ORIGINAL POST DATE: 02/12/2009
Here we are in the middle of an economic downturn with travel and hospitality bookings and average daily rate (ADR) being cut back to levels not seen for some time. Add to this the changing methods of booking rooms driven largely by the popularity of reserving rooms online from 3rd party travel sites, the property’s website or as part of a flight/car package and the importance of upselling at the front desk, which is often the first person-to-person and brand guest experience, becomes paramount. Upselling in this context is when the front desk agent becomes a member of the sales department by selling upgrades (the upsell) to guests upon arrival and allows a property to maximize revenue from its occupancy and increase the ADR. The benefits for the property include higher guest satisfaction and higher revenue/ADR. This proactive upselling can make a big impression on the bottom line, no matter the size of the property. 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 incremental revenue is $90 ($30/night x 3 nights). Assuming a 25% upsell acceptance rate at a 400 room hotel this business process could add $9,000 over a 4 day stay and add $67,500 at a 3,000 room hotel such as the Cosmopolitan. As an independent and non-affiliated hotel, the Cosmopolitan Resort needs to maximize every guest stay and provide a truly memorable positive experience at every guest touch point and you can easily see the financial benefits.
Since this is a start-up with very minimal business operations executive staff onboard, I’m in a unique position to contribute and influence the guest experience and brand vision, while directly tying a technology vision & strategy to business revenues. Leveraging my expertise from designing and supporting contact centers, CRM solutions and general business enablement, I can advise that one of the most common mistakes that leadership and staff (in this case front desk agent) can make when trying to upsell is to use “higher revenues” as the objective. In the specific case of hospitality, the guest’s experience and receptivity will almost always be diminished since it WILL come across as a transparent and forced attempt to “get more money” from the guest. Instead, the focus must be placed on the guest and their comfort, preferences and needs. When the agent is trained and incentivized to enhance the guest’s experience using these 3 focus areas, the upsell can progress 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” and authentically engage the guest about the hotel – topics such as comfortable accommodations, appropriate packages, or guest room types, purpose of visit, etc. Surprisingly, given the state of the economy and business volumes, front desk agents rarely make an effort to recommend any accommodation or amenity other than the one booked. 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, and technically all front line staff, 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 is staying for a bachelor or bachelorette, birthday or anniversary party and would welcome a spa, dinner, or cocktail package that they perhaps didn’t know existed. Oftentimes, guests don’t fully understand the full range of room-type options, amenities and packages 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.
In order to be successful, the agent really needs to be empowered with tools that would increase the acceptance rate of such upsells. An innovative and key enabler of this can be the placement on, or incorporation into, the front desk mill work of a small screen such as those on the seat backs of planes. Connect this to a digital signage player and you can now have property specific amenity awareness video to help inform and upsell the guest. Additionally, customer relationship management (CRM) tools to augment and support the check-in interaction can be used. CRM can help the agent influence the guest towards a mutually beneficial action and decision based on previous or typical customer insights.
However, while pictures and videos are worth a thousand words, the real tools for employees are knowledge, training, and executive support. Front desk staff needs to be trained to:
- * Know the property (including events going on). It is still surprising how many hotel and resort employees are not aware of events going on at the property that the guest may be attending or interested in attending. At the minimum, this should be part of the pre-shift briefing and a regular email to all staff and should ideally include back of house employee digital signage. But also be aware of what the guest has already booked into and what their itinerary is so you are not upselling a service they already have planned.
- * Know the selling points and highlights of each room type and what type of travel/number of travelers the room type is best suited for. For example, if a family of four comes to the front desk and they have booked a room with one king bed and pull-out couch, that would be the time to suggest they upgrade to a room with two queen beds and pull-out couch for an additional $30 per night because they would be more comfortable.
- * Know availability. Again, as part of the pre-shift briefing, availability should be checked and communicated to see if there are any room types that are oversold and would be given complimentary upgrades in order to balance room inventory. Also, check to see if some of the more exclusive room types are sold out as to not oversell a room type that cannot be fixed. Make sure that if a guest wants to upgrade for their entire stay, that the room type is available for the entire duration before upgrading them.
- * Ask every arrival. View every arrival as an opportunity. Some guests may not understand all of the room types so it is beneficial to inform them of the different options. For example, if a guest arrives and they are not booked in a strip view room but you do have one available, you could inform them that you have rooms with preferred views available. Ask about their stay, ask to assist with other amenities/services, ask what is bringing them to your town/property, ask about what kind of experience they are seeking. When combined with the visual display tool mentioned earlier the likelihood of upsell acceptance is increased.
- * Negotiate, don’t haggle or annoy. If a guest does not wish to purchase an upgrade, do not push the issue. Remember, guest satisfaction comes first. If a guest does consider an upgrade, remain professional during negotiations.
- * Live and understand the brand. Be authentic & consistent. Leverage your brand’s most important asset, your employees, to project your brands outward to all stakeholders with one homogenous message. Update: 06/10/10 – See related article link here.
Executives need to be trained to:
- * Stop assuming. It’s easy to do but I can tell you from experience through extensive travel and hotel stays that the front desk does not consistently (if at all) attempt to upsell guests. Commit to a tracking system that measures the results and impact. 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. The number of upsells, the average amount of upsells, and the total amount of upsells should be tracked on an individual and team basis. Success requires dedication, focus, emphasis and accountability. When the front desk is lined-up or when an agent is not comfortable or confident this will typically be the first activity to be dropped. Ask the question, identify the impact and personally verify consistent actions.
- * Recognize. “Sure, I’m making money for the hotel, but what’s in it for me?” Executives cannot underestimate the need to formally answer this question and recognize front desk agents for attempts and successes. Recognizing 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. Encourage metric review and goal setting, lessons learned sharing and recognize wins and losses.
- * Incentivize. No other Executive action recognizes better than a properly structured incentive program. A commission program to create incentives for the front desk perhaps by offering 5% of the upsell amount will further answer the question “What’s in it for me?”. 5% of 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. Using the previous upsell example of a 3 night reservation being upsold from $115/night 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.
The basics of up-selling have not changed. What has changed is the increased opportunity for front desk personnel to affect your bottom line through greater understanding of your room inventory, motivation and the use of more sophisticated systems and tools. As you can see, upselling is a win/win/win scenario for the property, front desk agent, and guest — if done correctly, and has the potential to generate more revenue with each check-in and surely deserves greater attention.
UPDATE: 12/16/2010: As an update to this post, now that the Cosmopolitan of Las Vegas is officially open to the public I can share with you the final incarnation of the technology that was deployed at the front desk to assist with the upsell process. Instead of the clumsy TV type display as proposed above, technology evolved to the point that I was able to cost effectively envision & roll out a first of its kind hospitality innovation to embed iPads into each reception desk and develop an application to display content about the rooms, various amenities and packages while also providing a green solution to eliminate paper at the front desk for terms & condition review, signature capture and invoice review at check in-/out. In addition to being green, it increases the speed and efficiency of the check in/out process while reinforcing the luxury guest experience.