Upselling and cross-selling are both extremely valuable strategies in the hotel industry, and this has been the case forever.
These two methods work well across most industries — in fact, research suggests that the probability of upselling and cross-selling to existing customers is 60-70% versus the probability of landing a new customer.
In other words, upselling and cross-selling, done right, is easy money, much easier than attracting and acquiring new customers. It’s also a way to improve your guests’ experiences and go above and beyond with the services you offer.
In this article, we’ll explore why upselling and cross-selling is so useful for hotels and how you can tap into technology to get the most out of these strategies.
Understanding upselling and cross-selling for hotels
Let’s start by defining upselling and cross-selling and how they differ from one another:
- Upselling is when you encourage a customer to purchase a higher-end (more expensive) product or service than the one they originally considered. For example, if a guest books a regular room you can offer them a deluxe room for a slightly higher rate.
- Cross-selling is where you offer a customer additional services and products on top of what they’re already buying. For example, if a guest books a room you might offer them a taxi service or a dinner reservation.
Upselling and cross-selling can be incredibly powerful tactics when used by hotels in the right way. They can result in higher revenue, better customer experiences, and a more sustainable and profitable business.
Ways for hotels to upsell and cross sell
So what are some of the main ways hotels can implement upselling and cross-selling? According to a report by GuestJoy, these are the top three options in terms of revenue generated:
- Wellness activities like spa sessions and massages were responsible for a third of all upsell/cross-sell revenue
- Room upgrades generated 23.8% of revenue and were seen as the easiest way for hotels to make upsells
- Restaurants (17.5%)
While this is a good general overview, it’s worth noting that there are differences between regions, hotel types, and seasons. For example, guests of smaller hotels were most likely to purchase taxi services as a cross-sell, making up 45% of purchases for this sector.
The role of technology in upselling and cross-selling
In recent years, the hotel industry has experienced radical digital transformation.
Technology can enhance many aspects of the guest experience and deliver much more rewarding, satisfying, and smooth hotel stays. It does this by providing more personalized experiences, making booking easier, and helping hotel staff manage their properties and reservations more easily.
Let’s explore some of the ways hotels can use technology to drive more upsells and cross-sells with some of Hotel-Spider offering.
A channel manager is primarily designed to boost your hotel’s presence across multiple third-party channels and OTAs.
It can help you drive more upsells and cross-sells by ensuring your offers are packaged and ready to share easily across multiple channels. It helps maintain pricing and offer consistency, and ensures your upsell offers reach their intended audience at all times.
Streamline operations with a Central Reservation System (CRS)
Your Central Reservation System is built to manage and streamline reservations, making it easier for you to handle all your guests and ensure they get the best, most friction-free service possible.
When it comes to upsells and cross-sells, the main benefit of your CRS is personalization. By drawing on the data about your guests stored in the CRS, you can put together tailored upsell and cross-sell offers, boosting your chances of success while delighting your customers with offers that appeal specifically to them.
Maximize revenue with a Booking Engine
A Booking Engine allows you to construct the booking process in exactly the way you want it, gaining much more control over what your guests experience when making a reservation.
This means you can present upsell and cross-sell opportunities in the best possible light, at just the right times. You can personalize offers based on guest data, include high-quality images and descriptions, and present optimally attractive bundle packages to your guests.
Best practices for efficient and scalable upselling and cross-selling
Now it’s time to recap a few key best practices to follow when implementing upsells and cross-sells in your hotel.
- Know your customers. Upsells and cross-sells work best when they deliver offers that your customers already want. If you understand your guests well and have access to useful data on their preferences and habits, it’ll be much easier to create attractive and high-converting upsell and cross-sell offers.
- Monitor and adapt as needed. Your upsell and cross-sell strategy will certainly change over time in accordance with your guests’ preferences, the season, and the travel market as a whole. Make sure to regularly review your upsell and cross-sell strategy, perhaps with ongoing meetings, to make any necessary adjustments.
- Integrate all your tech solutions seamlessly. The hotel tech solutions we talked about in this article work best when they’re fully integrated with each other and your hotel’s overall tech stack.
This last point is where Hotel-Spider comes in. We offer a suite of solutions including a Booking Engine, Channel Manager, and Central Reservation System all in one platform.
We make it easy for you to connect with customers, build and present upsell and cross-sell packages, and grow your hotel confidently and confidently.