Stop Leaving Money on the Table: Upsell Like Airlines to Boost Revenue
27 March 2025
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.
Harnessing Tools & BI for More Successful Upselling
There are very few things that stop you from starting with upselling. However, if you want to perfect your upselling and gain more revenue, the next step is to implement tools for analysis and automation.
Identify High-Potential Guests
Use historical data to pinpoint which segments and individual guests are most likely to purchase add-ons—perhaps business travelers value premium Wi-Fi and corporate lounge access while families gravitate toward breakfast packages or adjoining rooms. A BI solution like Demand Calendar quickly surfaces these patterns so you can focus on upsell efforts where they have the highest likelihood of conversion.
Leverage Automated Upselling Platforms & Booking Engines
A user-friendly booking engine on your website makes it simple for guests to reserve more than just a room—think dining experiences, spa appointments, or local tours—all in one flow. Automated upselling tools can also push targeted offers via email or app notifications pre-arrival, ensuring every guest sees relevant options at the right time.
Analyze & Refine with a BI Tool
Monitor total spend per guest and evaluate which add-ons yield the highest returns. With a BI platform like Demand Calendar, you gain real-time insights into conversion rates, profit flow-through, and emerging revenue opportunities. This continual feedback loop helps refine offers, boost ancillary revenue, and maintain high levels of guest satisfaction.
Overcoming Common Resistance
When you decide to start upselling, you will meet some resistance that you must manage. Here are a few ideas.
Staff Training & Incentives
Equip team members with the skills to confidently suggest relevant upgrades without feeling pushy. Provide clear scripts or guidelines and highlight real examples of successful upsells. Motivate staff by offering small bonuses, recognition programs, or career development incentives tied to upsell performance.
Guest-Centric Messaging
Rather than framing add-ons as extra fees, present them as convenient enhancements that save time or offer a better experience—like a seamless airport transfer or a late checkout for a relaxing morning. Keep the tone solution-focused and emphasize the benefits from the guest's perspective.
Process Integration & Profitability
Make upselling a natural part of day-to-day operations by embedding it into SOPs (front-desk checklists, digital touchpoints, reservation scripts). At the same time, ensure that every product or service offered generates a solid margin—consider labor costs, cost of goods, and supply limits. Tracking flow-through (the portion of new revenue that converts to profit) ensures your upselling strategies remain guest-friendly and financially viable.
Putting It All Together: A Step-by-Step Action Plan
Aim High: Set Double-Digit Ancillary Revenue Goals
- Don't settle for single-digit contributions from add-ons. Establish a bold target: 10% or more of total revenue from upselling and cross-selling.
- Communicate these targets across all departments (Front Office, F&B, Spa, etc.) to drive a coordinated effort.
Design High-Margin Products & Experiences
- Focus on products and services that require minimal extra labor or materials, such as exceptional room amenities, premium dining options, and unique local experiences.
- Ensure each offer is appealing to guests and capable of delivering strong profit flow-through.
Equip Your Team with Tools & Processes
- Develop scripts for front-desk agents, email templates for pre-arrival offers, and on-property prompts (e.g., QR codes, in-room flyers) that encourage impulse buys.
- Provide thorough training so staff feel confident in upselling without appearing pushy. Link incentives—like bonuses or recognition—to clearly defined upsell KPIs.
Implement BI for Real-Time Performance Tracking
- Select a robust BI platform (e.g., Demand Calendar) that integrates with your PMS and CRM to gather all performance data in one place.
- Track metrics like conversion rates, revenue by add-on type, and net profit after labor/material costs. Use insights to refine product offerings, adjust pricing, and optimize your approach.
By combining ambitious goals with carefully crafted offers, structured team support, and data-driven insights, hotels can dramatically boost ancillary revenue, moving it from single digits to a more impactful share of total revenue.
Conclusion
Upselling isn't just a nice-to-have; it's a powerful, largely untapped revenue stream that can significantly boost hotel profitability and enhance guest satisfaction. By taking a cue from airlines, who routinely earn a substantial share of their revenue through ancillary sales, hotels can shift from passive interactions to active value creation. The key lies in marrying a guest-centric mindset with data-driven insights, ensuring every offer resonates with the right customer at the right moment. When you arm your teams with the right tools, training, and incentives, you transform ordinary stays into memorable, revenue-generating experiences.
Final Key Takeaways
- Think Big: Don't limit yourself to single-digit ancillary revenues—set ambitious goals and collaborate across departments to make upselling a central focus.
- Focus on the Right Offers: Prioritize high-margin products and services that guests want. Be creative, but keep an eye on profitability.
- Leverage Technology & Data: A business intelligence platform like Demand Calendar gives you real-time visibility into guest spending and upsell performance, helping you refine strategies.
- Train & Incentivize Your Team: Upselling success hinges on staff confidence and motivation. Provide scripts, transparent guidelines, and rewards for meeting upsell targets.
- Keep the Guest at the Center: Position every add-on as a genuine enhancement—whether it's convenience, comfort, or a memorable experience. Upselling can elevate your brand and boost loyalty while driving revenue growth.