SPECIAL REPORT : UPSELLING the prolonged downturn , “ heads in beds ” was the singular objective across much of the hotel industry . Now , with rate compression easing and occupancy levels stabilizing , the art of upselling is gaining renewed buzz among hoteliers .
Effective upselling can be a significant source of incremental revenues , but advocates of the practice say its real big-picture value lies in its use as a guestsatisfaction tool . When upselling is done with the guest ’ s overall experience top of mind , and not just for the sake of grabbing a few extra dollars , it can serve to elevate the guest ’ s entire stay . A satisfied guest is a guest who will return and who will post glowing reviews online , earning the hotel stronger ADR and initiating a cycle of soaring RevPAR .
“ As an organization , our philosophy is not to upsell as an extra revenue stream , but rather to add value to the guest ’ s experience ,” says Sian Griffiths , director of marketing communications for The Peninsula Hotels , Hong Kong . “ While we do believe upselling is a good opportunity to increase revenue , this strategy must be approached very carefully , as we do not want to be perceived as taking advantage of our guests and their expectations for their stay .”
The upselling program across the portfolio of Fairmont Raffles Hotels International , Toronto , calls for extending offers at four guest-interaction intervals : time of reservation , prior to arrival , at check-in and then throughout the stay . “ We find that by taking advantage of upsell offerings , our guests have a more fulsome and positive experience at our hotels ,” says Jeff Senior , Fairmont Raffles ’ executive vice president and chief marketing officer .
Throughout the hotel industry , relatively few guests book rooms beyond the standard tier . This is primarily a function of consumers ’ eagerness for bargains when planning travel , and is not always reflective of their willingness to spend once on property . Many guests are willing to pay for enhanced value , but only if the value proposition is made clear and often only if the option is presented .
“ Resorts are the sector of the industry that has really perfected this ,” says Bob Gilbert , president and CEO of Hospitality Sales and Marketing Association International . “ If you have a blended family , or three couples arriving or the grandparents and parents coming together with the kids … to be able to upgrade them to a suite or a villa concept , you ’ re certainly enhancing their experience .”
The leisure properties of Honolulubased Outrigger Hotels and Resorts have a wide array of room types , but the pricing range is relatively compressed . That is by design , says Elizabeth Cambra , vice president of pricing and revenue , because it protects rate integrity without making premium room tiers unaffordable to the average guest . She considers an abundance of front-desk upselling as a sign that rack rates need to be adjusted . “ We want people to see the value at time of booking . Instead of booking an entry category , we want them then and there to buy ” a higher room type , Cambra says . “ It ’ s important for properties to make sure they ’ re not pricing things for ego or
www . hotelsmag . com April 2014 HOTELS 21