Up-selling is Good for Your Hotel
By Brian McEvilly , GM GoGroupBooking.com
One of your regular customers comes into your hotel bar and asks your barman for a whiskey and coke, your barman notices that the customer is looking a bit down and ask, "Do you want me to make it a double."
The above anecdotes are all really great examples of hotel staff up-selling to guests. In this blog I will explain all the advantages and benefits up-selling can bring to your hotel and provide you with information on how to up-sell to your guests.
Overview of Up-selling
Up-selling is used by a large and growing number of companies across many different industries as a key component in their marketing and revenue generating strategy. Electronic stores offering extended warranties and home deliveries, trades people offering upgraded kitchen and bathrooms, and airlines charging passengers extra for extended leg-room are all great examples of different businesses using the up-selling model to increase their profits.
However the hospitality industry has been slow in adopting the up-selling mode. Instead hotels have favoured providing high valued guests with free upgrades, in hopes of attracting repeat business and brand loyalty.
Up-selling simply involves a sales person (In a hotel this would be the receptionist, reservation manger, or revenue manger) selling an existing customer a more expensive or additional product or service. In the context of the hospitality industry this could mean a hotel offering guests the chance to purchases a more personalised service or access to extra hotel amenities such as the spa or gym.Perhaps the reluctance amongst hoteliers to fully adopt up-selling can be explained by the misconception that in order for a hotel to up-sell to its guests it must provide premium inventory to get maximum value.
Fortunately hotels like every other enterprises only has to focus on the advantages their business has in order to up-sell. It is also very important to note that up-selling can also allow a company to turn a perceived disadvantage into advantage.
Tim Peters in his eBook, When More is More, gives the example of a hotel located close to an airport that up-sells its runway view bedrooms to families with young children. As you know a bedroom with a view of a runway would not be very desirable and most hotels would offer those bedrooms at a much lower rate. However the hotel that Peters gives as an example was able to up-sell runway view bedrooms by marketing the rooms as making the hotel experience more memorable and enjoyable for children, because they can watch the planes land and take off.
Hotels situated in city centres have found they can up-sell their smallest rooms by marketing them as executive efficiency bedrooms, which offer business travellers breakfast, faster internet speeds, and mulit-function printers.
The Up-sell model works because people don't have an in build value meter that tells them how much things are. Instead people focus on the relative advantage of one thing over another, and estimate the value accordingly. All you have to do is offer your guests a service or product that has perceived value for your guests.
It is up to every hotel manager, revenue manger, and marketing manger to up-sell every aspect of their hotel. As we have seen from the examples above there is very little of a hotel that cannot be turned into an up-sell and a disadvantage can be turned into advantage.
The Benefits of Up-selling
If you want raise your hotel's revenue through increasing your occupancy rate you will have to spend valuable resources on prompting your hotel online through paid search, SEO activities, buying advertising in the media or paying higher commissions to online booking agents like Booking.com and Late-Rooms.com.
If you try and raise revenue through increasing room rates you risks coming up against guests' resistances and loss of market share to your competitors. The beauty of the up-selling model is it allows you to increase your hotel's revenue without having to spend huge amounts of money or risk losing guests.
The advantage of benefits of up-selling:
- Higher profitability
- Stronger guest loyalty
- Increased referrals
- Shorter sales cycle
- Greater utilization of hotel facilities
How and where to Up-sell
- Coaching and Training:
It is essential that your staff are trained and confident in up-selling to guests. Make sure your employees have an in-depth knowledge of the services and products you are trying to up-sell. Make sales part of the job description for your reception staff.
- At Booking:
You can start up-selling as soon as a guest makes a booking. If a guest books on the phone make sure your reception staff tells the guest about the special offers your hotel has to offer. Alternatively if your hotel has an online payment system you can set up automated emails to be sent out to new bookings informing them about all your up-sell offers.
- At Check-In:
The check-in offers you and your staff a great opportunity to up-sell to your guests. A guest may have booked a basic package but get your reception staff to offer every guest the chance to upgrade to the deluxe package. Remember that guests don't like to be sold but do like to buy. So don't try and push the up-sell on your guests, up-selling is not about the hard sell.
It may seem strange but a great time to up-sell is when your guests are checking-out. Inform your guests about your hotel's loyalty program and your promotional offers. Up-selling at check-out time will get guests use to been offered up-sell services which will lead to guests been more open to buying up-sell services in the future.
As mentioned early in this blog getting more guests is not easy and can be very expensive. An article from the Irish Daily Mail found that hotel booking sites are charging hotels between 15% and 25% commission on every booking. Up-selling allows you to get the most out of your business and increase your revenue without investing heavily on marketing, and paying online booking sites outrageous sums of money. If you haven't fully embraced the up-sell model now is the time to do it.