increasing coins with an arrow reflecting upselling trends in hotels

As a hotel or lodging business owner, you’re constantly seeking innovative ways to enhance your revenue stream and secure your place in the competitive hospitality market. If you’re looking to immediately amplify your establishment’s revenue, upselling is a key tactic. A simple yet powerful technique that can significantly boost your establishment’s revenue without the need for acquiring new customers or adjusting room rates. In this article, you’ll learn everything you need to master it.

NB: This is an article from Smartpricing

Subscribe to our weekly newsletter and stay up to date

Upselling: A Vital Tool for Revenue Growth

Upselling, at its core, is the practice of encouraging customers to purchase a superior version of a product or service they’re already buying. Imagine this: a guest books a standard room, and you successfully persuade them to upgrade to a superior room. Or, a diner chooses house wine, and you entice them with a premium selection. It’s a strategy of subtle elevation – offering a paid upgrade that enhances the guest experience while boosting your revenue.

Explore your establishment’s revenue potential through upselling now: Download our free Excel tool to calculate your earnings through room upgrades and other upselling opportunities.

Why Upselling is a Game-Changer for Hospitality Businesses

  1. Revenue Growth: The most tangible benefit of upselling is its direct impact on revenue. You’re engaging with customers already committed to a purchase, making them more receptive to suggestions of extra services or products. This pre-existing customer relationship lowers the barrier to additional sales.
  2. Enhanced Customer Perception: Upselling isn’t just about increasing sales; it’s about enriching the guest experience. From the customer’s perspective, upselling introduces an element of choice and personalization, which they often perceive as an upgrade in quality and value. This perception stems from two psychological principles: anchoring and personalization. Anchoring occurs when the customer’s mind uses the initial price or product as a reference point, making any additional cost seem relatively minor. Personalization, on the other hand, allows customers to tailor their experience to their preferences, which elevates their perception of the quality of your service.

Optimal Moments for Upselling

Identifying the right moments to upsell is key. These moments are typically when the guest is most receptive and can focus on the offer without distractions.

  • Pre-Stay Communication: In your pre-stay email, after essential information, include a targeted upselling offer. This communication should be concise and relevant, avoiding unnecessary details about other services or local news.
  • Check-In Process: The check-in phase is ripe for upselling. Guests are usually in a relaxed state, open to suggestions that could enhance their stay. The key here is to articulate clearly how the upgrade enhances their experience beyond what they’ve already opted for.
  • Wi-Fi Login: A unique moment to upsell is during the guest’s first login to your Wi-Fi network. Keep your message brief and to the point to quickly capture their attention.

Effective Upselling Techniques

Several upselling strategies have been proven to be effective:

  1. The Sandwich Method: This involves offering three choices – a basic option, a slightly superior middle option, and a top-tier, more expensive option. The goal is to sell the middle option, which strikes a balance between quality and cost.
  2. FOMO (Fear Of Missing Out): Utilize scarcity and time-limited offers to create a sense of urgency, encouraging guests to upgrade for fear of missing out on a great deal.
  3. Social Proof: Human beings are influenced by others’ choices. Including positive reviews or testimonials about the upgraded options can be persuasive.
  4. Focus on Differences: Emphasize the additional benefits of the upgrade rather than its overall cost. Highlight what makes the upgraded option special compared to what the guest originally booked.
  5. Offer a Gift/Extra: Consider including a small gift or an additional perk with the upsell, like a complimentary cocktail or more flexible booking conditions.

Explore Your Upselling Revenue Potential

To truly understand the impact of upselling on your business, we’ve developed an easy-to-use, customizable Excel-based revenue calculator. This tool helps you estimate the potential monthly revenue uplift from offering room upgrades and more. In summary, upselling is more than a mere sales tactic; it’s a strategic approach to not only boost revenue, but also to enhance customer satisfaction and loyalty. By incorporating upselling into your business model, you can unlock new revenue streams, enhance customer experiences, and secure your establishment’s competitive edge in the hospitality industry.

Read more articles from Smartpricing