How to Drive Profit Through Better Upselling

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Overview

Upselling has been around for a long time. From airlines to eCommerce retailers, all kinds of businesses use upselling to enhance the customer experience and maximize their share of the consumer’s wallet. Upselling has also existed for decades in the hotel industry – albeit in a more rudimentary form.

Many hotels treat upselling as a trivial add-on, and it likewise performs as one. Part of the reason for the lack of hotel upselling effort is the unique operating model of hotels. Upselling has always seemed operationally challenging for hotels because room inventory usage is poorly forecasted in advance and then managed manually on a day-to-day basis. Hence, upselling was never really looked to as a regular source of revenue – until now.

COVID-19 has made hotel profitability a big challenge. More than 18 months into the pandemic, hotels continue to experience low occupancy rates. Many premium rooms and suites remain empty. With limited guests (and limited labor resources), hotel owners and asset managers are forcing hotel managers to be more sharply focused on increasing asset profitability.

The good news is that upselling is one of easiest avenues to drive incremental high margin revenue. While, in concept, the goal of upselling remains the same, in practice, automation and intelligent algorithms have made it more efficient, more profitable, and operationally reliable.

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