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Profit Optimization

A Sweet Mix: How Automated Upselling Can Maximize Revenue and Profitability

If you’re looking to boost revenue, upselling is a long-established business practice that shouldn’t be overlooked.

To do it well in hospitality, however, requires the successful navigation of several confounding variables and operational challenges. In practice that often means a lot of time spent, missed opportunities, and leaving money on the table.

Fortunately for modern hospitality managers, we live in an age of data-driven automation. While you may be familiar with how IDeaS G3 Revenue Management System (RMS) can automate pricing and rate availability decisions, there’s additional value to be found in the implementation of an automated upselling approach as well.

By pairing the dynamic pricing power of IDeaS G3 RMS with automated upselling platforms, hotels are equipped with the tools needed to make upselling an important pillar in their revenue strategy.

“[Up-selling] is not just the cherry on top of the cake like a lot of people assume,” said Clément Dénarié, Director of Strategic Partnerships and Alliances at Oaky.

That’s an apt choice of words. Like baking, many elements of revenue management are an exact science that require careful measurement, planning, and execution for it all to come together well.

Let’s take a closer look at some of the benefits that come from approaching automated upselling as a critical piece of your revenue management recipe—and not just a bonus treat.

The upside of automated upselling: 7 ways your hotel can benefit

1. You can take advantage of the time between booking and check-in

Your guests’ appetite for making room upgrade and service purchases fluctuates. What may seem like an outlandish upsell suggestion at the time of booking may sound more appealing as they get closer to check-in. This window provides a natural opportunity to push high value upgrades.

The value of this approach is only magnified with dynamic pricing integration as it generates upsell pricing that is directly responsive to the projected demand for different room inventory. For example, if your inventory of deluxe suites is seeing a lull in demand during the guest’s stay, guests can receive a dynamically discounted upgrade offer that maximizes inventory and profitability.

2. Advance room upgrades can free up high-demand inventory

By getting an optimized room upgrade offer out early, you can free up space to get in-demand lower cost inventory booked. That means you’re not just selling the upgraded room and reaping the benefits of a higher margin purchase—you’re also unlocking an opportunity to get the once-claimed room booked sooner.

“The great thing about pre-stay upselling with this integration is that if I’ve booked a standard room and choose to make an upgrade, my previous room is now automatically open for booking,” Dénarié says.

3. Cohesive systems build trust in pricing suggestions for front desk staff

Effective automated upselling strategies depend on a seamless integration of data. A front desk staffer armed with static upsell offers and rate discounts may end up making less than ideal decisions from a revenue management perspective. Worse yet, they may be reluctant to even suggest offers if there’s uncertainty about how the price offered compares to the reality of the property’s booking needs.

By having a well-integrated and trusted pricing suggestion provided by G3 RMS, front desk staff know they can propose upsell opportunities with confidence. That helps build and reinforce a revenue-focused culture of smart upselling.

4. Automated upselling helps support more personal guest experiences

We’ve all grown accustomed to seeing the “Recommended for you” section of an online shopping experience that’s populated with suggestions based on your customer profile. While perhaps those suggestions don’t always end in an additional purchase, the highlighted offerings typically feel curated and relevant to you.

That concept also works very well when applied to upselling with your guests. For example, with Oaky you can segment your guests by profile (ex: business travelers, leisure, families, etc.) and designate upsell opportunities that fit them—this way you’re not pushing a “rose petals and champagne” upgrade to a business guest.

5. Automated upselling creates opportunities to improve TRevPar

While room pricing is certainly a foundational ingredient in your revenue mix, smart hoteliers know that the services and other ancillary income streams that factor into the total revenue per available room (TRevPar) metric should not be overlooked.

With an automated upselling platform in place, you can find creative ways to package and present offerings that provide a TRevPar lift. For example, after booking, your guests can automatically be presented curated options for offerings like booking a round of golf, ordering breakfast for their stay or placing a reservation at an on-property restaurant.

6. You’ll have new avenues for building guest satisfaction and loyalty

It’s easy to perceive automated upselling offers as something guests see as a minor annoyance to click past on the way to check-in. Perhaps that’s true if not executed well. But there’s also a lot of opportunity to grow guest satisfaction and make positive impressions with thoughtful offerings and executions.

Think of the leisure guest who springs for that romantic “roses and champagne” room upgrade. It’s a relatively small effort for the hotel to accommodate that’s made incredibly easy for the guest to spring for—and it makes them look great to their partner. That’s a guest who’s excited to come back or pass on a recommendation to friends.

Additionally, room upgrade offers based on dynamic pricing recommendations can drive satisfaction. For instance, if a guest decides to upgrade to a discounted room type, they can directly compare the discounted rate to the costs of a standard upgrade. While this won’t apply in every circumstance, the pricing transparency and the psychological boost that comes from seeing they were offered a good deal can certainly leave a positive impression.

7.  Automation makes your hotel more resilient to turnover

Good employees tend to be on the move—whether that’s from receiving internal promotions or from heading to another organization. Automated systems can help lessen the impact of that natural staffing churn by providing pricing suggestions that are trusted. That means there’s less institutional pricing knowledge lost when staffing changes inevitably happen.

Additionally, an automated upselling platform can help facilitate the use of upselling incentives for front desk staff. When staff know immediately what’s in it for them—whether that’s direct compensation or some other incentive—to push an upselling opportunity at check-in, it can help keep them happy and build a revenue-focused upselling culture.

The benefits of hotel automation are substantial. The right RMS partner can help you save time, enhance productivity, and boost your bottom line.

Want to learn more about the benefits of applying an automatic upselling approach? Check out our joint webinar with Oaky.

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