ROOMDEX CEO, Jos Schaap, Gives a Masterclass on Upselling
ROOMDEX CEO, Jos Schaap, joins the The RevenueManager Series once again in this video to present a Masterclass on Upselling. Jos explains why upselling is necessary in today’s context, and how to make the best out of it for your hotel. (Class starts at 1:35 in video below)
In the class, he presents the following:
- Traditionally, hotels focus on acquisition while ancillary guest revenue is an afterthought. In the COVID world, ADR and Occupancy are down, so hotel need to maximize revenue per guest even after the reservation is made.
- Jos explains the psychological underpinnings of the Guest Tension Arc. We learn about your guests’ evolving feelings about about costs, spending and their upcoming stay in the time between the reservation and check-in. Upselling opportunities are directly related to the flow of the Arc.
- There is such a thing as too much choice. Hotels make the mistake of offering too many options in a pre-sale email. Jos explains how that devalues each offer and induces a state of choice paralysis. Fewer, targeted upselling options will perform better.
- Hotels tend to be too cautious with room upgrade pricing for a number of reasons. But Jos explain that the hotel has already ‘sunk cost’ in that premium room. The value of that room for that night is gone forever if it is not sold. Hotels should focus on maximizing the value of the real estate investments rather than be worried about lowering the price on a particular room category.
- Whereas you do want to maximize revenue per guest, understand that room upgrades and early check in and late check out provide the greatest amount of margin of all you ancillary products. Products requiring physical delivery, such as F&B items, are typically low margin upsells and will not move the needle much on your operating profit.
- Contrary to popular belief, guests will pay for early check-in and late check-out!
- You cannot optimize an activity without measuring the results. Jos offers and array of new upselling KPIs that hotels should adopt to see if their upselling efforts are performing as required.