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After a few rough years of riding out the COVID-19 pandemic, hotel owners and operators are more inclined than ever to find new ways to increase the amount of revenue they receive per guest. One way to do this is to simply increase the price of rooms; however, this may just end up driving potential guests directly into the lobbies of rival hotels.
Another way to increase revenue would be to add new amenities and services to the property, but this would be expensive and likely take a very long time to show a positive return on investment.
A more effective way for hoteliers to drive more revenue per guest than either of the two outlined options above is to simply begin upselling any existing services and amenities. This is not a revolutionary idea, as this model for increasing ancillary revenue has been well tested in the airline industry.
The types of amenities and services a hotel operator chooses to upsell can depend on a variety of factors, but there are some near universal upsell options for hoteliers looking to boost ancillary revenue.
Upselling examples for hotels that can be sold at almost any property include:
Each one of these examples represent low-lift ways for hoteliers to increase revenue at their properties without dramatically increasing overhead.
Let’s now examine each of the above upselling examples for hotels in detail.
Room upgrade packages are one of the most straightforward upsells a hotel can offer at their property. By simply providing guests with the ability to upgrade during the check-in process to a larger room or one with a better view, hoteliers can easily increase the amount of revenue they receive per guest and ensure that larger rooms, which are presumably worth much more, don’t ever stay vacant.
The option to check in early is one of the most common guest requests at any type of property — be it full-service, limited-service, luxury or otherwise. According to industry data, even the most price-sensitive of guests are often willing to pay a small premium for the convenience of being able to check in to a property early. A $20-$30 fee for early check-in is not an uncommon price point among all types of hotels, and it’s been reported that 5-10 percent of all guests will select to check-in early if presented with the option during a contactless check-in (i.e., mobile check-in) experience.
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According to an article by James Eagleman in TravelingLight.com “The most common hotel check-out time in the United States is 11 am with 86% of hotels choosing that time.” For many visitors, this may just be too early in the day to give them enough time to comfortably wrap up their stay at your property.
Much like offering a late check-in, offering the option to checkout at a later time is also an easy way for hoteliers to drive more revenue. This is particularly easy to do when offered through a contactless checkout solution designed for hotels.
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If you have a parking lot available at your property, it does not take much effort to simply issue parking permits for a small fee to guests that wish to park their cars on-site. This can be an especially lucrative upsell opportunity for hotels if the property is located in an urban area with limited parking space available.
Partnering with local businesses is a tried and true way for hotel businesses to generate more revenue for themselves and their surrounding communities. From special discounts on tickets to local events purchased at the front desk to priority dinner reservations made through a hotel’s digital upsells platform, there are endless ways for hoteliers to partner with local businesses. Hoteliers interested in offering these kinds of discounts should reach out to local businesses directly or engage their local chambers of commerce.
Though it may seem to many like a standard practice, housekeeping services don’t have to be a daily occurrence at a hotel. In fact, the environmental and financial costs incurred by daily housekeeping services can lead many hoteliers to rethink how they offer these services.
Only offering daily housekeeping services to guests that indicate they are willing to pay for them during the check-in process or in-stay experience, presents an excellent opportunity for properties to increase staff efficiency, lower costs and increase revenue.
Even without a restaurant or on-property kitchen, hotel operators can still drive a good amount of revenue from the offering of simple food and beverage items that can be stored in basic freezer or refrigerator units behind the front desk. Many weary travelers will pay a premium for a bottle of high-end bottled water upon check-in or be happy to purchase a bean burrito that can be cooked quickly in an in-room microwave. When it comes to using low-cost food and beverage items to increase revenue, the only limit on hotel operators is the bounds of their imagination.
Everyone who has ever owned a pet knows what a trial it can be to be away from them. It’s this very basic human love for our pets (really, they’re almost children, right?), that makes us pain to be away from them and willing to pay just a bit more to Fido or Fluffy join us on our travels.
However, dogs and cats can leave a fair amount of damage to repair and cleaning to be done in their wake, so it only makes sense that hotels would charge a premium to allow pets to stay in a room. Most hoteliers will find that guests are more than willing to pay whatever it costs to keep their furry friends by their side.
Options for basic and premium Wi-Fi have become commonplace throughout the travel industry from airplanes to cross-country trains. Passengers waiting in airports or in-transit are often presented with both of these choices and there is no reason hotels can’t offer the same tiered options. Consider reserving certain data plans for high-paying guests to maximize profits for your property.
If a property is located in a highly desirable or tourist-heavy location, it may be an especially good idea for the hotel operator to consider offering the option for guests to leave their luggage at the front desk both before they check in, or after checkout, for a small fee. Many guests will enjoy the flexibility in their schedule that this option provides and it’s easy to foresee how a nominal cost will be easy to swallow. Luggage storage fees are certainly one of the clearest examples of how to increase revenue by upselling at a hotel.
The examples of upsells for hotels listed in this article represents only a small portion of the ways in which hoteliers can generate additional revenue. Forward-thinking hotel operators and owners should consider the airline model referenced above when outlining how their property might gain more revenue from every customer. And like in most things, creativity is the key to profitability.
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