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A Step-by-Step Guide to Hotel Upselling

Unleash the power of personalized upselling to dramatically boost your hotel's profitability and enhance guest satisfaction. Discover how leveraging the right technology like Duve can transform upsells from mere transactions to memorable experiences, driving significant revenue growth with minimal effort.

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Jordan Hollander in Revenue Management

Last updated February 13, 2023

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The hospitality industry isn’t immune to inflation, recession or pandemics.  For the last 5 years, hoteliers everywhere have been searching for creative ways to boost revenue amidst challenging conditions and more recently to offset rising costs and inflation pressures.

Upselling is a great way for hoteliers to generate incremental dollars by selling add-on products while also improving the guest experience, strengthening relationships with hotel guests and most importantly driving improved profitability. The secret sauce of upselling (or as some call it, cross-selling) is, like in effective revenue management, offering the right upsell option to the the right guest at the right time through the right channel.

This means the traditional approach of simply offering room upgrades at the front desk isn’t going to cut it. With a technology partner, such as Duve, and a solid upselling strategy, you can boost topline revenue even with a tight budget and a busy front office team. In this article, we’ll walk you through the steps to build and launch an upselling strategy that will delight guests and help your hotel reach its business goals.

Offer the right upsell options

Before we get into timing and targeting, the first step in crafting your upselling plan is to choose a variety of compelling upsell options and creating a list of ancillary services you could sell. You might be wondering: what’s a compelling upsell option for my guests? Drawing on research conducted by upsell technology pioneer Duve, your best bet is to offer one of these highly valued amenities:

  • Early check-in
  • Late checkout
  • Transportation services or transfers
  • Parking
  • Tickets or tours
  • Room upgrades
  • Amenities (e.g. bottle of wine)

In addition to these options, hotels find success offering spa services, room service, and celebratory packages for holidays, birthdays, anniversaries, and honeymoons. Vacation rentals can also upsell effectively with offers for mid-stay cleaning services, pet fees, in-person welcome service, and grocery shopping.

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THE PITCH
RATINGS BEST FOR
96 HT Score
Hotel Tech Score is a composite ranking comprising of key signals such as: user satisfaction, review quantity, review recency, and vendor submitted information to help buyers better understand their products.
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Personalize your upsell offerings to instantly maximize the potential revenue that you generate from each guest. By integrating with numerous PSP’s, your guests can easily select and pay for upsells from their personal devices.
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Duve Upselling Upselling Software
THE PITCH
RATINGS
96 HT Score
Personalize your upsell offerings to instantly maximize the potential revenue that you generate from each guest. By integrating with numerous PSP’s, your guests can easily select and pay for upsells from their personal devices.
Learn More

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Target the right guests

Compiling a list of potential upsell offers is only one piece of the puzzle. You must next match those upsell offers to the types of guests who are most likely to purchase them. The key to unlocking personalized upsell offers is to dive into your guest data. For example, if you know a guest is part of a conference room block and traveling alone, then a honeymoon or anniversary amenity is probably not relevant to them. Similarly, guests who entered their late-night arrival flight details when they made their reservation are probably not interested in purchasing early check-in. Leveraging data you already have – or collecting more data about your guests for this purpose – will help you craft compelling upsell offers that are likely to convert.

Like many strategies, you can only truly determine what upsell strategies work by testing them in the wild. The best practice is to offer several choices for upsells; over time, you can figure out which segments of guests are most likely to purchase which upsell options. Over time, you might find that business travelers are more likely to purchase a late checkout or that families are more likely to pre-pay for room service credits. You can apply these learnings to further personalize the upsell options you offer to future guests. A solid technology solution can do much of this heavy lifting for you by extracting segmentation data from your property management system (PMS). Duve, for example, will automatically serve customized upsell offers to guests based on their preferences.

 

 

Duve makes it easy to target different personas with personalized offers

 

Time upsell offers appropriately

The amenities and services you offer to guests aren’t the only important components of the upselling process. Optimal timing is another critical piece of your upselling strategy. You have a couple opportunities to serve upsell offers to your guests:

  • At booking: By serving upsell offers on your website and booking engine, you can capture guests while they’re booking their reservation. 
  • Pre-stay/pre-arrival: The time period between booking and arrival is another prime opportunity to secure upsells and build relationships with your guests. During this time, guests are likely planning their trips and can be receptive to upsell offers for tickets, transportation, and room upgrades.
  • Check-in: Shortly before check-in is another chance to serve upsell offers. Guests might be more willing to purchase an early check-in or parking because by now their plans are solidified.  When using upselling software, contactless check-in solutions like Duve automatically create a moment of purchase on your guest’s mobile device without needing to turn your front desk agent into a pushy salesman.
  • Mid-stay/pre-departure: It’s not too late to secure a few incremental dollars by offering late check-out, room service, or spa treatments on the guest’s day of departure. If a guest has a late flight, spending a few hours after checkout in your spa or restaurant can be a convenient use of time that they might not have thought of.

Although it’s not technically considered an upsell, you can use the few days after checkout to send promotions or special discounts to guests who book their next stay with you.

Implement technology to upsell across channels

All of these upselling tips sound great, but how can you make them a reality at your hotel or vacation rental? Partnering with the right technology vendor can enable endless upselling opportunities while keeping the workload light for you and your team. A system like Duve automates much of the upselling process: you enter the inputs, like which upsell options you can provide and how much you want to charge, and the system takes care of serving the offers to the right guests at the right time. Such a system can also handle multiple communication channels, like offering upsells via email, Whatsapp, SMS or  a mobile app.

 

 

While traditional upselling was only done in person, during check-in, at your front desk, technology that specializes in upsells can empower your guests to purchase upgrades at the right time, via their preferred method, from anywhere – giving you incremental revenue and building loyalty.

Effective upselling can have an outsized impact on your business even with seemingly small numbers.  Imagine you run a 100 room hotel with 70% occupancy and $150 ADR.  Monthly revenue is $315,000 and your hotel runs at 25% net operating margins or approximately $78,000 in profit each month.  Now imagine that 1 in 5 guests simply upgrades to a room type that costs $50 more per night.  That upsell revenue is $21,000/month at a 100% margin meaning your hotel’s profitability increases by 27% which is massive.  Your hotel’s net operating margin just jumped from 25% to 31% all while improving each guest’s stay.

By moving booked guests into higher priced hotel rooms, your property also frees up cheaper rooms for transient short booking window travelers which can increase occupancy and this isn’t even factored above.

Everyone in the hotel industry knows that hotel upselling software is a critical part of every guest journey because it can not only increase guest satisfaction but also drives sales of additional services and costs very little both in terms of both money and time to implement/operate.  It’s hard to understand why every hotel doesn’t have upsell software at this point - what are you waiting for?

 

This article was created collaboratively by Duve and HotelTechReport.

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Jordan Hollander
CEO @ HotelTechReport Linkedin profile
Jordan is the co-founder of HotelTechReport, the hotel industry's app store where millions of professionals discover tech tools to transform their businesses. He was previously on the Global Partnerships team at Starwood Hotels & Resorts. Prior to his work with SPG, Jordan was Director of Business Development at MWT Hospitality and an equity analyst at Wells Capital Management. Jordan received his MBA from Northwestern’s Kellogg School of Management where he was a Zell Global Entrepreneurship Scholar and a Pritzker Group Venture Fellow.