Upselling guide for hotels: how to create the perfect strategy (all the theory in 6 steps)

If you've been thinking of upselling as simply selling room upgrades, we want to make it clear that in this guide we'll be using the term upselling in a much broader sense.

While upgrades are an important part of the strategy, they are no longer sufficient to meet the diverse needs of today's guests.

Upselling in hotels is therefore a mix of 3 different sales strategies:

• Upselling: Offering a product or service in a higher category and at a higher price than the one the customer originally purchased. For example, a superior room instead of a standard room, or a fine wine instead of the house wine.
• Cross-selling: Suggesting a different but complementary product or service to the one the customer has already chosen. For example, breakfast or dinner in the room, late check-out, or a facial in addition to the massage already booked.
• Suggestive selling: Encouraging guests to purchase something they may not have considered when booking their stay. For example, the guest asks for directions to a walking tour of the resort, and the hotelier suggests that other guests have enjoyed renting a bicycle, leading them to consider the option.

Now that you know what it means to upsell, let's look at the 6 steps to implementing a strategy from scratch or improving the one you're already using.

The first step is a thorough study of your guests: knowing which customer categories are prevalent in your establishment and what their needs are is crucial to developing a successful upselling strategy and increasing satisfaction and loyalty.

But that's not all: your upselling offer can also be an excellent strategic lever if you want to capture the interest of a new customer category. For example, if your property has always catered to business travelers, you could introduce experiences and packages to attract bleisure tourists who are interested in combining work and leisure.

The best way to learn about your guests (current and potential) is to perform market segmentation using the data already available in your management software or CRM to identify them. To learn more, check out our practical guide to hotel segmentation.

At the end of the analysis, you may end up with a list similar to this one:

• Families with children: They value flexibility and accessibility the most. They prefer connecting rooms, babysitting and family-friendly activities.
• Couples: They want to share meaningful experiences. They opt for wellness trails, private tastings or adventurous sports experiences.
• Business travelers: They want maximum efficiency and comfort and are interested in early check-in and late check-out, fast Wi-Fi and airport transfers.
• Groups: They are are open to suggestions, look for organized tours and experiences that bring everyone together.

Once you have all of this data, you are ready to create your offer.

Deciding what services to offer your guests is easier than you might think: while having a spa or an onsite restaurant may make things easier, they are not essential features for those looking to upsell.

In fact, Booking.com's latest Travel Trends report reveals that most of the extra services guests are willing to pay more for are also the most traditional:

• breakfast (45%)
• guided tours and outdoor activities (26%)
• wellness treatments and sauna (25%)
• airport/city center transfers (25%)
• late check-out and early check-in (23%)
• nearby and secure parking (21%)

Based on the needs identified from segmentation, you can directly offer the additional services for which your property is already equipped. To expand your offerings, all you need to do is partner with external providers in your area, such as local travel agencies, restaurants or spas. This will allow you to offer a wider range of experiences and services and improve guest satisfaction without having to make significant investments in new infrastructure.

Did you know that 95% of our buying decisions are related to our subconscious mind? That's why, after you've researched your guests' needs, you should devote yourself to studying some basic psychological principles that will help you make offers that people can't say no to!

The most effective sales principles are:

• Empathy

To understand and anticipate what guests really want, you must focus on active listening, observing their behavior and collecting their feedback after they have used your services.

• Principle of reciprocity

This principle is based on the idea that if you offer guests something of value without immediate expectations, they will feel "obligated" to reciprocate. For example, offering a coupon for a discount on a service will not only entice them to try that service, but will also make them feel good about the rest of your offerings.

• Authority and credibility

Tourists rely heavily on positive reviews from previous guests. Make the most of reviews and, if possible, seek advice and recommendations from local experts for your restaurant or exclusive experiences.

• Scarcity

When guests perceive that an offer is limited, they are more likely to act quickly to avoid missing out. For example, communicating that certain packages or experiences are available only to a limited number of guests and are selling out can encourage an immediate purchase decision.

• Urgency

This is one of the most commonly used principles to drive sales because it encourages guests to purchase promotions or services within a specific - and narrow - time frame. An example of this is Amazon, which always includes a countdown of the time left to take advantage of the promotion.

• Timeliness

The best way to ensure the success of an upsell is to find the right time to offer it. One suggestion is to take advantage of times when customers are mentally ready to transact and therefore more open to considering additional purchases.

To learn more about the psychology of upselling in hotels, check out our article on the most effective psychological techniques for upselling.

To make your upsell even more compelling, it is important to spend time creating a narrative that will capture the imagination of your customers.

This will not only enrich your website with quality content (which is also important for search engine rankings), but it will also give your staff the right cues on how to suggest products and services to guests.

Here's how to do it:

• Create original descriptions

Avoid empty and overused phrases and focus on authentic and detailed text that reflects the true essence of what you offer. For example, instead of writing "Luxurious rooms with a view," describe the experience by saying, "Imagine waking up each morning to the ocean view directly from your king-size bed, and preparing for a new day by moving into a space designed just for you, refined yet equipped with every modern convenience.

• Add high-quality images and video

Allow guests to visualize and anticipate the experience. A video tour of the rooms, details of the spa treatments, or images of the experiences on offer can make all the difference in capturing your guests' attention.

• Highlight value

Define what the true value proposition is for each customer segment you are targeting with your ancillary services. If you're promoting a spa package, highlight how a rejuvenating massage is perfect for business travelers looking to unwind after a busy day, while a couples treatment can create precious memories and strengthen bonds by offering a shared moment of wellness.

• Always include customer testimonials

Adding real testimonials from those who have already enjoyed a service or experience will serve to provide more detail and reassure potential customers about the quality of the offering.

To make sure you don't miss any sales opportunities and consistently provide the best service to your guests, you can introduce upselling at every stage of the stay: before, during and after.

In fact, each stage offers specific benefits:

This is the phase before the stay. Specifically, it is the period between booking and check-in. It allows you to:

• differentiate yourself in the marketplace,
• increase RevPAR
• improve inventory management
• and reduce the risk of no-shows and cancellations.

This is the phase that encompasses the entire length of the stay. It is useful for:

• responding to guests' needs in real time
• creating new spending opportunities
• maximizing RevPAR in high season and optimizing it in low season.

It uses the information and feedback collected during the previous stages and aims to:

• build loyalty
• encourage word of mouth
• and encourage future direct bookings.

To understand how to introduce your offer of additional services and products at each stage, at the end of this article you will find a guide with our tips and methods for upselling.

While hotel upselling revenue has been estimated at 10-15% of total revenue until recently, the growing use of upselling automation software is expected to increase this percentage to 29% of total revenue.

The reasons why more and more hoteliers are choosing to use technology to implement upselling are related to the numerous advantages of this approach:

• Sell even when you are not there

Software allows you to sell ancillary services even when you are not physically present at the property or do not have a dedicated staff. This gives you the opportunity to implement upselling strategies even for non-hotel accommodations such as B&Bs, short-term rentals, vacation homes, and room rentals.

• Sell with ease

Software takes the pressure out of direct selling, allowing you to sell even if you're not comfortable doing so in person. It also eliminates the need to constantly update your brochures and fill your rooms with flyers. A smartphone or tablet is all it takes to view your entire inventory.

• Give guests freedom

With software, your guests can explore your establishment at their leisure, before and during their stay. They can read detailed descriptions and reviews, and make their own purchase decisions directly from your platform.

• Stay in control

A software allows you to control all sales from a single interface, eliminating the forgetfulness and errors of manual management.

Now that you know what steps to take to create your upselling strategy, it's time to apply it to each stage of your guests' stay.

But how do you move from theory to practice? To answer this question, we have prepared an upselling kit with techniques, tips and practical examples for the phases before, during and after the stay.

Download it now!