ons that could improve their stay.

If they pre-order, that’s a bonus; the expectation is that it makes them more likely to buy when they check in or at some point during the rest of their stay.

And this digital activity can start before they’re booked; soft-sell references to what travelers can buy at your hotel beyond the basics can aid the discovery phase and make them more likely to choose your property, even if they delay making additional purchases.

Whether you’re a well-established chain or a small independent property, it’s all about going above and beyond, and creating a positive impression in comparison to your compset.

As a hotelier, you’ll have your own ideas as to what’s enticing specifically at this stage of a guest’s journey but here’s a non-exhaustive list of some of the potential add-ons you could offer:

• An airport shuttle or other transport from other hubs, or travel to and from tourist hotspots in your city

• Valet parking for those with their own transport

• Spa packages

• A welcome drink

• A round of golf

• Breakfast or breakfast add-ons

• Paid room upgrades - such as a sea view

• Early check-in and late check-out

Showcase additional services on booking pages or OTAs

We’ve discussed emails and online ads that capitalize on contact details and cookies. Social media also works. But don’t underestimate the importance of optimizing your website so that you put yourself in the best light when guests are proactively exploring it.

Do an audit of the value-added services you offer guests and then consider on which pages they would best be showcased. They can appear on more than one and the message can be tailored for the page, both in terms of the message and where it appears on that page. 

Take a look at the list in the previous section; for instance, transportation offers are clearly much better places on your ‘how to find us’ page than on pages relating to your restaurant.

If you have a sophisticated marketing automation system that derives insight from smart data-capture in your property management system (PMS), you can also tailor your content to your guest and what you know about them. 

A promotion for your gym, for example, is likely to appeal more to a 30-year-old than someone in their 90s. (90-year-olds aren’t excluded, of course; it’s just about maximizing likely sales.)

But you control the guest data you want to capture and it’s down to you to derive insights and actions.

A note on pop-ups: these are fine but use them sparingly and avoid triggering them straight away. Picture your website as your check-in desk; you might upsell in person but you’d be unwise to lead with it.

Recommend rooms with bigger beds, better views, and more

What’s the number one thing a guest needs, without which there’d be no booking? It’s a room. So provide the option of upgrades, such as:

• A king-sized bed rather king-size beds (instead of queens or full-size) – have fun with the language you use to sell it

• An enhanced mini-bar or other in-room extras

• Better views: this Hyatt property, for example, offers mountain views from its downtown Denver location, while this historic New Orleans hotel has suites with antique furniture for guests that want to experience a bit more of the city’s culture

Not only do the possibility of room upgrades make bookings more likely, the additional revenue they generate is enormous. Estimates vary, but an uplift of more than 40% is considered typical. What hotel revenue manager would say no to that?

As long as users can easily find information on what they were looking for, i.e. a standard room, then including promotional information about higher-tier rooms alongside it on webpages and in emails is absolutely fine. 

In fact, it makes sense: if guests can immediately see how much more they’ll get for a competitively priced additional charge, they might bite.

Offer a virtual tour of rooms at your hotel

If a picture paints a thousand words, how much verbiage can be saved by offering a virtual video tour like this one? What better way is there to provide your guests with a better understanding of how add-ons could improve their experience?

When investing in the production of these, work with an expert external provider and map out what you want to cover and why. A successful tour:

• Sells a dream rather than something more concrete

• Let’s the room speak for itself

• Makes good use of color, light and relaxing music

Advise readers on how to create a successful virtual tour. Provide 1-3 real-world examples that illustrate what a successful virtual tour looks like and highlight why each example is effective

Happy with your tours? Great. Then upload them to your website but don’t forget channels like YouTune too, as exploited by this property in Saint Lucia.

Remind guests about value adds before they check-in

Sales is as much about psychology as it is economics, perhaps more so. This is no less for the hotel industry than any other.

If a guest didn’t bite on your offers when booking their room, remember that the basic cost of their room was front of mind. If a few weeks or months have passed, they’ll have come to terms with their bank balance and might well be more amenable to spending more to improve their stay. Time is a great healer.

Not only that but some of the associated costs they predicted, such as travel, might have been over-estimates. So they might feel more flush.

Whatever the reason, the immediate pre-arrival period is an optimal time to swoop in.

Send text or email reminders

Don’t leave any of this to chance, Set up workflows that automate the sending of text messages and emails immediately ahead of arrivals. 

These complement any upselling messages you include in your confirmation emails and other reminders, and even if guests don’t go ahead and add upgrades to their reservation there and then, this is a further example of the exposure effect and will soften them when they check in.

Incorporating talk of add-ons is an important but secondary message in these communications, so avoid being too in-your-face. But do consider adding a button that makes it easy to navigate from email to the website, where guests can choose add-ons. Or provide the phone number through which they can contact your concierge to update.

Important! Don’t forget to use the data you’ve gathered on platforms such as your customer relationship management system (CRM) to personalize suggested add-ons and the language you use to promote them.

Present welcome packages and other special offers

Welcome packages and other special offers provide a great way to position upsell offers to hotel guests representing ready-made segments. Just think of how many audiences you could cater for, including:

• Honeymooners and other couples – see this hotel’s ‘bubbles and truffles’ add-on, for example

• Bachelor(ette) parties

• Business travelers, who can expense some of their extras

To promote these packages, start by building an easy-to-find page on your website that offers an overview of your packages and an easy route to book.

You can follow this up by sending personalized notifications to guests after booking. 

For example, if guests note that they’re traveling for business you could send them an email about a business package that includes complimentary coffee from a local shop, or if guests note that they’re celebrating a special occasion on their trip you could let them know about a service that ensures champagne is chilling on ice in the room when they arrive.

As you can see, the theme of data continues to permeate our advice, so think smart when designing your route to booking so you can gather what you need to target guests with upselling techniques.

Use customer service as an opportunity to upsell

As we said from the outset, upselling is about the whole lifecycle of your guest. If you don’t hook them in when they book or in the lead-up to their stay, there’s still all to play for – particularly when people, rather than digital messages, are involved.

Customer service points provide a perfect opportunity to upsell, as well as cementing customer satisfaction.

Establish a warm human connection through great customer service, sincere chat and a winning smile, and who wouldn’t be more susceptible to buying a few extras?

This boils down to two aspects of customer service:

• Training hotel staff on what your offers are, who it’s appropriate to pitch them to and when, in a way that doesn’t constitute too hard a sell

• Promoting friendliness and helpfulness that increase guest satisfaction and put them in the best possible frame of mind – things that will in any case pay dividends in terms of future visits and reviews on aggregator sites even if you fail on the upsell

Gauge guests’ interest in add-ons during check-in

No time is better to put the above into practice than at check-in.

This is when guests are confirming the price they booked their room for and putting a credit card on file.

Check-in staff can routinely ask if the guest would like to consider a room upgrade when they arrive. It needn’t be a hard-sell; just a short line about how much extra it costs and what benefits it brings. And tell the guest that they can upgrade at any point in their stay.

This is also the time to mention other types of upgrades, such as room service and different meals.

As a matter of course, you can also leave a voicemail on the hotel-room phone welcoming your guests and encouraging them to reach out if they’re interested in any upgrades.

Strive for transparency. It will damage your reputation if a guest thinks you’ve tricked them into signing up for something that they thought was complimentary.

Keep an eye out for upselling opportunities throughout guests’ stay

Once again, don’t forget the whole lifecycle of the guest, a big chunk of which is the duration of their stay.

So train the staff to listen out for conversational cues in any guest interactions, such as ask questions at the concierge desk or if they call the front desk for assistance.

See every interaction as a possible segue into a highly targeted soft-sell – but this will only work if everyone at your hotel knows what’s on offer and they listen attentively to your guests.

Draw on data to better understand your guests and improve hotel upselling

We’ve talked about the lifecycle of your guests but equally important and feeding into that is the lifecycle of your data, or rather the workflows and activities that are informed by it.

Data and the software that enable you to derive actionable insights are the lifeblood of all successful businesses these days, and hotels – which need insights into forecasting, demand, competitor pricing, performance metrics, you name it – are no exception.

So, while you’re busy gathering data to aid your upselling and recording your successes, don’t forget to periodically refine future iterations of this ongoing data lifecycle for ever greater upselling opportunities.