Importance of Upselling and Cross-Selling in the Hotel Industry
As a hotelier, you are quite aware of improving the quality of your rooms and associated services to attract more potential guests to your property. But, do you know that you can increase the order size and the amount you earn by following certain techniques? The established hotel businesses deep into online operations and modern technologies must be aware of it. But, there are still many micro, small and medium hotel businesses that must leverage the maximum potential out of upselling and cross-selling in the hotel industry.
If you are one of the new hotel businesses, these techniques will be your next big evolution in executing business operations and bagging more profits.
Upselling and cross-selling help you convince potential guests to upgrade their existing preferences or buy add-on services for a better stay experience. In return, that helps you bag more profits from a single guest.
To get more insight into its importance, you must keep reading and exploring the key benefits of utilizing these two techniques.
Understand the Difference Between Upselling and Cross-Selling in the Hotel Industry
Before directing you further into this article, you must get a glimpse at how to differentiate these two techniques from one another.
Upselling is the technique where you are advertising or marketing an upgraded version of a specific room or service. Here, you are letting your potential guests know they can get more value for their choice of room or services by paying a minimal extra amount. For instance, suggest your guest upgrade to a suite from a deluxe room at minimal extra pay.
Cross-selling is the technique of promoting an additional service that the customer can buy to enhance the stay experience. It is used in many strategic ways to keep the flow of sales for recreational services and activities for a hotel. You can suggest your guests bundle spa services, sightseeing activities, meal plans, and other services to help them with a memorable trip experience.
Best Time to Cross-Sell and Upsell
Upselling and cross-selling in hospitality industry are all about timing! If you cannot time the implementation, then your efforts might go in vain. So, when is the right time to upsell and cross-sell? Let’s find out:
Ideal Time to Upsell
The best time to upsell a product is at the booking stage. It is when your channel manager and booking engine will be put to the test. Channel manager and booking engine are automated inventory management solutions that can help you upsell your products to potential guests across your direct and indirect distribution channels.
Upselling is important when you are sure of the fact that the customer needs additional features with the selection they did. You need to pre-set your bundles or keep collecting data on what services are most demanded with particular room selections.
When the guests are in pursuit of making their reservations, your booking engine or channel manager can upsell the upgrade options or add-ons by stating the affordability factor on priority. If the additional price seems nominal to the guests, they will take the offer, and you will have an even bigger order size.
Another best time to upsell an upgrade to guests is immediately after they have completed their bookings. Send them emails with details of the upselling upgrade that you suggest for them. Let them know that you will do the needful to make the upgrade, and the additional charges can be paid off at the hotel.
Finally, if you have missed all of the above chances to upsell for any of your guests, you can try it out during check-in. Show them the special offers and upgrades for a better stay at a nominal price.
Ideal Time to Cross-Sell
The best time to cross-sell for hotels is after the guests have booked with them, but before they reach the destination for a check-in. You can upsell and cross-sell your services together after your guest has booked the stay with you. They don’t need to know the variety of techniques you are using, so send a single email with all upselling and cross-selling suggestions.
Cross-selling is best recommended when your guests have made a purchase, the experience of which can be enhanced with paid complementary services. For instance, you can market your additional hotel services such as spa treatments, salon makeovers, fun activities, and outdoor activities.
You can even cross-sell the complementary services to customers when they check-in. You have the entire plan of their stay and probably the itinerary if your partnered trip organizers are involved with it.
Even if you don’t have their itinerary, you can humbly ask for it. Suggest a special event pass, complementary or a sightseeing activity on their leisure days. If you help them utilize their trip in the best ways possible, they will surely invest in it.
Upselling Strategies for Hoteliers
You need to amend the functionality of your booking engine or channel manager to follow the upselling strategies or techniques to draw more profits from a single booking. Some of the practically tested strategies include:
- Incremental Pricing- It is human psychology to find low price tags more appealing than big numbers. So, when you are upselling through your booking engine or channel manager, make sure you tell the incremental price of the upgrade and not the actual one.
- Pitching Best Features- Here, you must pitch the best features of upgrades that you plan to suggest to your potential guests. Use photographs to show the difference between what the upgrade has against their selected option. Highlight only the best features.
- Promote Discounts- If some of your upselling products can be discounted, it would attract more attention from the guests. Tell your customers the original price of the upgraded room, and put up a discount especially for them if they are willing to upgrade. And that will do the job for you to attract their attention.
Cross-Selling Strategies for Hoteliers
Just like upselling, you have certain strategies to perfect your cross-selling techniques as well:
- Time it Right- As stated above, you should time your cross-selling approach perfectly after they have booked with you. Suggesting the add-on service options to customers when booking will make it cluttered for them. Eventually, they will be overwhelmed and might decide to consider other options.
- Ask for Reviews- The customers who bought your cross-selling products and are satisfied with the services, you can ask to leave a testimonial or review on the website. You can send links to those reviews to your guests through email to help them decide.
- Prepare Bundles- You should make a few service bundles that you observe have higher demand than others. For instance, make a bundle of your luxury suite with complimentary spa service, and quote a nominal price. Your guests might prefer to pick the ready bundles than make their selections.
Get Started by Integrating a Booking Engine and Channel Manager
Suppose you are convinced that upselling and cross-selling in the hotel industry are two important techniques to help your business earn a good profit. In that case, it is time to take the first step and integrate a booking engine and channel manager into your property management system.
As cross-selling is more like an after-booking technique, you will need these two tools mandatorily to upsell most of your room upgrades and small add-ons in correlation with the selected options that will add value.
AxisRooms is one of the most reputed providers of these automated tools, and you can check our website to learn more about these individual integrations. We can help you with a demonstration to help you decide on its integration.