April 19, 2021
ROOMDEX introduces hotel upsell KPIs for a profitable recovery
Jos Schaap | ROOMDEX
As the old saying goes, “what is not measured cannot be improved.” Metrics allow you to identify where you can make the easiest and most impactful improvements. Indeed, the more a business can measure, the more it can improve its efficiency and, in many cases, revenue.
One thing the hotel industry is great at is utilizing indexes – key performance indicators (KPIs) – to measure performance. Occupancy, average daily rate (ADR) and revenue per available room (Rev PAR) are top KPIs that hotels consistently use – with great success – to measure their progress and stay on track with their goals.
Over the past year, upselling has become more important to hotels as they try to mitigate the impact of the severe declines in revenue. However, when it comes to KPIs the same gusto has not been applied to upsells. This means hoteliers are simply not exploiting and maximizing upsell revenue opportunities.
To help hotels on their way, ROOMDEX is presenting upsell KPIs so hoteliers can understand the value of upsell performance and highlight areas for improvement. The following are key upsell KPI’s that we think all hoteliers should include in their arsenal for maximum success.
|Upsell Revenue Per Available Room (UpRevPar)
Hotel upsell revenue / Number of hotel rooms
Upsell Revenue Per Available Room is a key indicator of upsell performance, illustrating, on average, the total amount of upsell revenue hotel rooms generate
|Revenue Per Upsold Reservation $ (RLiftUpSold$)
Hotel upsell revenue / reservations upsell purchases
Revenue Per Upsold Reservation represents the average upsell revenue generated from a reservation that was upsold.
% of Upsell emails sent
Exposure Rate examines the percentage of emails sent to guests with upsell offers.
While LOS and occupancy play a roll, a high exposure rate of 80% or more with upsell offers provides greater opportunities to maximize conversions.
|Revenue Per Exposed Reservation (RevPEX)
Hotel upsell revenue / no. of upsell emails sent
Revenue Per Exposed Reservation shows, on average, the amount of revenue generated from upsell email offers sent to guests who have a reservation. Similar to Revenue Per Offer Viewed (RevPI), the higher this figure is reveals how convincing the overall upsell program is from email, to teaser, to price to the offer and timing itself.
|Revenue Per Offered Viewed (RevPI)
total upsell revenue / number of offer views
The higher this number is the better the offer page is converting to purchases, it’s a good indication of an effective offer page and offers
|Average Room Upgrade (AveRu)
Total room upgrade revenue / no. of room upgrades
Average room upgrade illustrates, on average, the amount of room upgrade revenue generated. While room upgrades largely depend on the rate and occupancy as well as the type of hotel and ADR in the hotel, it can be a quick way to highlight money left on the table by not having an upsell program in place.
|Average Early Arrival Upgrade (AveEU)
Total early arrival revenue / number of early arrivals sold
Average Early Arrival Upgrade shows the value, on average, of early arrival requests sold.
|Average Late Departure Upgrade (AveLD)
Total late departure revenue / number of late departures sold
Average Late Departure Upgrade shows the value, on average, of late departure requests sold.
|Return on Investment (ROI)
Total upsell revenue / cost of ROOMDEX per room per month
Return on investment measured usually doesn’t need much explanation. This figure highlights the total upsell revenue generated by utilizing a upsell software tool, such as ROOMDEX minus costs.
Get the most from your upsell program
Over the past year, our approaches to running hotels have shifted considerably. Hotels have recognized that upselling presents an opportunity to maximize revenue from hotel occupancy. However, without KPIs it is unlikely that any upsell program will operate at optimal efficiency and maximum profit.
With ROOMDEX’s upsell KPIs, hoteliers can measure their performance more accurately and be confident in making intelligent adjustments to get the most out of their upsell program and increase profitability.