By How Much Can Upselling Boost Your Hotel’s Revenue?

The importance of upselling within the hotel industry has increased over recent years. No wonder, because a good upselling strategy can significantly boost hotels revenue. But is upselling beneficial for every type of hotel? Is it worth for your hotel? In this article, you find a comparison of the upsell performance per type of hotel, based on a recent benchmark report. At the bottom of the article, you also find a link to download the full report.

Free Benchmark Report: Upsell Performance Per Type of Hotel

To find out exactly what the results of an automated upselling solution are, the team at the upselling platform Oaky created a free benchmark report summarising monthly data from 1,100 hotels between 2017 and 2019. In this report, you find out which types of hotels perform best of all, how much incremental revenue properties generate per room, the average extra spend per guest and how much money every single email you send could bring in. Keep reading for an overview!

Average Incremental Revenue Per Room

According to the data, a property’s type and location have a strong impact on incremental revenue per room. With an average of €38.39 of upsell revenue per room per month, ski and mountain resorts did best in this category. Luxury hotels, golf and spa resorts were not far behind. It stood out that airport hotels performed comparatively low. This is probably because they usually work with groups and airline crew which are less receptive to upsell offers. But that shouldn’t discourage you because the overall best performer highlighted in the report is an airport hotel. This proves upselling can work at every type of property since there will always be guests keen on paying for extra services they value. The key to getting the sale is segmentation and reaching out with relevant targeted offers at the right time.

Average Extra Spend Per Guest

It probably doesn’t come as a surprise to you that luxury hotels, spa, golf and ski resorts had the highest extra average spend per guest. Other property types with good results included city hotels, serviced apartments and branded hotels. This is likely because of their high percentage of business guests who are happy to pay for add-on services and amenities if this will make their stay more convenient and enjoyable. The great thing about any guest who opts for an upsell offer is that they not only spend more money at your property, but they will also be more satisfied with their stay – a win-win situation.

The data also showed an interesting fact about additional spend among hostel guests. While it was lower than at luxury and upscale hotels, many guests in this budget segment would regularly spend a room night’s worth of money on a service they need or want.

Average Revenue Per Email Sent

The report’s final metric highlights the average revenue generated per email sent. Here, high-end segments lead the pack once more. Other categories including branded hotels, serviced apartments and city hotels can compensate for their lower average revenue per email because they reach out to a larger number of guests.

Of course, this information is useful when you are just beginning your upselling journey, but it’s important to know that your success is determined by more than your type of property and its location. The core of successful upselling is sending the right message at the right time for the right customer. For example, a hostel mentioned in the report earned a staggering €6,310 in October 2018 from upselling which is more than many luxury hotels make.