Even with the lodging industry starting to rebound, most hotels these days could still use another revenue source, especially one that is generated with relatively little effort and cost. Yet many still overlook the opportunity to upsell guests to higher-priced options. With a little planning and effort, properties can easily turn-on the faucet to this revenue stream and reap the benefits immediately.
While upsell opportunities vary greatly according to a hotel’s inventory of accommodations, most all properties have some potential to upsell guests to:
– Special room types, such as junior suites, one bedroom suites, suites with special features such as whirlpool baths.
- Preferred views and resort locations.
- Special “exclusive” floors such concierge or executive level floors.
– Packages that include additional amenities, services, or activities.
There are generally two opportunities for upselling, with the most obvious being the chance to upsell in advance during reservations inquires. Increasingly these days it seems the best opportunity to upsell occurs during the registration because:
* Guests may not be aware of upgraded options, especially when the reservation was made by third party such as a travel agent, administrative assistant, or function planner.
* Voice reservations agents may have failed to convey the value of the upgraded options, or worse yet, failed to mention them at all.
* The guest’s needs might change while en route. Business travelers, for example, might have pop-up meetings or projects to work on, requiring additional workspace in their rom.
* The impulse of the moment might cause guests to be more receptive to upgraded options, especially after a stressful day of travel. For example, when mom and dad were planning the trip it seemed like a good idea to share a room with the two kids, since “all we’re going to do is sleep there anyway.” Yet after 8 hours in the minivan the adjoining room or suite starts looking like a great option.
Strategies And Tactics For Upselling
Whether upselling over the telephone or at registration, here are some strategies that your staff can use to optimize profits from this revenue stream:
When Upselling Over The Telephone:
Always offer a menu of options.
Whether starting from the top and working down, or using a bottom-up approach, the key is to always give guests a menu to chose from. Remember that if you don’t mention these options, they effectively don’t exist for the guest.
Adjust your upsell method according to clues provided.
When guests indicate price sensitivity by saying “what’s your cheapest rate?” use a “bottom-up” approach by mentioning the lower-rated option first, then referencing only the incremental difference for the next category such as “For only $25 more you will receive…” When callers convey a urgency and no price sensitivity, such as by saying “Hi, I want to make a reservation…,” use a top-down approach to mention the higher-rated categories first. With this method you can drop-down to the lower categories if necessary; just be sure to reinforce that even the lower-rated accommodations are still a good value.
Demonstrate the value received.
Be as specific as possible. Rather than saying “Deluxe rooms have a view,” say “In this room you can look out your window and see…” Rather than saying “The concierge floor has a lounge,” say “As a guest on this floor you’ll have 24-hour access to our executive lounge, which includes…” Rather than saying “This is a 600 square foot suite with a fully equipped kitchen,” say “Since you’re traveling with your family, you’ll love having all the extra space this suite provides. And the kitchen will be nice if you want to make breakfast or bring back take-out one evening.”
Avoid making lower-rated options sound undesirable.
This is especially important when using a top-down approach, or when guests decline the upsell offer. Be sure to reinforce the positives of the lower-tiered rooms with statements such as “With this option you will still receive all the same amenities and services…” or “Although this room is a little smaller, it still has…”
Use personal recommendations that tie into their stated needs.
“Since you’re traveling on business, I’d definitely recommend the executive level rooms…” “Since you are traveling with a family, our suites would be just perfect for you….”
When Upselling At Registration:
Reconfirm the pre-reserved accommodation; reassure the guest that they already have a nice room.
Avoid making the options they’ve already selected sound undesirable and instead say “Mr. Johnson, we have you confirmed in one of our ______ rooms, which I’m sure you will find quite comfortable…”
Probe to find out if the guest is aware of available upgrades with statements such as:
“Did your (travel agent or assistant) have a chance to tell you about our ____ rooms?” or “May I ask if you are familiar with our suites?”
Present the availability of upgrades as a unique opportunity
by saying: “We’ve had some of our ____ rooms open up this evening…” or “We’re offering a special rate to help familiarize our (repeat or first time) guests with our business suites…”
Utilize incremental sales techniques,
especially since in their minds the original room rate has already been paid. “For only $25 more, I can offer you one of our _____ rooms.”
-Mention higher rates as a reference point to position lower rates as being a good value:
These rooms usually run _____, but because of (special circumstance) I can offer you a special rate of _____.”
Structuring Rates So That An Upgrade Is A Reasonable Value
Most properties market a range of rates to various market segments. However, groups, high-volume accounts, or guests participating in special discount programs, are only offered their special rate for the least expensive room type. Upgraded accommodations, if offered at all, are at rack rates. The end result is that the additional cost to upgrade does not justify the value received.
For example, if the rack rates are $100 for a regular room and $135 for deluxe, a $35 difference seems reasonable. However, when a special corporate rate of $79 is offered for the regular room only, the upgrade fee, which is now $56, is effectively out of reach.
To work around this, many properties are implementing a “flat rate” for upgrading. In this scenario, the guest always has the option of upgrading for the same fee, regardless of what rate they qualify for. So whether it’s a corporate, group, government, or promotional rate, the investment for the upgrade is reasonable. Best of all, additional revenue is created from rooms which might have been given away at lower rates anyway!
Recognition And Incentive Programs.
A key ingredient in any upsell program is to measure the results and to implement a recognition and/or incentive program. Front desk upsell incentives are especially easy to justify, as the upsell can be documented. Reservations incentives are sometimes more controversial, because the possibility exists that guests might have requested the upgrade to begin with. If this is a concern, simply set a “quota” for upsells based on your current trends. In other words, if reservations agents typically sell 5 suites a week, then make that a quota and only pay out incentives on the sixth upsell and beyond each week.
Most incentives reward the individual associate for each upsell, with either a predetermined cash amount, with points that can be redeemed for prizes, or perhaps with days off with pay. (Cash incentives should be paid separately to help differentiate rewards from base salary.) Alternatives are team incentives where everyone who works during a given time period (i.e. shift, day, or week) is rewarded equally for upsells which occurred during that period.
Regardless of which incentive program is selected, it is important to post the results in a prominent area on a regular basis. This helps spark the competitive spirit, and reminds all associates of the potential to achieve the same rewards being earned by the top performers.
By focusing your front desk and reservation team’s attention on upselling, by providing training on the tactics for doing so, and by measuring and rewarding the results, your property can turn-on the faucet to this extra revenue stream. Along the way, your guests will enjoy utilizing the extra space, upgraded room features, and special services they might not have otherwise considered.