Boost Room Revenue By 50% With Upselling At Check-In

Dear Hospitality Leader,

In the competitive world of hospitality, every dollar counts, and maximizing revenue per guest can mean the difference between stagnation and skyrocketing profits.

While most hoteliers focus on occupancy rates, the real magic lies in a hidden goldmine: upselling at check-in. In fact, industry reports show that hotels leveraging upselling strategies can increase room revenue by 50% or more, without adding a single room or incurring extra costs.

The Upselling Opportunity

Upselling, in its simplest form, is the practice of offering guests upgraded experiences or amenities at an additional charge. This can range from room upgrades to adding services like breakfast, spa packages, or late checkout.

According to a study by Revinate, hotels that actively use upselling strategies see an average increase of 18-20% in incremental revenue per guest.

A 100-room hotel with an average daily rate (ADR) of $150 could mean an extra $3,000 per day or more than $1 million annually in additional revenue—all without needing to attract more guests.

Real-World Examples

Let’s dive into how this works in practice.

The Mandarin Oriental, Las Vegas, is a prime example of how effective upselling can lead to massive profit gains. By offering their Deluxe Strip View room upgrade at check-in for $75 (originally priced at $150), they not only fill their premium rooms but also generate additional revenue from guests who might not have chosen to upgrade during the booking process.

This strategy helped the hotel increase its room revenue by 35% in the first quarter of 2023, despite a 2% decrease in occupancy.

Another standout example comes from Hilton Hotels, which uses an automated upselling tool integrated into its booking system. Guests are offered upgrades for things like room views or premium floor access via email after booking but before check-in.

This process led to a reported 15% increase in revenue per booking across Hilton’s properties worldwide.

The beauty of upselling lies in its simplicity—guests are already committed to staying, so offering them additional perks during check-in (when they’re in the mindset of enhancing their experience) significantly boosts the likelihood of an upgrade.

The Numbers Behind Upselling

The numbers are compelling. A study by the Cornell School of Hotel Administration revealed that a properly executed upselling strategy can generate anywhere from 5% to 50% in additional room revenue, depending on the property's location and customer base.

Furthermore, the same study noted that 20% to 30% of guests are highly likely to accept an upsell offer, especially when presented with a discounted upgrade option.

To break this down:

• 10% of guests accept room upgrades.
• 20% to 25% of guests opt for add-on services like breakfast or spa access.
• 15% to 20% go for late checkouts or early check-ins.

For a mid-sized hotel with 150 rooms, an ADR of $175, and a 70% occupancy rate, if just 15% of guests accept a $50 room upgrade, that’s $787.50 in extra revenue per night. Over a year, this translates to $287,437.50 in additional revenue—again, with zero increase in costs.

The Psychology of Upselling at Check-In

The reason upselling at check-in works so well is rooted in consumer psychology. When guests arrive at the hotel, they are excited about their stay and are often more willing to indulge themselves in extras, especially if they are presented as discounted or exclusive offers.

Consider this: The Radisson Blu Hotel in Berlin ran a year-long trial where front desk staff were trained to offer guests room upgrades for a discounted rate at check-in. The staff was incentivized with bonuses for each successful upsell.

The result?

A 22% increase in revenue from room upgrades alone, contributing to a $2.5 million boost in total revenue by the end of the year.

Guests felt they were receiving a personalized offer, and the staff had a direct incentive to increase hotel profits.

How to Implement a Successful Upselling Strategy

1. Train Your Front Desk Staff: Upselling starts with your team. Front desk employees should be trained not only in offering upgrades but also in reading guests’ body language and determining when is the best moment to pitch. Offering a smile and suggesting a small indulgence can go a long way. The Marriott International reported that after training its staff in upselling techniques, its properties experienced a 30% increase in guest acceptance of upgrade offers.
2. Use Data to Personalize Offers: Thanks to modern booking systems, hoteliers can access a wealth of data about their guests. Use this data to tailor upgrade offers. For instance, if a guest frequently books spa packages or prefers higher floors, your front desk can offer those exact upgrades upon arrival. Accor Hotels uses this technique and has seen upsell conversion rates soar to 40%.
3. Automate the Process: If personal interaction isn’t possible, use automation. Tools like Oaky and UpsellGuru allow hotels to send upgrade offers to guests via email or text before they even arrive. Hotels using Oaky have seen a 45% boost in incremental revenue, simply by automating the upselling process.
4. Create Irresistible Offers: A well-priced offer is key. Guests are more likely to accept an upgrade if they feel they’re getting a good deal. Offering a $200 suite for $75 at check-in is far more enticing than offering it at full price during the booking process. Remember, the goal is to fill your premium rooms without cannibalizing your base rate.
5. Track and Adjust: Finally, track the results of your upselling efforts and adjust as needed. Experiment with different upgrade packages, offers, and pricing to see what works best for your guests.

Conclusion

In a time when operating costs are rising, and competition is fierce, upselling at check-in is one of the most powerful and cost-effective strategies for boosting room revenue.

From luxury hotels in Las Vegas to mid-range properties in Berlin, the numbers show that even a small increase in upsell acceptance can lead to substantial gains.

By training your staff, using data, and crafting irresistible offers, you can unlock a revenue stream that will help your property thrive without the need for additional costs or complex marketing campaigns.

If you're ready to tap into this revenue-boosting strategy, the only question left is: are you maximizing the potential of your front desk?

Stay well! Swim strong!

Warmly,

David

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? Published by: David Vogel, in Wolfeboro, New Hampshire

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