What does the term, “Up-selling” mean? Wikipedia defines Up-selling as, “A sales technique whereby a salesman (please forgive the gender bias) attempts to have the customer purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. Up-selling usually involves marketing more profitable services or products, but up-selling can also be simply exposing the customer to other options he or she may not have considered previously. Up-selling can imply selling something additional, or selling something that is more profitable or otherwise preferable for the seller instead of the original sale.”
Doesn’t sound all that difficult, does it? And it shouldn’t be, but in reality it rarely happens. Why? Aristotle’s quote above provides us with the answer. Just like excellence, Up-selling is also a habit and hotel associates in Australia, in general, are not doing it enough to make it a habit. Think about it for a moment. When was the last time that you were offered a more expensive room option when making a hotel reservation over the telephone? It does happen, but rarely (Yes, people still do make hotel bookings by telephone). On most occasions you are just told about the least expensive room type so that the sales agent can secure a booking in the quickest possible time and move on to the next caller. Or, when was the last time that you were offered the option of a room up-grade on check in, for an additional charge or, the last time that any staff member at a hotel asked if you would like to make a dinner reservation in the hotel’s restaurant or, book a treatment in the hotel’s day spa?
A hotel’s Food & Beverage staff usually aren’t much better at Up-selling either. When was the last time a waitperson actually recommended a certain entree, main, dessert or wine with genuine passion to the point that your saliva glands kicked into production and you just could not resist? ... No. Or, you were asked if you would like to order a wine with your meal. ... No, maybe they just forgot! The truth is that Up-selling in hotels is very much the exception, not the rule and the lack of it is costing hotels big dollars in lost revenue. Please refer to the Table below for some estimates on revenues foregone due to the failure to Up-sell.
HOTEL’S TOTAL NUMBER OF ROOMS
| X
AVERAGE OCCUPANCY %
(EXAMPLE ONLY) | X
DAYS PER YEAR
|
NUMBER OF ROOMS SOLD PER YEAR
=
|
AVERAGE NUMBER OF GUESTS PER ROOM (ESTIMATE ONLY) |
TOTAL NUMBER OF GUESTS PER YEAR
=
| FOR EVERY 1% OF GUESTS WHO ARE NOT
UP SOLD
=
| X
AN EXTRA $50.00
EACH
REVENUE FOREGONE
PER ANNUM
=
| FOR EVERY 10% OF GUESTS WHO ARE NOT
UP SOLD
=
| X
AN EXTRA $50.00
EACH
REVENUE
FOREGONE
PER ANNUM
=
|
100
| 70%
| 365
| 25550
| 1.4
| 35770
| 358
| $17,900
| 3577
| $178,850
|
200
| 70%
| 365
| 51100
| 1.4
| 71540
| 715
| $35,750
| 7154
| $357,700
|
300
| 70%
| 365
| 76650
| 1.4
| 107310
| 1073
| $53,650
| 10731
| $536,550
|
400
| 70%
| 365
| 102200
| 1.4
| 143080
| 1431
| $71,550
| 14308
| $715,400
|
500
| 70%
| 365
| 127750
| 1.4
| 178850
| 1788
| $89,400
| 17885
| $894,250
|
Let’s just take the example above of a 300 room hotel with an average annual occupancy of 70% and an average number of guests per room sold of 1.4. For every 1% of guests who are not Up-sold $50.00, the revenue foregone per annum is $53,650.00. For 10% it’s $536,550.00 and for 20% (53,650.00 x 20) it’s a staggering $1,073,000.00. All for not Up-selling a very achievable $50.00.
The lack of Up-selling is also detracting from the guests overall hotel experience. Guests like to be given options even if they are more expensive, particularly if they happen to be the guest of a five or even a four star hotel. Remember, the guest can always say, “No.” Even so, it’s still nice to be asked and don’t be surprised if they actually say, “Yes!” Sometimes all it takes to Up-sell a guest is to make them aware of a product, service or special offer that they may not have known about. Regardless of the outcome in most cases the guest will perceive the attempt to Up-sell as excellent customer service, an Up-Service (That’s a topic for another day), so even if they reject the offer it’s still a win.
So the moral to this article is, “If you’re a hotel associate become an Up-selling STAR."
Start Targeting Additional Revenue by Up-selling your guests. You’ll be doing your hotel and your guests a great service and the job you save might just be your own.
If you’re a hotel manager and you need help to focus your associates on Up-selling in your hotel, click here.
