Hotel Upselling: Motivating Employees to Sell More or Serve Better?

Every hotel wants to increase revenue, and upselling is one of the industry's most effective tools for doing so. But when employees are rewarded for selling more, what happens to the service mindset that hospitality depends on? Based on firsthand experience at GRACE La Margna, this article examines the tension between commercial performance and genuine guest care, asking whether the best upselling strategies motivate employees to sell, to serve, or ideally, to do both.

Sales Performance vs. Guest Experience

After completing my operational internship at the new GRACE La Margna hotel in St. Moritz, I kept returning to a simple question. Would an employee be more motivated by being rewarded purely for sales performance, or by being encouraged to balance revenue generation with guest experience? I have not found a simple answer, because motivation depends not only on the financial value of a reward, but on the behavior it encourages.

The way a hotel incentivizes upselling reveals a great deal about its priorities. Does it value revenue above all else, or does it recognize that lasting profitability depends on guest relationships and trust? This article explores that tension through the incentive system I observed during my internship. I combine three things throughout: what I saw and experienced as an intern, a close look at how that specific system was designed, and what the system suggests more broadly about upselling as a practice in hospitality. 

The Upselling Dilemma

In hospitality, upselling is a significant source of ancillary revenue. Industry benchmarks place ancillary income commonly at roughly a fifth to a third of a hotel's total revenue, and hotels that manage it deliberately tend to report noticeably higher profitability than those that treat it as an afterthought (Bellboy Hospitality Insights, 2025; Prostay, 2026). Whether it also improves guest satisfaction depends entirely on execution.

An upsell that responds to something the guest has actually revealed, such as a room upgrade proposed to a couple celebrating an anniversary, or a spa treatment offered after a guest mentions feeling tired, is experienced as care, because it solves a need the guest expressed rather than one the hotel invented. An upsell that ignores this signal is experienced as a sale, even if politely delivered.

When employees recommend irrelevant or unnecessarily expensive products simply to earn commission, guests may feel pressured and treated as revenue sources rather than as people. Upselling creates a real tension between employee motivation, ethical selling, and service quality. This article examines that tension through a real incentive system: why it motivates employees, where it falls short, and how it could be strengthened to protect the guest experience. 

What is Upselling in Hospitality?

Upselling means encouraging a guest to purchase a higher-value option or add something to their original booking. Examples include better room category, breakfast, late checkout, a spa treatment, or a premium dining experience.

Effective upselling, though, is not simply about selling more. It involves understanding the guest and recommending something that genuinely improves their stay. The difference between helpful and aggressive upselling lies mainly in relevance and intention.

Employees require three skills to get this right:

• Emotional intelligence - Recognizing the guest's emotions, mood, and level of openness.

• Product knowledge - Understanding the hotel's products well enough to explain their benefits accurately.

• Social intelligence - Knowing how, when, and whether to make a recommendation without creating pressure.

Employees with these skills do not make the same offer to every guest. Instead, they listen, spot an opportunity, and adapt their recommendation to the individual situation. (Oaky, 2025)

During my internship, after showing a couple to their room, I could sense they were not quite satisfied with it. Instead of letting them settle in, I offered to move them into one of the hotel's nicest rooms. Because I had actually picked up on what was bothering them rather than offering a generic upgrade, they were happy to pay the difference and ended up far more pleased with their stay. It is a small example, but it captures the same point made earlier about relevance. The upgrade worked because it answered a real need, not because I was pushing the most expensive option available. 

Upselling Across the Guest Journey

Rather than sorting upsells into fixed categories, we can organize them around where a guest is in their journey (Brown, 2025).

• At the moment of booking, when a guest has already chosen a room, the natural add-ons are things they can plan for in advance, such as breakfast or a room picked for its view.

• Two days before arrival, once a check-in email lands in a guest's inbox, their mindset shifts from planning to anticipation, making it the right time to offer something experiential, such as a spa treatment or a birthday surprise arranged in the room.

• Once guests actually arrive, the upsells that convert best are practical ones tied to convenience: early check-in for someone who does not want to leave luggage at the desk, late checkout for a guest with an evening flight, or a table booked at the hotel restaurant before it fills up.

• And once a guest has settled in, new opportunities keep opening throughout the stay itself, so a hotel that treats upselling as a single moment at check-in ends up missing most of what it could actually sell.

Seen this way, timing does much of the same work that personalization does elsewhere in upselling. A late checkout offered to everyone is generic, but the same offer made to a guest who has just mentioned an evening flight works because it answers something the guest actually said, and at the moment, it is most likely to matter to them.

This distinction between generic and personalized upselling matters a great deal once you look at how a specific hotel tries to encourage it, which is where my internship comes in.

Learning Upselling at GRACE La Margna

At GRACE La Margna, I worked at the front desk, which put me in direct contact with guests at both check-in and check-out, the two moments the incentive system leans on most heavily.

Training was not immediate. For my first month, I was not allowed to upsell at all, since the hotel wanted employees to have a solid grasp of the products and the proper way to bring them up before letting them near a guest with a commission attached to the conversation. Only once that foundation was in place was I trusted to start recommending upgrades and add-ons myself.

Once I was allowed to use it, the system itself felt straightforward. The commission rate never changed. It was a flat 5% of the sales generated through upselling, and every upsell was logged directly in the property management system, so there was never any ambiguity about what counted or who it belonged to. What stood out to me most was that, even as a trainee, I was still allowed to take part once I had been trained, rather than being kept on the sidelines. This has given me a huge opportunity to learn and grow as a person. 

Designing Incentives for Performance

This system is based on a combination of individual and collective financial incentives:

• Employees receive a 5% commission on the value of every individual upsell they generate.

• An additional 1% monthly bonus, calculated on total upselling revenue, is shared across the entire team.

• Housekeeping supervisors also receive a separate 1% of the total monthly upselling revenue.

All incentives are paid monthly, as part of the following month's salary. To make sure this stays accurate and transparent, every upsell is recorded in the property management system, so both employees and management can track individual and team performance over time. The front desk also fills out an upselling confirmation form for the guest to sign, which confirms that the guest understands and accepts the extra charge. This last step matters more than it might seem - it cuts down on disputes at checkout, which in turn protects the trust the whole incentive system depends on.

Employees are also given both monthly and annual room upgrade targets. For example, every month the management sets a goal based on the occupancy expectation, seasonality and previous month performance. The monthly target gives them something immediate to work toward, while the annual target keeps performance consistent over a longer stretch. Together, the two help employees track their own progress and treat room upgrades as a regular part of talking to guests, rather than something they only think about occasionally.

This structure rewards both personal contribution and collective performance. The individual commission gives employees a direct incentive to spot room upgrade opportunities, while the shared bonus encourages colleagues to support one another.

The system also appears effective, in part, because of its clarity and transparency. Employees understand how rewards are calculated and can see the connection between their actions and compensation. This matters because an incentive loses much of its motivational value when its rules seem confusing, inconsistent, or unfair. The collective component also encourages knowledge sharing. More experienced employees may help colleagues improve their product knowledge and sales technique because the whole team benefits from stronger performance. 

Why the System Motivates Employees

Financial incentives can be powerful motivators because they establish a visible link between effort, performance, and reward. Every successful upsell delivers an immediate, measurable benefit to the employee.

The 5% rate is high enough to hold an employee's attention without distorting their recommendations. A 5% commission on a modest room upgrade is a small enough sum that it does not obviously tempt an employee to push a guest toward something they do not need, but it adds up meaningfully over many small, well-placed suggestions across a shift. The system provides strong behavioral reinforcement this way. When an employee receives a commission for a room upgrade, they are encouraged to repeat the behavior. Unlike a winner-takes-all competition, every employee can benefit from their own performance.

The 1% collective bonus makes sense for a related but different reason, even if the concern behind it turned out not to be much of a problem within the front desk itself. Shifts were designed so that each covered its share of the day's check-ins, and the schedule rotated rather than staying fixed, so no one was stuck permanently on the quieter side of the day with fewer opportunities to sell.

Where a real gap in opportunity does show up is across departments rather than within the front desk, which is what the housekeeping supervisor shares addresses below. Even so, the shared 1% still does useful work. It lets employees benefit from the team's overall performance rather than only their own tally, and it gives experienced colleagues a reason to help newer ones spot opportunities they might otherwise miss, since a colleague's success adds to everyone's bonus rather than only their own.

The separate 1% paid to housekeeping supervisors follows the same logic, extended to a team that never speaks to the guest at the moment of the sale but still carries the consequences. A room upgrade does not just create revenue. It creates extra work, since an upgraded room may require a different setup or additional amenities to be prepared before the next guest arrives. Without their own share, housekeeping supervisors would have every reason to see upselling as a source of pressure rather than a shared win.

The 1% turns that around. It gives them a direct stake in the hotel selling more upgrades, which in turn gives them a reason to prioritize those rooms, brief their teams on what is coming, and treat the extra work as worth the effort rather than an unplanned burden. Another positive effect of, the shared bonus is to reduce excessive internal competition. Employees have a reason to cooperate, exchange information, help each other, and celebrate collective results.

Nevertheless, the system motivates a very specific behavior. It is worth asking directly: does it motivate employees to sell, or to serve? 

Where the Model Succeeds and Falls Short

The system has several clear strengths. It is transparent, easy to understand, and inclusive. The confirmation form guests sign at the front desk further reinforces this strength, since it means neither the guest nor the hotel can later dispute what was agreed to. Every employee benefits from this, not only the strongest sellers, since the 5% goes to whoever closes a given room upgrade, and the shared 1% spreads across the whole team regardless of who sold what that month. The monthly and annual targets work more like a compass than a gate: an employee earns their 5% on a room upgrade the moment it is sold, rather than being held back until some threshold is cleared.

Beyond front desk and housekeeping supervisors, no other layer of management appears to draw an extra bonus from room upgrade revenue, which reinforces the sense that the housekeeping share is a deliberate choice to reach a team that supports the sale, rather than a bonus that quietly funnels upward.

It rewards individual effort while keeping a sense of teamwork, and it can deliver quick, measurable improvements in ancillary revenue. Its main weakness is that it mainly measures the monetary value of an upsell. Employees may consequently focus on the quantity and price of their sales rather than the suitability of their recommendations. This can lead to aggressive upselling, repeated offers, or recommendations that do not fit the guest's needs. Such behavior may increase short-term revenue, but it can damage trust, satisfaction, loyalty, and the hotel's reputation. 

Rewarding Value, Not Just Sales

An employee rewarded exclusively for sales may be strongly motivated to generate immediate revenue. An employee encouraged to balance revenue with guest satisfaction is more likely to create lasting value. The incentive system I observed at GRACE La Margna is effective because it is clear and supportive of teamwork.

Upselling should not mean persuading guests to spend as much as possible. It should mean understanding what could improve their stay and offering it appropriately. The best incentive system rewards employees not simply for selling more, but for creating more value for both the guest and the hotel. 

References

Bellboy Hospitality Insights (2025). Ancillary revenue in hotels: 12 creative ways to boost profits beyond room rates. https://www.bellboytech.com/blog/ancillary-revenue-in-hotels

Brown, T. (2025). How to master the art of upselling in hospitality. Hospitality Net. https://www.hospitalitynet.org/opinion/4125840/how-to-master-the-art-of-upselling-in-hospitality

Oaky. (2025, March). Hotel front desk training: 9 steps to stellar service. https://oaky.com/en/blog/hotel-front-desk-training

Prostay (2026). Ancillary revenue: hotel profits beyond room sales. https://www.prostay.com/blog/ancillary-revenue-hotel/