by Doug Kennedy, September 13, 2010
Even with the lodging industry starting to rebound, most hotels these
days could still use another revenue source, especially one that is generated
with relatively little effort and cost. Yet many still overlook the
opportunity to upsell guests to higher-priced options. With a little
planning and effort, properties can easily turn-on the faucet to this revenue
stream and reap the benefits immediately.
While upsell opportunities vary greatly according to a hotel’s inventory
of accommodations, most all properties have some potential to upsell guests
- Special room types, such as junior suites, one bedroom suites,
suites with special features such as whirlpool baths.
- Preferred views and resort locations.
- Special “exclusive” floors such concierge or executive level floors.
- Packages that include additional amenities, services, or activities.
There are generally two opportunities for upselling, with the most obvious
being the chance to upsell in advance during reservations inquires.
Increasingly these days it seems the best opportunity to upsell occurs
during the registration because:
Guests may not be aware of upgraded options, especially when the reservation
was made by third party such as a travel agent, administrative assistant,
or function planner.
Voice reservations agents may have failed to convey the value of the upgraded
options, or worse yet, failed to mention them at all.
The guest’s needs might change while en route. Business travelers,
for example, might have pop-up meetings or projects to work on, requiring
additional workspace in their rom.
Strategies And Tactics For Upselling
The impulse of the moment might cause guests to be more receptive to upgraded
options, especially after a stressful day of travel. For example,
when mom and dad were planning the trip it seemed like a good idea to share
a room with the two kids, since “all we’re going to do is sleep there anyway.”
Yet after 8 hours in the minivan the adjoining room or suite starts looking
like a great option.
Whether upselling over the telephone or at registration, here are some
strategies that your staff can use to optimize profits from this revenue
When Upselling Over The Telephone:
Always offer a menu of options. Whether starting from the
top and working down, or using a bottom-up approach, the key is to always
give guests a menu to chose from. Remember that if you don’t mention
these options, they effectively don’t exist for the guest.
Adjust your upsell method according to clues provided.
When guests indicate price sensitivity by saying “what’s your cheapest
rate?” use a “bottom-up” approach by mentioning the lower-rated option
first, then referencing only the incremental difference for the next category
such as “For only $25 more you will receive…” When callers
convey a urgency and no price sensitivity, such as by saying “Hi, I want
to make a reservation…,” use a top-down approach to mention the higher-rated
categories first. With this method you can drop-down to the lower
categories if necessary; just be sure to reinforce that even the lower-rated
accommodations are still a good value.
Demonstrate the value received. Be as specific as possible. Rather
than saying “Deluxe rooms have a view,” say “In this room you can look
out your window and see…” Rather than saying “The concierge floor
has a lounge,” say “As a guest on this floor you’ll have 24-hour
access to our executive lounge, which includes…” Rather than saying
“This is a 600 square foot suite with a fully equipped kitchen,” say “Since
you’re traveling with your family, you’ll love having all the extra space
this suite provides. And the kitchen will be nice if you want to
make breakfast or bring back take-out one evening.”
Avoid making lower-rated options sound undesirable. This is
especially important when using a top-down approach, or when guests decline
the upsell offer. Be sure to reinforce the positives of the lower-tiered
rooms with statements such as “With this option you will still receive
all the same amenities and services…” or “Although this room is a little
smaller, it still has…”
Use personal recommendations that tie into their stated needs.
you’re traveling on business, I’d definitely recommend the executive level
rooms…” “Since you are traveling with a family, our suites would be just
perfect for you….”
When Upselling At Registration:
Reconfirm the pre-reserved accommodation; reassure the guest that they
already have a nice room. Avoid making the options they’ve already
selected sound undesirable and instead say “Mr. Johnson, we have you confirmed
in one of our ______ rooms, which I’m sure you will find quite comfortable…”
Probe to find out if the guest is aware of available upgrades with
statements such as: “Did your (travel agent or assistant) have a chance
to tell you about our ____ rooms?” or “May I ask if you are familiar with
Present the availability of upgrades as a unique opportunity by
saying: “We’ve had some of our ____ rooms open up this evening...” or “We’re
offering a special rate to help familiarize our (repeat or first time)
guests with our business suites...”
Utilize incremental sales techniques, especially since in their
minds the original room rate has already been paid. “For only $25
more, I can offer you one of our _____ rooms.”
Structuring Rates So That An Upgrade Is A Reasonable Value
Mention higher rates as a reference point to position lower rates as
being a good value: These rooms usually run _____, but
because of (special circumstance) I can offer you a special rate
Most properties market a range of rates to various market segments.
However, groups, high-volume accounts, or guests participating in special
discount programs, are only offered their special rate for the least expensive
room type. Upgraded accommodations, if offered at all, are at rack
rates. The end result is that the additional cost to upgrade does
not justify the value received.
For example, if the rack rates are $100 for a regular room and $135
for deluxe, a $35 difference seems reasonable. However, when a special
corporate rate of $79 is offered for the regular room only, the upgrade
fee, which is now $56, is effectively out of reach.
To work around this, many properties are implementing a “flat rate”
for upgrading. In this scenario, the guest always has the option
of upgrading for the same fee, regardless of what rate they qualify for.
So whether it’s a corporate, group, government, or promotional rate, the
investment for the upgrade is reasonable. Best of all, additional
revenue is created from rooms which might have been given away at lower
Recognition And Incentive Programs.
A key ingredient in any upsell program is to measure the results and
to implement a recognition and/or incentive program. Front desk upsell
incentives are especially easy to justify, as the upsell can be documented.
Reservations incentives are sometimes more controversial, because the possibility
exists that guests might have requested the upgrade to begin with.
If this is a concern, simply set a “quota” for upsells based on your current
trends. In other words, if reservations agents typically sell 5 suites
a week, then make that a quota and only pay out incentives on the sixth
upsell and beyond each week.
Most incentives reward the individual associate for each upsell, with
either a predetermined cash amount, with points that can be redeemed for
prizes, or perhaps with days off with pay. (Cash incentives should
be paid separately to help differentiate rewards from base salary.)
Alternatives are team incentives where everyone who works during a given
time period (i.e. shift, day, or week) is rewarded equally for upsells
which occurred during that period.
Regardless of which incentive program is selected, it is important to
post the results in a prominent area on a regular basis. This helps
spark the competitive spirit, and reminds all associates of the potential
to achieve the same rewards being earned by the top performers.
By focusing your front desk and reservation team’s attention on upselling,
by providing training on the tactics for doing so, and by measuring and
rewarding the results, your property can turn-on the faucet to this extra
revenue stream. Along the way, your guests will enjoy utilizing the
extra space, upgraded room features, and special services they might not
have otherwise considered.
Originally published at www.HotelWorldNetwork.com
||Doug Kennedy, President of
the Kennedy Training Network, has been a fixture on the hospitality and
tourism industry conference circuit since 1989, having presented over 1,000
conference keynote sessions, educational break-out seminars, or customized,
on-premise training workshops for diverse audiences representing every
segment of the lodging industry. Ee-mail Doug at: [email protected]