Upselling is a great way to boost both your guests’ experience and your revenue through paid upgrades and ancillary services. In this article you will learn how you can calculate additional revenue, made by upselling. Additionally you find a handy tool to help you to estimate the potential.
Success Factors for Upselling
A recently published benchmarking report shows that elements like property type (e.g. resort, downtown hotel, hostel…) and location (e.g. mountains, beach, downtown…) strongly impact the
amount of revenue your upselling scheme can generate. For example, upscale leisure hotels perform the best, but branded hotels, downtown properties and hostels also do quite well. Other important factors include your property’s number of rooms/beds, the percentage of same-day reservations and the average length of stay among others.
If you’re only getting started with upselling, considering the factors mentioned above to estimate how much extra revenue your property could make is very difficult without a data-based forecasting tool. But how would you even create such a tool without access to data from different types of properties in various locations?
Well, that’s where the incremental revenue calculator comes in. It helps you consider all applicable factors when it forecasts your property’s upsell revenue.
But before you get started with it, read up on two more important elements needed to do well with upselling.
An Efficient Way to Upsell
Two other important success factors are reach and timing. While many hotels have an upselling program in place, it’s often limited to guests checking in at the reception. Unfortunately, limiting upselling to check-in means these properties are losing out because an automated upselling platform is much more efficient and effective at selling upgrades and ancillary services pre-arrival. This hands-off approach lets you reach more guests, promote more different deals and increase your overall conversion rate. Sounds great, right?
Since implementing an upselling platform costs both time and money though, many hoteliers are not sure if it’s worth it. If this sounds like something you’ve been asking yourself, you can now use the incremental revenue calculator to get answers to your questions.
All you need to do is download the Google Sheet linked below, input your property’s data and see how much additional revenue you could be generating monthly by using an automated upselling solution.
How the Incremental Revenue Calculator Works
To make sure you get the most accurate result from the incremental revenue calculator, here’s a quick rundown of the data you need and why it’s important. First, select your property type (hotel, hostel, resort…), star rating and location type (city centre, countryside…) from the drop-down menus. To complete the second section of the sheet, you’ll need a few key hotel metrics.
- Number of rooms or beds: As you might expect – the more rooms (or beds, if you have a hostel)
you have, the more guests you can offer extra services and paid upgrades to.
- Average occupancy: Like above – the more rooms (or beds) you sell, the more often you can
promote upsell deals.
- Average length of stay (LOS): A short average LOS means higher turnover and more guests to
pitch your deals to. A longer LOS gives you fewer chances to upsell, but guests might choose
several upsells for a longer stay.
- Same-day reservations (as a % of total reservations): It’s harder to reach last-minute bookers
since automated upsell emails are often sent out a few days prior to arrival. More same-day
reservations mean fewer opportunities to upsell.
- Percentage of bookings coming from Booking.com: Depending on the upselling platform you
use, you may or may not be able to reach out to guests booking via Booking.com. Oaky, for
example, helps you upsell to these guests which significantly expands your reach and boosts
- Percentage of direct bookings (from your website, via phone or email): Direct bookers can
easily be contacted via an upselling platform. This means the more direct reservations you get,
the more often you can pitch your upsell deals.