Now that the recovery of the tourism sector is a reality, it is a good time to anticipate and start thinking about strategies that improve our income. Among the techniques and tools that a Revenue Management can use, there are two well-known and related to each other named up-selling and cross-selling. It is about trying to ensure that the income generated from a reservation does not only come from the income generated by the accommodation. Customer acquisition is becoming more and more expensive and for this reason an attempt should be made to maximize the income generated by the customer already acquired. In the following lines we explain what these two techniques consist of and how they can help you increase the profits of your establishment.

We can define up-selling as a Revenue strategy that consists on offering the customer a product or service of higher value than the one originally chosen. Previously, the company must identify in its inventory services, products or attributes that the client can perceive or value positively to justify that extra cost for which they are going to pay, such as a larger room or sea views. Keep in mind that up-selling can only be done at a specific time, which will either at  the moment of making the reservation or at the check-in at the hotel.

On the other hand, cross-selling, is a strategy that consists on offering the customer a complementary product or service. If, in the case of a hotel, its main source of income is the rooms, the rest of the services offered would be the so-called complementary services or services that are not part of the main offer. Unlike up-selling, this cross-sell can be offered at any time during the stay. In hotel chains that have several establishments, cross-selling can also be done by offering the client another accommodation different from the one initially requested, if for example there is no availability, and in this way, not losing that sales opportunity.

If you are determined to implement these two strategies in your establishment, you must first plan and review these 3 fundamental pillars:

• Training of the personnel involved.

It is important to know when and in what way we can offer each service, and for this fundamental task we will have to have prepared, trained and qualified human resources who know how to detect the needs of each client in order to take advantage of sales opportunities, since in cases such in up-selling, they will not be repeated.

• Ensure fluid communication between departments.

Vertical communication has to flow naturally. If the strategies that are proposed are oriented to the entrance of income, it is necessary that the operational departments have smooth communication and directly with the Revenue department, the Commercial department and the Reserves department.

• Correct segmentation and previous analysis.

It is important to know how to identify our potential client, since it is evident that we cannot offer the same service or product to everyone, each one has different needs. For this reason, it is essential to have an adequate CRM database that can segment all our clients and thus be able to identify their needs.

Beyond all this and in another phase of the funnel, we have surely managed to turn the client’s stay into an unforgettable experience that they will want to share and hopefully it will have a positive impact on our online reputation, and the visibility of our product on social networks.

If you need advice, do not hesitate to contact our Medplaya Management Services team, we will be happy to help you and expand this information or other information related to our services.