5 minute read
Sustainable Revenue Growth: The Power of Upselling and Coherent Guest Engagement Strategies
By Valyn Perini, Strategic Partnership Senior Director, Oracle Hospitality
Historically, revenue management professionals have worked hard to create room pricing strategies that meet their hotels’ commercial goals and provide a guest-friendly price point, but the revenue management strategies have traditionally stopped when guests confirm their reservations.
So what happens after that reservation confirmation comes through? Few hotels extend any pricing strategy to upselling across the guest journey. For years, determining what upsell offer to present and how to price them was ad hoc and primarily completed at the front desk because upselling functionality on digital channels was rudimentary. There was no way to understand upsell demand, meaning there was no way to forecast upsell revenue.
The price difference between the booked room and the upgraded room is a static pricing mechanism with no intelligence behind it.
Further, as more hotels adopt forecasting demand by guest room type, fluctuating room rate differentials can become an unusable reference point for upsell value.
But now, there’s good news. Consumers have become accustomed to targeted digital merchandising, and hotel guests are no different. They expect to see personalized offers, and they want the opportunity to customize their hotel experience.
The declining cost of data and technology, especially AI and machine learning, makes it possible for hotels to extend their revenue strategy to upselling by engaging with guests wherever they prefer – on the booking engine, via email, through text/chat/SMS, with mobile check-in services and kiosks, or even in-person at the front desk.
The strength of AI is its ability to sift through millions of data points of past guest interactions with upsell offers, then select, price, and present offers with a high probability of acceptance, leading directly to increased revenue. Not just limited to room types, upsell offers can include attributes such as a city view, higher floor room, or a balcony, as well as services like early check-in and late checkout and ancillaries like food and beverage offers or parking – whatever makes financial sense for the business.
Combine that with the opportunity to automatically present upsell offers across the guest journey, and you’ve got a coherent guest engagement strategy that will generate recurring and forecastable revenue along with a revenue strategy that extends beyond the reservation confirmation.
Oracle Hospitality’s Nor1 Hotel Upsell Solutions provide these solutions today. Contact us today for more information.
