The hotel industry has been through a lot over the past 18 month time period due to the pandemic. However, it has shown a lot of resilience in adjusting to the new normal way of doing business. Occupancy rates most likely won’t be what they were pre-Covid for quite a while, plus hotels need to adapt to meet new guest expectations. The fact is, guests who are likely to travel now are craving an experience they’ve never had, with a newly found appreciation for the hospitality industry, now that they can travel again.
Hotels are now focusing on guest experience, and in turn, have found new ways to boost revenue. Upselling to your guests is crucial and there are plenty of opportunities to do it throughout their stay. Actually, contactless hospitality technology plays a major role in creating additional value for both hotels and guests. As we’ve already covered in our previous article on ways for hotels to benefit from contactless hospitality technology, contactless tech solutions create additional value for hotels in a way they capture guest data that can be used for email marketing and creating personalized campaigns & offerings whilst targeting guests at the right moment. It can be before they even walk through your hotel door, at arrival/check-in, during their stay but also after their stay. For example, something as simple as offering a room upgrade can help increase guest loyalty while increasing revenues at the same time. Automated room upgrades have so much potential for additional revenue so we are dedicating this article to room upgrades only and the facts of what they can do for your hotel operations.
How to use room upgrades to increase revenues?
Before you start implementing your room upgrade strategy to your guests, you should identify up-sell and room upgrade opportunities and make sure they are presented in an attractive yet not pushy way. The methods you use to upsell need to be handled with a degree of delicacy. The timing, tone, and regularity with which you upsell are vital to the success of your efforts. You don’t want to seem pushy so treat it as an exercise in awareness rather than a sales pitch. Make sure guests know what options are available to them but let them be the ones to initiate any further interest.
To start with, you should structure your room rates that upgrades seem to have a reasonable value. You need to figure out what a reasonable upgrade value for your higher room categories is and are you offering your guests a realistic or good value for the extra amount you are asking from them for a room upgrade? Try adding some extra value or lower down the upgrade fee for them to be able to see the difference. You should test it all then to see how they respond and if any changes to the strategy are required.
Next, update room descriptions and make room photos more attractive, i.e. keep your room details and descriptions up-to-date. One of the reasons why so many guests tend to book the lowest room category is caused by the lack of effective room descriptions and unattractive photos. Add some storytelling to your room descriptions, don’t just list down facts about the room. For example, try using words that are appealing and sentences that can make your guests picture themselves in the room.
It’s important to define your offer to suit guest preferences. Here are a few questions that should ask yourself about the room category chosen for your upgrade offer:
- What type of bed do guests want most?
- What type of view is the most requested?
- What amenities does my room have?
- What complimentary add-ons can I include to differentiate?
All of the stats are showing the same results – modern guests expect a unique travel experience that is largely influenced by personalization.
Room upgrades are a proven way for boosting revenue with each guest stay. If your hotel uses proper technology it requires minimal effort to be done effectively. Guests who book a standard room may be inclined to book a more luxurious room if they see an offer at a discounted rate. LasoExperience tools automate much of this process and boost your bottom line with little effort.
Let’s imagine that the guest is in your hotel, which means they are already yours, i.e. it is the most opportune time to upsell. The probability of selling to a new prospect is 5–20 percent, while the probability of selling to an existing guest is 60–70 percent. Having an automated online upsell/room upgrade system in place is the key here. Such systems allow hotels to offer their guests upgrade opportunities to higher room categories and allow hotels to sell add-ons. But as we said before, you need to make sure your offers are personalized and targeted to the right guest at the right time.
Case study Viceroy hotels room upgrades
Viceroy hotels have been using the LasoExperience contactless hospitality solution for quite some time. These are the outcomes our platform achieves:
- Capture contact details early - email, phone number, locations - potential to market out before stay directly
- Skip the line for guests - easy convenient process, just say "Hi" when entering
- Offload work needed by FD - data captured by guests already - process digitized
- Digitize process (compliance) and eliminate paperwork - handouts, GDPR, CCPA, capture guest preferences (e.g. like housekeeping), RegCard
- Fraud prevention - Guest ID verification (Know your guest), CC verification and authorization, detailed log of activity
- Capture revenues at the right moment - room upgrades, early check-ins, upgrade hotel packages
LasoExperience Guest Onboarding solution leads to new revenues from room upgrades and other offers. At Hotel Zetta, 11% of the guests doing digital check-in did the room upgrade too. These are new revenues that are captured as with our platform hotels capture guests coming from OTAs. Our offers engine works great because it is non-intrusive and goes seamlessly with the flow and offers are in front of guests at the moment they are most likely to decide to get them.
This is how investment into the LasoExperience contactless hospitality solution pays for itself directly.
”I was blown away with the experience of your digital check-in solution at Hotel Zetta.”
-- Darren Clark, Viceroy, VP of Technology
Takeaways
You need to think about the long-term benefits of upselling, in general, and room upgrades, in particular, that can have on your business. Upselling, cross-selling and upgrades work because guests have already made the most important decision: to buy. Adding another purchase that provides more value for our guests is much easier than trying to make the original sale. Taking a customer-first approach will serve to enhance your brand reputation, persuading guests to be more loyal as they grow to trust you have more than your bottom line in mind. Investing in hospitality tech does not only improves your business but also sustainably generates additional revenues.
