After several years of solid RevPAR growth, most hotels are now seeing the increases slow.
Of course each market is different, but this leveling off seems to mostly be due to an inability to push rate due to a flood of new hotel inventory as well as alternative lodging such as private rentals like HomeAway and Airbnb. Therefore, it is a wonderful time to revisit the topic of upselling with your front desk and reservations colleagues.
First, it is important to define upselling by accommodation type vs. upselling by rate. To avoid confusion, I prefer to refer to the later as rate optimization, which I will address first.
Too often when our KTN team mystery shops new clients, I still hear reservations agents offering discounts at the start of their calls before they are asked to do so. In other words, while asking for the dates, number in the party and for bedding preferences, they routinely ask “Do you have any discounts such as AAA or AARP?” This unnecessarily erodes ADR by extending lower rates to those who would otherwise not have asked. Likewise, front desk agents ask this question of walk-in guests even when they are not asking for a discount.
In an effort to compete with OTA’s, many hotel brands have been moving towards offering advance purchase, non-refundable rate options. However, reservations agents have not been trained to first qualify the caller to determine if they are interested in this option. Therefore, they provide both the “flexible” and “advance purchase” rates for all room types, which makes it confusing for the caller and time consuming for the agent. Or more likely, many agents seem only to be quoting the two rate options for a single room category – not even mentioning the others – all the while thinking they are “upselling.”
Instead, agents should be first explaining the terms of the advance purchase vs. flexible rate options, then offering the caller’s preferred rate option for two or three accommodation types.
Besides training agents to master rate optimization techniques, it is also necessary both reservations and also front desk staff on upselling by room category. Part of this involves training them to use various upselling techniques, but in conducting private upselling programs for my hotel and resort clients I find one major issue is a lack of familiarity with the actual rooms and suites themselves.
Therefore, a great starting place is to conduct familiarization tours encouraging colleagues to think of the various “guest stories” playing out daily at your hotel and how each room, suite or view might provide additional benefits for various guest prototypes. For example, families might want privacy and extra space but another major advantage of a suite is having two TV’s and/or two bathrooms. Although the staff might not be impressed by the views they see every day on the way to work, those visiting for special occasions might find it mesmerizing to look out their window and see the beach, mountains or city skyline.
As to upselling techniques, managers might have heard the following techniques before, but too often the new people standing behind your front desk right now have not. Make it a point to reinforce these at in-house training sessions and pre-shift line ups.
• First reassure the guest the minimal room is still a good choice. This is especially important for upselling at the front desk: “Currently we have you in our traditional room, which I’m sure you will find quite comfortable, however…” For reservations: “Our best value rate is for our traditional room, which has all the same amenities and services…”
• Create a sense of urgency. For front desk: “…however, we’ve had some of our (view rooms, executive club floor, or suites) open up this evening…” For reservations: “…however, at this time I still have a few of our (next level options) available for your dates…”
• Use rate framing. For front desk: “These rooms normally run $X, but tonight we have them for $Y.” For reservations: “These rooms normally run $X, but for your dates I can offer you a rate of $Y.”
• Use an incremental rate quotation technique: “For only $30 more you will receive…” Be specific on what is included and explain the benefits for the specific guest’s “story.”
Besides training your front desk and reservations teams on the proper techniques for upselling, it is also critically important to measure their results and to incentivize success. For front desk, it is easier to identify the incidents where colleagues upsell, as they can flag a guest record or do a print screen to document that a reservation was changed to a higher rate at check-in. For walk-ins, colleagues can document in the same ways.
However, for reservations agents it is more challenging to determine when a guest might have requested the special floor, better view or suite on their own. Depending on your inventory of accommodations there are several options. If your hotel only has a small percentage of upsell accommodations such as suites, find out how many they are selling on average per person right now and make that a quota. For example, if each agent averages 5 suite sales a week then that becomes the quota, but pay the upsell incentive for the 6th one and beyond. Again they can flag a reservation or do a print screen to document the sale of a suite. An easier alternative method is to simply calculate the “average revenue per booking” for each agent by dividing the hotel revenue they sold for the month by the number of reservations they booked. Chances are you will quickly see that some agents are taking more time to upsell to higher rated accommodations than others and be able to determine a threshold beyond which you will want to reward those who perform at a higher level.
Besides just measuring the staff’s individual results, it is also important to review them on a regular basis at your pre-shift meetings and to post them prominently in the office to challenge their competitive spirit.
Of course it is always an added motivation to tie-in an incentive or at minimum a contest to reward those who work harder to bring in more revenue.