Hotels have traditionally underused upselling, even though it's a direct way to boost revenue and profit.
Airlines like Ryanair can make up to 40% of their revenue from ancillary sales, such as upselling and cross-selling. In contrast, many hotels struggle to achieve even single-digit contributions from add-ons.
This gap shows a huge missed opportunity in the hospitality industry.
To strengthen margins, hotels should look to successful upselling models. Airlines excel by getting people on board and systematically offering additional products and services—everything from baggage and seat selection to onboard meals.
In contrast to a flight of hours, hotels welcome guests for days but remain surprisingly passive when suggesting upgrades or enhancements.
The result is untapped revenue and a missed opportunity to enhance the guest experience. By adopting a proactive upselling culture, hotels can bridge this gap, engage guests more effectively, and unlock a powerful incremental revenue stream.
The Upselling Opportunity
Why It's Crucial
- Enhanced Guest Experience: Contrary to popular belief, most travelers appreciate relevant add-ons—especially if they align with their reason for travel and preferences. Offering an upgraded room, a gourmet dining package, or exclusive experiences can elevate a stay and deepen guest satisfaction.
- Growing Costs and Tighter Margins: Between rising labor expenses and intense competition, hotels face shrinking profit margins. Upselling provides a way to offset these pressures by generating incremental revenue from existing guests.
Common Barriers
- Staff Hesitation or Lack of Training: Frontline employees often feel uncomfortable suggesting upsells or may not be adequately coached on how to do so confidently and with the guest's best in mind.
- Fear of Appearing "Pushy": Hotels may worry that proactive upselling will alienate guests, yet many travelers expect offers. The key is to propose the right service at the right moment.
- Limited Clarity on High-Potential Guests: Not all guests are equally receptive to add-ons. Hotels often adopt a "one-size-fits-all" approach that undermines conversion rates and misses potential revenue without the correct data and segmentation.
Examples of Effective Upselling Tactics
Below are common upselling approaches that, when done right, can quickly boost incremental revenue. These are only a few ideas that come to mind. Creative teams in hotels will come up with many more ways to upsell. The first step toward success is eliminating potential obstacles to facilitate easier upselling. I have also estimated the impact to provide you with a sense of what is possible, but these estimates will vary widely among different types of hotels.
Front Desk Check-In Upgrades
How to Do It
Train front-desk agents to proactively offer add-ons such as upgraded rooms, breakfast deals, or late checkout options when guests arrive. Provide scripted guidelines or prompts to ensure a seamless, guest-friendly approach.
Real-Life Example
If a guest is celebrating a honeymoon or birthday, the front-desk agent can offer a package that includes champagne, room décor, and a room on a higher floor with a better view.
Obstacles
- Staff Reluctance/Lack of Training: Agents might feel uncomfortable offering upgrades for fear of sounding pushy.
- Time Constraints at Check-In: If the lobby is busy, staff may skip upselling conversations to expedite check-ins.
Estimated Revenue Impact
- Room Category Upgrade: Can raise ADR by 5–15%.
- Late Checkout/Breakfast Deal: This deal contributes 2–5% per stay for guests who opt in.
- Overall Potential: If consistently implemented, front-desk upsells alone can increase total room revenue by up to 3–7%.
Pre-Arrival Emails or App Notifications
How to Do It
Automate personalized offers sent a few days before arrival—spa discounts, breakfast add-ons, airport transfers—based on guest profiles or past booking patterns.
Real-Life Example
A business traveler receives an email offering a bundled rate for lounge access and high-speed Wi-Fi. By combining these services, the hotel can charge a premium while providing greater value to the guest.
Obstacles
- Data & Technology Gaps: Hotels need an integrated CRM or marketing system to send segmented, well-timed offers.
- Poorly Targeted Messaging: Generic emails may get ignored. Relevance increases open rates and conversions.
Estimated Revenue Impact
- Open & Conversion Rates: Well-crafted pre-stay campaigns can achieve a 20–30% open rate and a 5–10% conversion rate.
- Incremental Revenue: Each successful conversion can add 3–8% more revenue to the original booking (e.g., breakfast/transfer packages).
F&B and In-Room Amenities
How to Do It
Promote unique dining experiences, in-room dining packages, or curated minibar selections that showcase local or thematic elements, such as artisanal cheeses and gourmet snacks.
Real-Life Example
Promote a "romantic dinner package" for two at the hotel's signature restaurant, featuring a set menu and a guaranteed table with a view. A small in-room welcome amenity, such as a dessert platter, can also be included.
Obstacles
- Limited Coordination Between Departments: The Food and Beverage teams and the front office may not collaborate effectively on promotional offers.
- Guest Awareness: Without clear signage or proactive mentions, guests might not realize these options exist.
Estimated Revenue Impact
- Per-Room Spend Increase: Targeting F&B upsells can boost on-property spend by 5–20% per stay, depending on how appealing and relevant the offers are.
- Higher Profit Margins: Upsold F&B items often carry strong margins, especially when using existing restaurant capacity or surplus inventory (e.g., local produce).
Experience Bundles
How to Do It
Partner with local tours, attractions, or cultural events to create exclusive packages. Consider thematic tie-ins like gastronomic tours, wellness retreats, or family-friendly excursions.
Real-Life Example
The city center hotel offers a "Weekend City Explorer" package with a two-day museum pass, late checkout, and a public transport or rideshare discount.
Obstacles
- Coordination with External Partners: Setting up and maintaining partnerships requires time, negotiation, and consistent communication.
- Complex Pricing & Packaging: Bundles must feel like a deal for the guest but still be profitable for the hotel and partners.
Estimated Revenue Impact
- Package Premium: Experience bundles can add 10–30% to the baseline room rate, depending on how unique or exclusive the offerings are. However, be aware of the margins since external partners will take a big chunk of the revenue.
- Guest Satisfaction & Loyalty: Engaging experiences can boost positive reviews and repeat stays, indirectly increasing future revenue.
Key Takeaways
- Upselling Tactics Work Best With Training & Coordination: Even the most compelling offers fail if staff lack confidence or various departments (Front Office, Sales, F&B) don't share a common strategy.
- Technology and Data Are Essential. Hotels need a robust CRM or business intelligence tool to identify high-potential guests, automate campaigns, and track results.
- Revenue Potential Is Significant: Incremental gains in ADR, ancillary revenue, and F&B spending can combine to improve profit margins noticeably. When executed consistently, upselling can contribute 5–15% to top-line revenue across different segments.
By addressing common obstacles—staff training, process integration, and data management—hotels can unlock these upselling opportunities and substantially elevate revenue and the guest experience.
Implementing upselling
Here is an action plan on how to implement upselling to grow revenue and profit.
Anders Johansson - Follow Anders
Founder and CEO @ Demand Calendar | Creating Profitable Hotels
