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Why Is Upselling Important? How Can Hotels Improve Revenue Directly from the Front Desk?

The importance of upselling at the front desk has increased over recent years due in large part to the changing methods of booking rooms. A well-managed upselling program can benefit all parties involved if done correctly.

The importance of upselling at the front desk has increased over recent years due in large part to the changing methods of booking rooms. The popularity of reserving rooms online from a third-party travel site, the property’s website, or packaged with a flight and/or rental car means that the front desk agent’s reception is often the first person-to-person interaction that guests experience. This trend gives the front desk agent the opportunity to become a member of the sales department by selling upgrades (upselling) to guests upon arrival. Upselling allows a property to maximize revenue from its occupancy and increase the ADR, or average daily rate.

The act of selling upgrades can benefit the property, the front desk agent, and the guest if there is a quality system in place. The benefits for the property include higher guest satisfaction and higher revenue/ADR. Proactively upselling can make a big impression on the bottom line, no matter the size of the property. For example, not too long ago, a smaller, high-end, boutique property in the mid-Atlantic region, with less than 150 rooms implemented a new upselling program in 2007, and its upsell revenue jumped from $20,000 in 2006 to $120,000 in 2007. The following years’ upselling revenue increased significantly as well: to $145,000 in 2008, $190,000 in 2009, and more than $200,000 in 2010. The hotel paid for training and provided agents with upselling incentives; and even with such expenditures accounted for, the property increased profits by $168,000 over the previous year.

The front desk agent has the opportunity to profit from an upselling program through a commission-based incentive program. For example, an effective incentive program that has been implemented at a number of properties (ranging from full-service luxury resorts to boutique and urban corporate properties) offers 5% of the upgrade amount; and thus the difference between the rate booked and the new (upsold) amount is added as a bonus to the agent’s paycheck after the guest has checked out. For example, if a guest makes a three-night reservation at $115/night, and the front desk agent sells an upgrade to the guest increasing the rate to $145/night, the front desk agent’s commission would be $4.50 (5% of $90) and the hotel would gain $85.50 from the increase in rate.

Team and individual selling goals are also opportunities for a property to motivate front desk agents to upsell proactively. If the team, for example, achieves its monthly goal for upsells, the incentive percentage can be increased to 10% and paid retroactively. In 2010, at the small mid-Atlantic hotel referenced above, an agent had an annual upsell total just short of $45,000; because her team made the monthly goals each quarter and so achieved the 10% bonus bracket, the agent earned an additional $4,500 for the year. This kind of financial reward can be extremely motivating for staff. In this instance, the hotel realized an additional $40,000. It should also be noted that guest satisfaction surveys were higher that year than in previous years – an all-around win!

Recognition-based rewards are also great tools to incorporate into an upselling program. Honoring staff for the most upsells, highest dollar average of upsells, and highest monetary amount of upsells can be recognized with cash bonuses, plaques, prime parking spaces, gift cards, or even lunch with the General Manager.

An incentive for converting a “walk-in” reservation is also an opportunity to consider. This type of selling may warrant a slightly larger commission percentage because there is a different level of skill and effort needed from the front desk agent. In these situations, an 8% to 10% “commission” may very well be appropriate.
As you can see, upselling is a win/win/win scenario for the property, front desk agent, and guest -- if done correctly.

How Can Our Hotel Upsell Properly?
Best Practices for Implementing an Upselling Philosophy

One of the most common mistakes the front office staff can make when implementing an upsell program is to establish “higher revenues” as the ultimate goal. That’s when a guest’s experience is almost always diminished. Instead, the focus must be placed on the guest and his/her comfort. When the agent is trained and incentivized to enhance the guest’s experience, the upsell progresses naturally.

Again, as the front desk staff is quite often the guest’s first contact with the hotel, it’s critical that the front desk agent “consult” the guest about the hotel – topics such as comfortable accommodations, appropriate packages, or guest room types, etc. Most frequent travelers report that front desk agents rarely make an effort to recommend any accommodation other than the one booked. On the rare occasion that an agent does make a recommendation, quite often the effort is a transparent attempt to “get more money” from the guest. There is no connection to the recommendation and the guest’s needs. This approach can be very off-putting. The first step to successful upselling is a shift in focus and presentation; a keen awareness of the guest and sincerity regarding what that guest may require for comfort and satisfaction need to be the primary concern.

Agents must learn to recognize and anticipate the needs of the guests as well as have the proper product knowledge to make an educated suggestion of a more comfortable room option. For example, if someone is traveling with children and has booked a standard room, the agent could point out that the guest may be more comfortable being in a room type with a separate area, so that the parents aren’t required to have an 8:30 bed time. Or perhaps someone staying for an extended amount of time would find value in a room that has more space. Oftentimes, guests don’t fully understand the full range of room-type options that are available, and the situation should be approached in an informative and helpful manner, and never with a disparaging tone or remark about the currently reserved room. Again, the goal is to maximize the guest’s experience.

How Do We Measure Our Front Desk Upselling Success?
Once an upselling program is implemented, it is critical to also commit to a tracking system that measures the results and impact and provides an accurate incentive payout. The tracking systems will vary among properties due to the different PMS in place, but there are aspects that should be universal. The system should be smooth and easy to process by the front desk agent. Incentives should be paid out after the guest has checked out and his/her payment has been received. The number of upsells, the average amount of upsells, and the total amount of upsells should be tracked on an individual and team basis.

A full-service resort on the west coast of Florida tracks its upsells in this manner:

  •  The agent leaves the original reservation room type on the reservation but adds an “upgrade” charge for the amount, let’s say $20;
  • The agent makes a screen print of the reservation and highlights the upgrade amount, number of days, date, and initials (ID);
  • The agent gives the printout to the Front Desk Manager, who verifies the information;
  • The Front Desk Manager gives the reports to the payroll department, which applies it to the paycheck of the agent after the guest has departed and paid his/her bill;
  • Accounting also creates the upselling statistics reports for individuals and teams.

How Can HVS Train Your Staff to Upsell?
Historically, front desk agents have been viewed as the “front line” at a property. They handle guest requests, complaints, maneuvering through oversold dates, delivering promises made by group sales managers, etc. Consequently, when staffing the desk, management has looked for individuals with qualities such as diplomacy, confidence, charisma, and, quite often, nerves of steel.

While these traits still serve an agent well, the changing landscape of reservation-making has created the need for a new skill set for the front desk agent – the ability to sell effectively. Agents need to be trained properly on how to qualify the guest, use appropriate verbiage, assess availability, identify appropriate packages or promotions, and quote pricing. Upselling can seem daunting, but the rewards are indisputable – happier guests (translating to a higher repeat ratio), higher revenues, and better compensation for the agent.

A well-managed upselling program can benefit all parties involved if done correctly. To stay competitive, it is necessary that a property be able to adapt to the changes in the hospitality industry. There is a delicate balance between good customer service and quality sales that, if done properly, could amount to great success for an upselling program. Proper training and an energized front desk team will create the right atmosphere for a productive upselling program with a great return on investment. HVS’s expert staff can help you create a customized program for your property, provide sales and customer service training for the frontline staff, and help you implement a tracking and rewards systems for the program. HVS Sales & Marketing Services can also help you instill a philosophy of upselling through personal training, webinars, tutorials, and more. For more information, please contact Leora Lanz at llanz@hvs.com.

HVS Sales & Marketing Services would also like to acknowledge Miss Lacey Hagen for her enthusiasm, attitude, and contributions to this article. Lacey is a Graduate Assistant at Temple University pursuing a Master's Degree in Tourism and Hospitality Management. She has a Bachelor's Degree in Sport Management from the University of Minnesota. Lacey has worked at the front desk of the Residence Inn Minneapolis City Center, as a Social Media Intern for the Minnesota Timberwolves, and as a Recreation and Front Desk Intern for the Tradewinds Island Resort on St. Pete Beach, Florida.


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Filed Under Categories Hotel Operations, Sales & Marketing

Fantastic article. Work as a consultant and helped me pitch to a hotel for a upselling system we are trying to implement. www.sherpi.com
Excellent article. Regnauld Mortimer. Director of IHRM ( institute of restaurant and hotel management dona paula goa india) www.ihrmgoa.com presently Director of Training at THE ROYALE ASSAGAO RESORT GOA.WWW.royaleassagao.com Best regards, Reg
I think someone stole your article...or you stole theirs. http://www.tafastrack.com/resources/articles/16-hotel-resources/109
wow, you're not kidding! someone took our words. thank you for advising and i'll be purusing this.
Thank you for your effort to provide this value information. In steps how we can make a proper action plan to improve the up selling Thank you
Thank you so much for this article i believe it will make a total change in the way i handle things as a hotelior in my organisation.kudos for the great work! .Will communicate more via the email.
i think this is great..im currently working at hotel industry but incentive is not programmed...thanks for the great info..God Bless.
What is the cost of front desk training? Is there a train the trainer program available? This seems like hotel 101 but is so often missed as we try to staff our front desks. Thank you for sharing this information. I love it.

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