How to Ace Upselling and Increasing Hotel revenue?
Upselling is a term that most business owners are familiar with. When a guest turns up to book a regular room, you always push a Deluxe room at them. But, does this approach always work? Probably not. In this article, I will discuss how to ace upselling and consequently, how to increase hotel revenue.
First, let us discuss what is wrong with the attitude to upselling that I mentioned in the beginning. In that situation, you are making a hard sell. And you are also making a generalized hard sell, which is worse.
When it comes to upselling, you have to ask yourself three key questions:
- Who is the correct target for upselling?
- What am I planning to upsell?
- Is the object of upselling relevant to improving their stay?
I will elaborate upon the first two questions as we move on with this article. But if the answer to the answer to the third question is in any way dubious, stop right here! While increasing your hotel revenue is the ultimate goal, you should not be pushing irrelevant offers at guests. You shouldn’t upsell for the sake of upselling. The object of upselling has to add value to the guests’ stay.
Before we begin, let us also discuss the concept of cross-selling which goes hand in hand with upselling. While upselling, you try to sell your guest a higher-end product than the one that they’ve set out to buy. For example, a Deluxe room instead of a regular queen. In cross-selling, you try to sell other relevant and complementary items. For example, a spa package with their hotel room stay. You should be attempting to do both upselling and cross-selling to increase your hotel revenue.
Now, let us get straight to the best methods of upselling.
8 Best Methods to Upsell and Increase Hotel Revenue:
Choose the Right People to Upsell To
As I have already stated in the introduction, this is one of the key questions that need answering. Who is the correct target for upselling?
Not everyone can or should be upsold to. Every business in the world segments its customers and then targets them in separate ways. The reason for this is obvious- not everyone has plans to spend more money than they had planned.
You should be able to spot guests who are willing to spend a bit more. I’m not asking you to be a mind-reader. Depend on your Property Management System (PMS) for this.
A PMS software stores every bit of customer information in a digitized format. So, you can have decades’ worth of guest data any time you want at your service. Use this to figure out customer behavior and segment your guests. After all, it takes only a bit of common knowledge. Obviously, a honeymoon couple is going to spend more lavishly than a group of university grads.
Once you know whom to upsell to, figure out what to upsell. I am stressing the importance of personalizing your upsells here. You cannot upsell the same offers or objects to all customers equally. Figure out what each guest needs and proceed accordingly.
Upsell Through Your Hotel Website
Whenever a potential guest is looking through your site, they are already looking for offers and packages. For example, a lot of us look for car rental services or free parking when we search for hotel rooms. This is why your upselling offers should be listed on the hotel website itself.
“Get 50% off on car rental charges by upgrading to a Deluxe room for just $29 more.”
An offer like this is exactly what many guests are looking for. So this should be on your hotel website itself from where they are making the reservation.
Offers like these have an added benefit. Guests flock to your actual hotel website instead of OTAs because they know these offers are exclusively available there. This is profitable for you because most hoteliers try to limit their use of OTAs. OTAs have various problems like delayed payments associated with them. Offers like these direct the traffic straight to your hotel site.
Also, remember this strategy. Never state your absolute prices while upselling. Always go with “for only $39 more.” Not “for $167.” The first option with relative pricing sounds way more enticing.
Automate the Process
I have already stated in Point 1 why automating the process is important. You need to get a PMS like StayFlexi involved in the process of identifying customer trends. But Point 2 also hints at the necessity of automation.
Long gone are the days when the concierge would have to sweet-talk the guests into opting for additional packages. The upsell happens right at the time of booking now. And bookings happen through digital platforms, either through OTAs or your hotel site.
This is why you need automations to take care of the upselling. Whenever a customer is booking a room, a PMS will spot their buying pattern and suggest upsells. This pattern recognition happens the moment they put in their personal details. That is, what is the purpose of the visit, how long they’ll be staying, what amenities they’ll be availing. This information is enough to let a PMS know which products they should be upselling.
Groups are easier to upsell to than smaller parties. This is because no one person is the sole decision-maker. Or even if they are, they have to keep everyone’s preferences in mind. This is why most groups decide to opt for combo deals that more or less everyone agrees with. The individual cost is often ignored in those situations.
But you as a hotelier, have to make sure that the combo deals that you are offering suit the needs of the group. For example, several business organizations host large conferences. Audio-visual setups, stage set-ups, and lighting all have to be taken care of during these conferences. You can offer them package deals that combine all of these services at a special price.
If you have a wedding party at hand, that’s great news for you as well. Offer them additional rooms at a lower price. Very often wedding parties prefer to book more rooms just to play it safe. As they say, it’s better to err on the side of caution. Most probably 5-6 rooms will go completely unused. So, if you are careful, you can even sell these rooms to other guests who show up that day.
Collab with Local Businesses
This is a very important aspect of cross-selling. Guests often prefer to have their entire trip taken care of by the hotel itself. This means they expect you to arrange for sightseeing, hiking, adventure sports, etc.
This is actually more beneficial for you as well as the local businesses that you partner with. You get to keep a small commission from each of these cross-sells and more importantly, you get data. Data regarding customer behavior and buying patterns is priceless in the hotel business. This lets you know what you should try to upsell or cross-sell in the first place.
You have to keep the local culture around your hotel in mind while cross-selling. Some places are famous for their local food. In such situations, you should arrange for local food tours. Partner with local farms to get the freshest produce. There are multiple ways to win guests over.
No guest travels to just stay in the hotel. But if you make their hotel stay an immersive experience into the local culture, they’re bound to remember you.
Search Out the Gaps in Guests’ Schedules
This is directly connected to the last point. You should try to keep a handle on your guests’ trip schedules. But how to do this without stalking them or making aggressively hard sells?
The answer to this lies in PMS-generated questionnaires. The moment your guest makes a booking, you are supposed to send them a confirmation mail. Pack in as many relevant questions in this confirmation mail as possible. The guests will be willing to answer these because they know these will directly affect their stay.
Let’s say some business guests are arriving for a conference. But the conference has a break in the middle due to an intervening weekend. Ask your guests what they are planning to do over this weekend. Better yet, suggest plans for local sightseeing tours conducted by the hotel. Give them at least 3-4 options and they are bound to make a choice. This is a guaranteed way to upsell and increase your hotel revenue.
This is not the only situation where you can make such an upsell. Most people don’t have a jam-packed itinerary. And even if they do, they are often open to suggestions. This is where you can swoop in and suggest restaurants that you’re partnered with or offer them car rentals.
Get the Timing Right
This is one of the most crucial elements of both upselling and cross-selling. There are specific points in time when you should do both.
Upselling should be done at the time of booking, as I have stated before. Because this is where they can upgrade their rooms or book extra rooms while making the reservation. But cross-selling should be done after the booking process has been completed. In fact, cross-selling works best when the guest has already arrived at the hotel. This is because now they have a better idea of the quality of products or services they are going to get. If their first impressions are good then you stand to make a lot of cross-sells in the first few days of their stay.
If they get a taste of your stellar services, they will be more likely to avail more of those. But this does not mean that you should drive a hard sell at this point. A soft sell always works better if you can convince the guest that the upgrade is beneficial to them. And if you cannot convince them of this fact, you should not be pushing that upgrade at all.
Know What To Upsell
I have made several suggestions throughout this article on what you can upsell. But that still doesn’t excuse the fact that I have no idea about the specifics of your property. The only way you can really understand what to upsell is by studying your customer behavior.
Good thing is, a PMS like StayFlexi makes this super easy. It automates the entire process of hotel management, housekeeping, and POS shops. What this means is that StayFlexi has detailed data of what each guest prefers or buys. This data is then supplied to you in the form of meticulously formed analytics and audit reports.
Every little piece of information here is crucial. Which dish is being ordered the most? Which category of guests is most likely to ask for champagne bottles? Which entertainment options are the guests flocking to the most?
As soon as you figure out the answer to these questions, you’ll know what to offer to the guests. And you will also know exactly whom to offer it to.
Just ask yourself this question. Would you be able to have access to this in-depth information regarding customer behavior in any other way? Of course not!
PMSs like StayFlexi have revolutionized the way in which you can know your customers and predict their behavior.
When to upsell? What to upsell? Whom to upsell it to? Will this upsell be beneficial for the guest?
To ace upselling and increase hotel revenue, these are the questions you need to be clear about. When it comes to upselling, personalization is the key. But before you can personalize, you need to know your customers. And this is where StayFlexi comes into the picture.
Unless you digitize your hotel management and guest interactions, you will never be able to acquire usable data. This data is crucial for making informed decisions on which products to upsell and to whom.
Hope this article gave you some useful tips that you can now implement while upselling. Want to know more about how StayFlexi understands customer behavior and how it supplies this knowledge to you? Leave a comment below!