When you’re running a hotel, generating revenue is the name of the game. But are you taking advantage of all the ways you could be earning? Staying competitive means staying nimble, and thinking outside the box of room rates and reservations is a fantastic start.
Enter ancillary revenue, the income you generate from anything other than room bookings. As Gilbert Arredondo, Senior VP of Revenue Strategy at Remington Hospitality, put it, “Hotels should focus on optimizing ancillary revenue streams and strive to be the market leader in their competitive sets.” But before you go all-in on ancillary, calculating the return on investment (ROI) shows you the numbers you need to succeed.
Key highlights:
Focusing on upsell ROI is critical for your hotel’s bottom line because of its potential for generating ancillary revenue. If you aren’t doing upsells already, money is left on the table. If you’re doing them without experiencing much ROI, you’re not optimizing your revenue streams.
Regardless of which bucket you fall into, the trend is clear: upsells are no longer optional. In fact, a 2025 joint report from Oracle and Skift found that 49% of hotel executives strongly agreed that “special amenities and upgrades are critical to our revenue strategy.” The term “upsells” may bring expanding services to mind, but an easy way to get started is by upselling what you already have.
Simple add-ons like early check-in or room upgrades are popular with guests and drive higher total revenue per available room (TRevPAR) while delivering insights into what your guests want. With a little creativity combined with some data insight, upselling is a powerful way to increase revenue and guest satisfaction at the same time.
When evaluating the potential of your hotel’s upsell ROI, you’ll need to know four key things: your upsell opportunities, the revenue potential of each, related costs and the upfront investment required. Additionally, you’ll want to consider the time period you’d like to examine — ROI can look very different when calculated by the week, month or year.
The first step in creating your upsell projection is identifying what you have to offer. Common high-performing upsells include:
There’s no shortage of options, but the most effective ones are rooted in guest insights. Use past booking data, guest demographics and stay patterns to pinpoint which add-ons are most likely to convert.
Measuring the revenue you’re generating from upsells gives you a clear picture of what’s effective. Look at historical guest data to see upsell-specific revenue like:
For even more accuracy, try to attribute this revenue to the upsell campaign or channel that drove it. Knowing whether add-ons come from SMS, front desk prompts or mobile check-in can inform where to focus your upsells in the future.
You’ll also need to consider the costs related to the add-ons you offer. Upsells involve both variable and fixed costs, which should factor into your calculation.
Variable costs are expenses that fluctuate based on hotel activity, such as occupancy levels or guest usage. Examples of this that pertain to ROI include:
Fixed costs refer to the unchanging expenses that support the upselling process. This would involve:
If you’ve recently adopted a hotel upselling software, launched a sales incentive program for staff or invested in specific staff training, that goes into the investment column. Track it quarterly or annually, depending on the ROI window you're evaluating.
We’ve created a hotel ROI calculator you can use to get a more accurate result based on the data we see from hotels selling add-ons every day. Get an instant hotel ROI calculation based on:
Use Canary’s upsell return on investment calculator to find out ballpark annual revenue your property can expect. Simply input key details about your hotel and receive a data-backed assessment in seconds. Try it now:
Boosting ROI from upsells isn’t just about what you offer. It’s also about how you offer it, when you do and who you target. But that doesn’t have to mean more work for your team! A dynamic upsell tool means your staff won’t have to stick to the selling scripts for higher conversions.
If you’re considering a dynamic upselling approach, here are six actionable strategies to implement.
Generic offers may occasionally align with what your guests want, but more often than not, they’ll fall flat. Considering the context of a stay allows you to deliver the right offer at the right moment. Look at past stay data, how they booked and their reason for travel to increase relevance. This could look like:
Great upsells feel less like sales pitches and more like enhancements, which is why timing is everything. Modern solutions like mobile check-in, guest messaging software and digital in-room information mean offers always happen at the right time without extra work. Here’s how to do this at each stage.
Start making a first impression before guests even arrive. Pre-stay messages and mobile check-in options roll out the welcome mat well in advance and let you showcase add-ons easily. It's a great spot to offer room upgrades, early arrival options or in-stay activities to book in advance.
Even when guests choose digital check-in options over the front desk, that doesn't mean they'll miss the selling script! A Self-Service Kiosk is a great platform to add upsell prompts right in the user flow. Visual cues and detailed descriptions let guests evaluate their options in a natural way for higher conversion.
Upselling technology also makes it possible for hotels to offer add-ons beyond the lobby. Upgrading in-room booklets to a digital hotel compendium lets guests browse available offers on their own time and their own devices, while an AI-powered messaging solution intelligently makes offers throughout the stay.
For efficiency and ease of use, digital upsells can't be beat. That said, it’s still important that your staff still knows how to present your add-on offerings. Train them on the value of each offer and how to present upsells non-intrusively when guests have inquiries. It's also fun to implement incentive programs to reward successful upsell conversions.
Timing is important when it comes to upselling, but presentation matters too! Be sure to upload photos and descriptions into your upselling software so guests can evaluate the offerings. You can also lean into themes with unique bundles, such as a date night package or a birthday bonanza.
Increasing your upselling efforts doesn't equate to more work for your team. Leverage automation with hotel upselling software to present add-ons without adding labor considerations. For even more efficiency, sync it with your guest experience software to provide add-ons via messages, check-in and more.
Even with automation, upselling is too important to take a “set it and forget it” approach. Through proper data tracking, you can refine your strategy and increase performance for an even higher ROI. Some interesting metrics to look at include:
Upsells are great for revenue, but when done well, they have a positive impact on the guest experience, too. Relevant offers won’t feel salesy—instead, they’ll feel like your hotel really understands each guest it serves. When a guest chooses a service you recommend and has a positive experience, you’re driving brand loyalty, positive sentiment and an emotional connection.
Pro tip: Implementing a Digital Tipping solution is a great way to let guests say thanks to the staff for fulfilling these upsell requests, too!
Upselling works best when it’s grounded in data, supported by automation and tailored to each guest. Using a custom hotel ROI calculator gives you the insight you need into what's possible — check out our hotel revenue management ROI calculator if you haven’t yet!
If you’re ready to take the plunge into ancillary revenue, book a demo to see how Canary can support your efforts. Through tailored offers, performance tracking and time-tested strategies, we’re here to help you turn every guest interaction into an opportunity for better service.
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