What is Upselling in Hotels? 10 Foolproof Ways to Drive Revenue

Bryan Michalis
Bryan Michalis
Updated
February 27, 2024
/
Published
December 6, 2023
What is Upselling in Hotels? 10 Foolproof Ways to Drive Revenue

Perhaps you’ve been upsold in the past. Did it seem pushy and maybe… forced? Did it seem like the staff member was just following a script? That’s because upselling is often an afterthought for many hotel businesses.

With good training and a pinch of personalization, upselling becomes something that doesn’t just get you the odd bit of revenue here and there. It becomes a practice that transforms your hotel, your relationship with guests and your bottom line.

What is Upselling in Hotels?

Upselling is a sales technique where hotels offer guests an upgrade, add-on or service to earn additional (ancillary) revenue and enhance the guest experience.

But upselling comes in many shapes and sizes: there’s no one way to do it! It’s an umbrella term that comprises multiple upselling techniques. You could go for traditional methods (in-person), modern methods (using technology) or a blend of both.

Let's look at the different ways you could upsell throughout the guest journey:

     
  • Pre arrival : Send an email to offer add-ons such as parking, transportation or pet services.
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  • Arrival: Ask guests if they’d like to upgrade their room in-person at the front desk or through a check-in kiosk.
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  • In-room: Offer various entertainment options through guests’ in-room smart TVs.
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  • During the stay: Send guests a text or notification that spa packages are 10% off for a limited time.
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  • Check-out: Offer the guest late checkout for a fee.

5 ways to Upsell in hotels

Upselling, Cross-Selling and Suggestive Selling: Is There a Difference?

The real answer is yes and no. People use the terms upselling, cross-selling and suggestive selling interchangeably. For best results, use the strategies in tandem.

Theoretically, however, there is a difference. Upselling is all about encouraging a customer to upgrade to a better version of a service or product. But what about cross-selling and suggestive selling?

Cross-selling

Cross-selling involves persuading customers to purchase related products. These products are different from the core product or service but will complement it.

Suggestive selling

Suggestive selling is a more subtle form of upselling. It’s about enticing the guest into an upgrade, add-on, service or product by planting a seed.

Why is Upselling Important?

Upselling isn’t just about making your hotel more money (although that’s a big part of it). It’s also about offering guests an unforgettable, personalized experience. Implementing a customer-centric upselling approach provides value to your guests while benefiting your bottom line.

Oracle found that 49% of hoteliers strongly agreed that special amenities and upgrades are critical to their revenue strategy. Fifty-four percent of consumers said they’d pay more to choose their view, 38% said to choose their room and 32% to choose their room floor.

Here are a few reasons why upselling is so vital:

     
  • Increase revenue: Upselling upgrades and add-ons helps you increase your average transaction value, which means more revenue.
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  • Enhance guest experience: Effective upselling means happier guests. Offering guests the right upgrades and add-ons leads to more convenience, luxury and comfort.
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  • Gain a competitive advantage: Offering unique and attractive upsell options helps you stand out from competitors.
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  • Build loyalty: A positive upselling experience contributes to guest loyalty. Guests are more likely to stay again if they are provided added value and personalized attention.

infographic: types of hotel upselling

Traditional vs. Modern Upselling: Which Should I Choose?

If you can’t decide whether you should upsell the traditional way (in-person) or the modern way (using technology), here’s a suggestion: Use the best of both!

Relying solely on the traditional method of in-person selling is no longer a viable option; not when your competitors are utilizing data and a multi-channel approach. Traditional upselling relies on the interpersonal skills of your front desk staff, time-consuming manual processes and limited channels.

But that doesn’t mean traditional upselling is dead. Instead, supplement your invaluable facetime with a modern, data-driven approach. Use dynamic upselling technology to sell throughout the guest journey and utilize multiple channels.

Not seeing enough upsell revenue? Canary can help your hotel boost it by 200%! Schedule a demo now to find out how to customize upsells purchase options, present them automatically to guests, and then approve & deny with ease.

10 Upselling Techniques to Accelerate Revenue

Ready to level-up your upselling strategy? Here are nine techniques to help you make more money for your hotel and delight guests day after day:

1. Personalize Recommendations for Tailored Upselling

According to a global study by IHG Hotels and Resorts’ Voco Hotels, almost half (48%) of respondents said that friendly, approachable and personalized service is more important than ever. Personalization is important and incorporating it will give your upselling efforts an edge.

A great way to do this is by personalizing recommendations. You can do this traditionally, in-person at the front desk. But dynamic upsell technology gives you a way to automatically push the right suggestions to the right guest at the right time using guest data.

2. Offer Limited-Time Discounts

Creating a sense of urgency is a well known tactic to help you sell more effectively. This is because it leads to FOMO — a fear of missing out.

Sounds intriguing, right? Here’s how you do it: create limited-time upsell deals, encouraging guests to make decisions quickly to secure exclusive benefits.

Let’s say you’re offering 15% off spa treatments available for only one day. Spa treatments, typically, aren’t the cheapest services, so this might just sway a frugal guest looking for more relaxation.

3. Create Compelling Upselling Scripts

When it comes to upselling in-person, it’s all about what you say and how you say it. Upselling scripts are an excellent way to give your staff members a starting point.

Once they feel more comfortable, they should feel free to go off-script but the scripts serve as a helpful resource. This is especially true during training.

Create scripts to account for all types of scenarios and occasions. Also, adjust them based on what you’re selling, whether a parking space or a dinner reservation.

Need a bit of upsell inspiration? Use these 11 script examples to make upselling a natural part of the hotel workday. Find out how to upsell late checkouts, dinner reservations, and more.

4. Encourage Advance Purchase Discounts

Advance purchase (also known as “early bird”) discounts are another way to create a bit of urgency. This method incentivizes guests to book reservations and additional upgrades of add-ons well in advance.

Advance purchase discounts help you earn more revenue and improve revenue. It may be particularly helpful to offer these discounts for off-peak periods where occupancy is typically lower.

5. Implement Tiered Loyalty Programs for Exclusive Benefits

Tiered loyalty programs are designed to reward guests with increasing benefits as they move up through different membership levels. These programs are a great way to inspire loyalty and become a go-to hotel for guests returning to your city.

By subscribing to your loyalty program, guests receive exclusive perks like room upgrades, complimentary services or discounts. Some popular tiered loyalty programs in the hotel industry include:

6. Enhance Staff Training for Successful Upselling

Well-trained hotel staff significantly impact the upselling process. Because let’s face it: we can’t all be natural salespeople!

Encourage staff members to be knowledgeable about available upgrades and amenities, develop effective communication skills and identify opportunities to suggest additional services during guest interactions.

Training programs empower staff to provide personalized recommendations, improving the guest experience and increasing upsell success.

7. Use Dynamic Upselling Technology

Dynamic upselling technology employs algorithms and guest data to present personalized upsell offers. This might include targeted emails, in-app suggestions or notifications during the booking process.

Upselling technology gives you a clever way to automate and optimize upselling efforts, ensuring that the right offers reach the right guests at the right time.

“We’ve seen a 200% increase in the number of [upsell] packages we’ve sold since implementing Canary at Staypineapple properties.” - David Thomson, Chief Information Officer, Staypineapple Hotels

8. Send Personalized Welcome Messages

Sending personalized welcome messages to guests before their arrival creates a welcoming atmosphere, provides important information and sets expectations. Send these by email, text or by providing a written letter the guests receive upon check-in.

Welcome messages are also a thoughtful way to introduce upsell options. Include tailored offers for room upgrades, special packages or additional amenities. This sets a positive tone for the guest's stay and increases the likelihood of them opting for upsell options.

9. Partner With Local Businesses:

It never hurts to be friendly with your neighbors. You borrow a cup of sugar, they borrow your lawnmower. It can be a mutually beneficial relationship.

But as a hotel, taking it a step further and partnering with your neighbors—the local businesses in your area—has a multitude of benefits. Chief among these is the boost to your upsell efforts.

Collaborate with restaurants, spas, or attractions to create package deals and discounts. This might include customized packages such as a “romantic getaway” that includes a spa treatment and dinner at a local restaurant.

10. Create Seasonal Upsell Packages

Designing seasonal upsell packages helps you tap into specific themes or trends throughout the year. Imagine it’s the holiday season. You arrive at a hotel, having purchased a festive-themed package and enter your room to find:

     
  • Mulled wine, cider or peppermint hot chocolate
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  • A menu for your approaching Christmas dinner
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  • Festive decorations and maybe even a small Christmas tree!

Seasonal packages offer you a fun way to give guests unique experiences. This leads to happier guests, better online ratings and enhanced loyalty.

There’s No One Right Way to Upsell

Upselling takes skill. But that doesn’t mean your strategy has to be rigid. There are many ways to upsell add-ons and services, including experimenting with technology, getting creative with packages, partnering with local businesses, or learning as you go. Finally, don’t forget to track your performance to find out what’s working and what’s not.

Learn How Canary Can Help Your Properties Thrive

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