Upsell and Cross Sell, how to use them to increase the revenue of your Hotel or Vacation Rental

What is Upsell: meaning and definition

An Upsell (or Upselling) is a sales (and marketing) technique used to increase the turnover, sales and revenue of a company or provider, by suggesting to the customer (before, during and after the purchase phase) services that are superior in quality or quantity to the customer’s initial purchase intentions.

The Upsell, if offered at the right time and to the right customer, can be a real win-win situation, where both customer and supplier benefit from a purchase that exceeds their first expectations.

This is a case of upselling: better services at the purchase stage correspond to higher revenue for the supplier and higher customer satisfaction.
An upsell occurs when the supplier gains from selling a higher service and the customer saves by enjoying higher value services at a lower than normal price.

To understand with a practical example what is upselling, it may be useful to refer to the world of airlines and flight bookings. In almost all of the more advanced booking portals, we are now offered the option of reserving a seat at the checkout stage, instead of random assignment. A place which, of course, is not free of charge but, depending on the location, proximity to the corridor or bathroom, will have a proportionally higher price.

This is a case of upsell: better services at the purchase stage correspond to higher revenue for the supplier and higher customer satisfaction.

What is Cross Sell: meaning and definition

The difference between Cross Sell and Upsell is subtle but essential. Cross Sell is also a sales (and marketing) technique that is used to generate more revenue from the transaction. However, a better service is not provided or offered, but an adjacent, parallel service of a complementary category to the product already purchased by the customer.

In order to understand what is cross sell and which is the difference between cross selling and upselling, it will be useful to refer again to the world of airlines and flight booking.

The process of buying an airline ticket has become incredibly long today precisely because of the number of cross-selling attempts by airlines to sell additional and parallel services to the journey. The offer of a car rental service to move both on landing and take-off from the airport to the hotel, an additional discounted travel ticket for your next holiday, discounted accommodation in your destination or discounted travel insurance are all, in fact, examples of cross sell.

Upselling and Cross Selling in Hotels and in the world of Hospitality

Of course, upsell and cross sell do not only involve the world of retail or flight bookings. In the Hospitality industry, in fact, they are widespread and most accommodation facilities have started to use them regularly. In hospitality, in fact, upsell and cross sell are part of the property management sector called Hotel Revenue Management.

There are two main reasons for this spread.

On the one hand, the advent of increasingly precise and efficient technology has favored the flourishing of moments that can be transformed into sales and business opportunities (e-commerce and online sales, above all, but also emailing, and the introduction of booking software such as Booking Engine).

On the other hand, the whole concept of hotels and hospitality needs to be defined to understand the slow and stubborn use of upsell and cross sell.

In fact, the latter has undergone a transformation in the last few decades.

The hotel, for example, has become central to the guest’s holiday experience from a mere place of rest. In fact, the accommodation has become a place to enjoy an all-inclusive holiday experience and the customers themselves now expect to enjoy an increasingly varied and customized holiday experience that meets their needs.

And it is precisely for these reasons that upsell and cross-sell in hospitality is so important today.

When do upsell and cross sell work best in a hotel or vacation rental?

In terms of seasonality, there is no real golden moment to encourage upselling or cross selling.

For example, suggesting an upselling or a cross selling can be useful in terms of seasonal adjustment, offering advantageous solutions during the low season to encourage an increase in the number of guests staying in a hotel or accommodation. At the same time, however, even in high season, upsell is a good strategy to increase revenues. For example, when the occupancy of the cheapest rooms has reached 100%, offering affordable prices to occupy suites or more luxurious lodgings is a very smart way to increase the turnover.

But during the buying phase, is there a better moment to propose upselling or cross-selling? Again, there is no such thing as a good time. In fact, cross selling and up selling can be proposed:

• At the moment of booking, as it happens with e-commerce and airlines
• A few days before the arrival of the guests through an email, for example (in this case the use of a web concierge can be very useful to optimize the whole communication process with the guests)
• During the check-in
• During the stay
• On the way back, once the journey is over (especially if the experience was positive), asking for a review and offering further discounts and benefits in order to retain the customer and increase his lifetime value

Upselling and Cross Selling: Examples for Hotels and Vacation Rental

As you could imagine, the opportunities and the tools for upsell and cross-sell are potentially endless in the Hospitality world. The only factor limiting their application – obviously – will be the variety of services that your accommodation can offer its guests.

Some of the most popular services among hotels and vacation rentals to upsell and increase revenue from bookings – apart from room upgrades, which is the main case in the hospitality industry – may be:

1. Access to the spa and solarium (where spa treatments and massages may constitute additional upselling)
2. Special ingredients, customized menus or gourmet dinner
3. Access to and use of meeting rooms for conferences and corporate meetings
4. City tours and excursions
5. Early Check-in
6. Late Check-out
7. Breakfast and room service
8. Airport shuttle service
9. Car, bike and motorbike hire
10. Parking space for rent

How Octorate can help you with Upselling and Cross Selling

• The setting of the extras of the stay that customers can include when booking on your Booking Engine;
• Useful All-in-One packages at attractive prices with extras already included in addition to just buying the room (see video)
• The possibility of sending automatic e-mails through the Virtual Concierge, with upselling designed specifically for your customer just before his arrival at the accommodation

From these three points, you can see that the setting of extras and upselling potentials on Octorate is practically unlimited. Your only limit is the extra services you can provide to your customers!

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