Upselling – An Overlooked, Easy Route to Extra Hotel Revenue, by Denis Severyuk

It can be easy to fixate on filling up rooms and forget that there's a treasure trove of untapped revenue that requires almost zero investment.

Now, let's explore your new route to extra revenue.

💬 Technology is changing upselling in hotels

Technology has changed everything about how hotels do upselling. With property management systems, you now have easy access to invaluable data about guests' preferences and can customize deals and packages accordingly.

When the pandemic hit, hotel owners relied on tech to survive, which led to growth in this sector. Now, to beat competitors and succeed, you need a fresh strategy. One big part of this is upselling your guests with deals that combine rooms and extra services. For example, you could offer a ride to and from the airport with a room booking, or create "bed and breakfast" deals.

In terms of reach, an online booking engine and front desk system can fully automate the process of upselling. You can, via your website, gain full control of the booking process and effectively introduce guests to packages, services, and other add-ons just before they pay for their booking.

Or, using push notifications in mobile apps, hotels can engage with guests at times when they would be most receptive to our services or promotions. It could be informing them of a happy hour at the hotel bar or reminding them of the option for late checkout on their day of departure.

💬 The true value of packages for hotels and guests

Upselling is all about giving your guests a chance to make their stay easier, more luxurious, or fun.

If you look from a broader perspective, hotel packages are more than just a way of growing revenue. We've seen that customers appreciate the added value they get from bundled services. For the guests, it's a chance to experience new services at a manageable cost and broaden their hotel experience.

When you offer a room with a stunning view, spa services, or special dining packages, you make a guest feel like a priority. When guests feel like their needs are prioritized, they return to you more often and recommend your hotel to friends and family.

This is how you build customer loyalty. Guests appreciate these personalized offerings and are more eager to spend on services that enhance their stay. In fact, the numbers show that satisfied guests spend at least $185 more per stay than those less engaged. This is how you maintain a steady revenue stream even when bookings are low.

💬 Hotel packages vs Regular bookings

A well-crafted package often lures guests to indulge a bit more than their initial plan. Here, you just need to strike that perfect balance between an attractive offer and a profitable outcome.

Let's take an example of a hotel that offers a room at $150 a night. Now, alongside this regular booking, it introduces a package deal for $200 that includes the room, a complimentary breakfast, free spa services, and a guided city tour. The actual cost to the hotel for these additional services is minimal compared to the extra $50 they're charging.

Such a deal shows guests that they're getting more value as the perceived worth of these additional services is much higher than the extra $50 they are paying. Once they have booked the package, they're likely to spend more time using the hotel's services (like dining in the hotel restaurant after the spa service) rather than wandering to other places in the city.

💬 Personalized experiences are still on the rise

The focus is shifting towards personalized and experiential packages. What we've also observed is that guests appreciate packages that are based on their personal preferences and needs.

In the hospitality industry, there are usually two types of strategies to enrich the guest experience, upselling and cross-selling. Upselling includes additional offerings within the hotel premises. These could be a room upgrade, a late check-out opportunity, pet facilities, or valet parking.

On the other hand, cross-selling goes beyond your hotel amenities, since you are partnering with local businesses to expand your offerings without any new investment. This way, hotels can enrich their guest experiences highly affordably. Cross-selling includes city tours, arranging for wine-tasting sessions, transport to the airport, or bicycle rentals, and is consistently popular with guests.

Trends are also shifting towards packages that are structured around unique experiences or sustainability-focused activities. We've seen guests respond positively to these initiatives.

💬 Start upselling without annoying your guests

Well, this is a fine art! In HotelFriend PMS, we've strived to make it a more organic part of guest interaction, and discreetly offer personalized upgrades or add-ons at different touchpoints. Using customer data, we're able to automate and contextualize offers, ensuring they are relevant, timely, and convenient for guests.

We also emphasize the importance of training your staff to approach upselling from a place of empathy, offering extras that will genuinely benefit the guest and enhance their stay, and making it a natural extension of hospitality service.

Check-in is an ideal moment to propose room upgrades and additional amenities, especially if the guest didn't opt for them during the reservation process. Your front desk agent could simply suggest, "With only an additional $20, you could enjoy a room with a fabulous view of…".

When we put guest satisfaction first, they tend to become more loyal, appreciating that each time they book, they'll be presented with services that will boost their stay experience.

💬 Finding your successful strategies that work

Some of our clients have shared methods they use to upsell, and there's a lot we can learn from them.

Instead of jumping directly to the sales pitch, they begin by asking open-ended questions to understand a guest's needs and preferences. Which, in turn, helps present potential upgrades as unique opportunities tailored to the guest's needs.

It's also crucial to let the guest guide the conversation. If they show further interest, you know there is room to offer more. Remember, that the success of your upselling techniques largely depends on tactful timing, the right tone, and how often you present these opportunities.

To stay receptive to guest inquiries around the clock, some hotels also employ chatbots as a point of contact. This means that potential guests can explore options whenever they want.

💬 The role of AI and Big Data in the future of upselling

I believe the future of upselling is even more exciting. We’ll see more personalized, on-the-spot upselling moves made possible by data analytics and machine learning. Technology will make it a more integral and effortless flair of the guest's hotel experience.

Take the advancement of AI in predictive analysis, for instance. AI can analyze guest data to predict their preferences and behaviors. Hotels could use these insights to offer tailored packages and deals.

For example, a hotel could promote a 'Family Fun Package' including a room, tour tickets to a popular local family attraction, and special kids' meals at their restaurant to a family who frequently travels during school holidays.

Big Data can also be harnessed to understand various market segments on a deeper level, which in turn helps in creating more targeted upselling strategies. If analysis revealed that younger guests are more spontaneous and likely to buy last-minute upgrades, hotels could target push notifications about available room upgrades or experiences to this segment upon check-in.

One piece of technology that is already changing the upselling in hotels is digital self-service kiosks. During the self-check-in process, a guest could be offered an upgrade to a suite at a discounted rate. Or, they might be given the option to purchase add-ons such as late check-out, spa treatments, or breakfast. All this significantly increases the chance of securing that extra sale.

💬 Emerging markets to pay attention to in 2025

There are quite a few rising trends hoteliers should keep an eye on.

For instance, there's a surge in environmentally conscious travelers. They prefer sustainable travel experiences. So, eco-friendly packages, with options like local eco-tours or organic meals, could be a big hit.

Next, more people are working remotely now, which has given rise to a group of 'digital nomads'. To attract them, you can offer packages with fast internet, comfy workplaces, and shared working spaces.

With mental and physical health being a major concern, wellness tourism is also on the rise. Hotels could offer services like yoga classes in the room or meals that promote healthy eating.

The variations are endless, just like your imagination. However, effective upselling isn't solely about jumping on the latest trends. Truly understanding your guests, their desires, pain points, and needs, is key to success.

💬 Advice for hoteliers looking to improve

If you want to do better in your strategy, I have three tips. First, know your guests really well. Find out their likes and dislikes so you can make great offers for them.

Second, make sure your offers are personalized or catered to individual guests. Everyone is different and your offers should be too. Technology can help with this.

And third, spend time training your team to upsell properly. They are the ones who'll be talking about these deals to your guests, so they need to do it well.

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