During hotel check-in now may be the best time to upsell

Consider Your Strategy When Planning Pricing Tiers, Sales Pitch

In recent years, more and more hotels are utilizing pre-arrival drip campaigns offering guests the opportunity to purchase an upgrade prior to their arrival, which is certainly a smart move.

However, these days the challenge is that all the other travel companies have the same basic idea, to the point where the guest’s inbox is flooded with such promotions. As a frequent business traveler whose main hobby is leisure travel, I know this firsthand.

You’ve got your airline sending emails about upgrading to premium seating or first class. Your rental car company sends an offer to book a luxury car. If you book on a third party, you’ll get emails about adding on “experiences” such as tours and excursions. If you use a rideshare service, the app offers the option to upgrade to their paid monthly membership program. On top of all that, many hotel brands send pre-arrival messages pushing you to download their app or join their loyalty programs.

Now, imagine that the traveler is stringing together business meetings or sightseeing in a few different cities all on one trip, in which case all the above messages are received for each leg of the journey. For me, it’s to the point where I immediately swipe left to delete before I even open to read them.

As much as some hotel brands are pushing self-check-in, from what I see in hotel lobbies, there are still plenty of guests of all ages who want to do it the old-school way and check-in with a live person. So maybe it’s time to revisit the topic of upselling with your team.

Obviously, hotels offering a diversity of accommodation types — room, suite, executive floors — along with those offering premium views, have the most potential upside with an upsell program. Yet hotels consisting of a homogeneous inventory, such as limited-service and all-suite properties, can still create unique room attributes that justify a rate differential. Examples include upgraded sleep comfort, such as dream mattresses and high-thread-count sheets; snacks and beverages, such as a mini fridge filled with sodas, snacks, flavored waters or premium coffee; or bathroom/beauty amenities.

However, even beyond room attributes and accommodation types, there are other opportunities to upsell at registration that apply to all hotels on a “space available”/off-peak basis:

• Early check-in fee. Example: Check in at noon for an additional charge.
• Fee for late check-out. Example: Check out at 5 p.m. for an additional charge.
• Discounted rate to add a second room that is connecting or adjoining at registration to an existing reservation, which could be 50% off for the second room. If only offered with advance reservations, this is automatically a “fenced” rate. Given that it is done on the day of arrival when the room inventory is otherwise certain to “perish,” an attractive discount makes sense.

In summary, the first step in implementing an upsell program is to identify the upsell opportunities that best fit your inventory and operations.
Next, hoteliers need to identify a rate structure that makes upgrades a reasonable value. Most properties market a range of rates to various market segments. However, groups, high-volume business-transient accounts or guests participating in special discount programs are typically only offered the special rate for the least expensive room type. Upgraded accommodations, if offered at all, are at top-tier rates. The end result is that the additional cost to upgrade does not justify the value received.

For example, if the top-tier rates are $200 for a regular room and $250 for a deluxe, a $50 difference seems reasonable. However, when a special corporate rate of $165 is offered for the regular room only, the upcharge for the next category, now at $85, seems a bit steep.

To work around this, implement a “flat rate” for upgrading to the next highest category. In this scenario, the guest always has the option of upgrading for the same fee, regardless of what rate plan they qualify for. So, whether it’s a corporate, group, government or promotional rate, the investment for the upgrade always seems reasonable. Best of all, additional revenue is created from rooms that might have been given away at lower rates anyway if the hotel instead oversells the lowest room types.

After identifying the upsell opportunities that match your inventory and operational constraints, it’s time to conduct training to expose the front-desk team to the various techniques and tactics.

Here is an overview of the components from KTN’s on-site upselling training workshops.

• Always reassure the guest that they already have a nice room. Otherwise, the attempt to upsell might diminish the value of what they have already “bought.” Example: Instead of saying “Right now we have you in our standard room, do you want something nicer?” train the team to say “Mr. Johnson, we have you confirmed in one of our traditional rooms, which I’m sure you will find quite comfortable…” then continue on to ask if they are aware of or interested in upgrades such as below.
• Another example is: “Our check-in time isn’t until 4 p.m. and it’s only 10 a.m., so check back later.” Instead say, “Ms. Perez, I know it’s early, and our official check-in time is 4 p.m. We’ll do our best to get you access to the traditional room category as soon as possible. However, we did have a deluxe room that was vacant last night and is open now for an additional rate of $35. Does that interest you?”
• Utilize incremental sales techniques. When a guest has an advance reservation, in their minds, the original room rate has already been paid. This is even more true for those who booked online at most OTA websites where they actually have pre-paid. Therefore, reference only the additional investment. “For only $25 more, I can offer you one of our _____ rooms.”
• Demonstrate the value received. At check-in, the front-desk staff can be as specific as possible because they know exactly what rooms are left. Rather than saying, “Deluxe rooms have a view,” say, “In this particular room you can look out your window and see…” Instead of 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.”
• Use visual aids. Many hotels are finding it helpful to display digital picture frames flashing photos of actual rooms and suites. You can also drop in a slide with copy that reads: “Ask us about our upgraded room options.”

Measuring and Incentivizing the Results

A key ingredient in any upsell program is to measure the results and implement recognition and/or incentive programs. Front-desk upsell incentives are especially easy to justify, as the incremental upsell revenue can be measured by the “rate change” reports from property management systems. Reward the individual associate for each upsell, with either a percentage of the upsell revenue or a predetermined cash amount. Cash incentives should be paid separately to help differentiate rewards from base salary.

If you cannot get approval for a cash incentive, use a system where points are earned and can later be used for rewards such as gift cards or days off with pay.

By focusing your front-desk team’s attention on upselling, 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.

Doug Kennedy is president of the Kennedy Training Network, Inc. Contact him at doug@kennedytrainingnetwork.com.

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