5 tips when upgrading a guest

In a price-conscious environment where most of the buying takes place online it’s not unusual to sell the less expensive accommodation first and get left with the more expensive, and often harder to sell, inventory.

To stay relevant on the many Online Travel Agent sites you have to highlight your least expensive room which inadvertently means you are exacerbating the problem.

When I see lavish renovations taking place in hotels or the purchase of ultra-luxury villas in resorts I often wonder if these decisions are more about the ego of the owner than sound market research. Regardless of the cause, the issue remains that you might have problems selling leftover high priced accommodation.

One well used tactic is to upgrade customers to higher class rooms to free up the cheaper and perhaps easier to sell accommodation. Given the perishable and worthless nature of last night’s unsold rooms it’s not a bad idea.

Here are five things you might want to consider when contemplating an upgrade strategy.

1. Have a plan

Trying to do upgrades on the run without thinking it through can lead to problems. You can end up by leaving money on the table by giving them away when you didn’t have to and leaving a room unsold because you waited too long. Develop a strategy you can live with and that works best for you and carefully articulate it to staff. Let them know who can give upgrades and under what circumstances. Set a rule that staff have to note the reasons they gave the upgrade.

2. Don’t overdo free upgrades

It’s amazing how quickly a random act of kindness can become an expectation in the mind of the recipient. Try this experiment at home. For the next four Sundays get up early and prepare a sumptuous breakfast for your significant other. See what the response is on the fifth Sunday when you stop doing it. Almost certainly you will be greeted with, “Where’s breakfast”?

Same with free upgrades. You don’t have to give many away before the guest will tell the receptionist, “I usually get a free upgrade”. If you continue to do this with regular guests you’re not actually giving upgrades, you’re just dropping your rates.

3. Give preference to loyal customers

Without contradicting the previous point, it makes sense to reward loyalty. A member of your rewards program or regular guest should get an upgrade offer before a blow in. Why give a cheap or free upgrade to an international tourist for example. Chances are they are never coming back whatever you do.

4. Upgrade shorter stays first

Notwithstanding the fact that a higher class room may cost more to clean, you might be denying yourself opportunities if you perform an upgrade for a long stay. Consider giving preference to shorter stays.

5. Why are you upgrading?

If you find that you are constantly giving upgrades for little or no reward, the issue might simply be that your rate strategy is wrong. Generally speaking, luxury accommodation has shorter periods of strong demand and high levels of oversupply. It may well be that there are simply not enough people in the world that want to pay your rate. Perhaps try to make hay while the sun shines and take the hit in the down times.

Being more agile with rate and inventory levels on the OTAs can also help. Consider holding back the cheaper rooms until you reach a threshold of premium room sales. Release the budget rooms in a way that aids this strategy.

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