December 16, 2013

How to implement a hotel front desk upselling program


By focusing your front desk team's attention on upselling, by providing training tips for doing so, and by measuring and rewarding the results, your property can turn-on the faucet to this extra revenue stream.

As the industry looks ahead to what is hoped to be a continued rebound in demand in 2014, most hotel revenue and marketing executives are ready to move beyond a "let's get the heads in the beds" era and to focus on continuing to regain ground on ADR. One significant opportunity is to implement a comprehensive program for upselling guests at registration.

Of course a related opportunity to upsell is when callers contact the reservations department or call center. Based on my experiences in the reservations mystery shopping business, there are still too many agents that only quote one rate – the lowest. So it is also a good time to remind your reservations team to quote a variety of room types, typically two or three, to all callers.

Yet with so many guests booking online these days, the front desk registration experience might present the best opportunity of all.

- Guests may not be aware of upgraded options, especially when the reservation was made by third party such as a travel agent or administrative assistant.

- Voice reservations agents may have failed to convey the value of the upgraded options, or worse yet, failed to mention them at all.

- The guest's needs might change while en route. Business travelers, for example, might have pop-up meetings or projects to work on, requiring additional workspace in their room.

- The impulse of the moment might cause guests to be more receptive to upgraded options, especially after a stressful day of travel. For example, when mom and dad were planning the trip it seemed like a good idea to share a room with the two kids, since "all we're going to do is sleep there anyway." Yet after 8 hours in the minivan or SUV the adjoining room or suite starts looking like a great option.

Another great advantage of upselling at registration is that it's possible to be very specific about what is offered by particular rooms or suites, since the front desk knows exact inventory that day.

Depending on your hotel's inventory of accommodation types, the potential impact of a comprehensive, focused upselling program will vary greatly. However when you sit down to do the math on the potential additional revenue even for hotels with minimal upsell opportunities due to their inventory of room types, it becomes instantly clear that the effort can easily generate a significant ROI. Potential upsell opportunities include:

- Special room types, such as junior or one bedroom suites,
- Rooms or suites with special features such as whirlpool baths and kitchens.
- Preferred views or hotel locations.
- Special "exclusive" floors such concierge or executive level floors.
- Packages that include additional amenities, services, or activities.
- Adding on a second room at registration for a significantly reduced rate. (Such as offering the family of four a second room at 30% off.)

Successful upselling programs have three components: a rate structure that makes upgrades a reasonable value, a staff training experience to expose them to the various techniques and tactics, and a recognition and incentive program. Here is an overview of the components we at the Kennedy Training Network recommend for our training clients.

Structuring Rates So That An Upgrade Is A Reasonable Value

Most properties market a range of rates to various market segments. However, groups, high-volume accounts, or guests participating in special discount programs are typically only offered their special rate for the least expensive room type. Upgraded accommodations, if offered at all, are at rack rates. The end result is that the additional cost to upgrade does not justify the value received.

For example, if the rack rates are $200 for a regular room and $235 for deluxe, a $35 difference seems reasonable. However, when a special corporate rate of $179 is offered for the regular room only, the upgrade fee, which is now $56, is effectively out of reach.

To work around this, many properties are implementing a "flat rate" for upgrading. In this scenario, the guest always has the option of upgrading for the same fee, regardless of what rate they qualify for. So whether it's a corporate, group, government, or promotional rate, the investment for the upgrade is reasonable. Best of all, additional revenue is created from rooms which might have been given away at lower rates anyway if the hotel instead over-sells the lowest room types.

Front Desk Upselling Training Techniques

Here is a menu of upselling techniques your front desk team can use depending on the type of guest standing before them, the time of day, and also the availability of inventory at that time,

- Reconfirm the pre-reserved accommodation; reassure the guest that they already have a nice room. Avoid making the options they've already selected sound undesirable with statements like "I see you only booked one of our standard rooms." Instead say "Mr. Johnson, we have you confirmed in one of our traditional rooms, which I'm sure you will find quite comfortable…" then continue on to ask if they are aware of or interested in upgrades such as below.

- Probe to find out if the guest is aware of available upgrades with statements such as: "When you made your reservation did the agent have a chance to tell you about our ____ rooms?" or "When you booked online did you happen to notice our suite options?"

- Present the availability of upgrades as a unique opportunity by saying: "We've had some of our ____ rooms open up this evening..." or "We're offering a special rate to help familiarize our (repeat or first time) guests with our business suites. Does that sound like something you'd be interested in?"

- Upsell early arrivals into a higher room category. The above technique can be especially effective when upselling early arriving guests to a higher-rated category. For example, "Ms. Perez, we have you reserved in one of our traditional guests rooms. Our official check-in time is 4pm, and we'll do our best to get it to you sooner if possible. In the meantime though I do have a deluxe room that is ready right now. It would be an additional $25, but you might also enjoy the extra (features/amenities) it offers. Does that sound like something you would be interested in?"

- Utilize incremental sales techniques. When a guest has an advance reservation in their minds the original room rate has already been paid. This is even more true for those who booked online at most OTA websites where they actually have pre-paid. "For only $25 more, I can offer you one of our _____ rooms."

Demonstrate the value received. Be as specific as possible. Rather than saying "Deluxe rooms have a view," say "In this room you can look out your window and see…" Rather than saying "The concierge floor has a lounge," say "As a guest on this floor you'll have 24-hour access to our executive lounge, which includes…" Rather than saying "This is a 600 square foot suite with a fully equipped kitchen," say "Since you're traveling with your family, you'll love having all the extra space this suite provides. And the kitchen will be nice if you want to make breakfast or bring back take-out one evening."

- Mention higher rates as a reference point to position lower rates as being a good value:

"These rooms usually run _____, but because of (special circumstance) I can offer you a special rate of _____."

- When quoting rates to walk-ins, always offer a menu of options. Without training, front desk associates tend to offer only one room type to walk-ins, which is typically the least expensive. Instead, offer walk-in guests a range of accommodation types and rates. Offer to show the rooms where possible.

Use Visual Aids. Many hotels are finding it helpful to display digital picture frames, iPads or tablets flashing photos of actual rooms and suites. You can also drop-in a slide with copy reading "Ask us about suite upgrades" or similar.

Recognition And Incentive Programs.

A key ingredient in any upsell program is to measure the results and to implement a recognition and/or incentive program. Front desk upsell incentives are especially easy to justify, as the incremental upsell revenue can be documented. (Associates simply do a print-out to document the change.)

Most incentives reward the individual associate for each upsell, with either a predetermined cash amount, with points that can be redeemed for prizes, or perhaps with days off with pay. (Cash incentives should be paid separately to help differentiate rewards from base salary.) Alternatives are team incentives where everyone who works during a given time period (i.e. shift, day, or week) is rewarded equally for upsells which occurred during that period.

Regardless of which incentive program is selected, it is important to post the results in a prominent area on a regular basis. This helps spark the competitive spirit, and reminds all associates of the potential to achieve the same rewards being earned by the top performers.

By focusing your front desk team's attention on upselling, by providing training tips for doing so, and by measuring and rewarding the results, your property can turn-on the faucet to this extra revenue stream. Along the way, your guests will enjoy utilizing the extra space, upgraded room features, and special services they might not have otherwise considered.

Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry.