Upselling vs. hotel cross-selling: what is the difference and when to use them to maximise earnings
In the competitive arena of hospitality, optimizing every revenue opportunity is essential.
Two frequently mentioned—and sometimes confused—sales techniques are upselling and cross-selling.
Understanding the difference and knowing when to apply each is crucial to improving both profits and the guest experience.
Although the term “hotel upselling” is often used as an umbrella term that also includes cross-selling, it’s important to distinguish the two strategies to fully leverage their potential.
Upselling: enhancing the experience (and the bill)
Upselling is a sales technique aimed at encouraging existing customers to purchase higher-category products or services than those they originally selected.
The goal is twofold: increase hotel revenue and enhance the customer experience by offering a superior level of quality.
Classic examples of upselling include:
Offering an upgrade from a standard room to a superior room, junior suite, or suite;
Proposing rooms with premium features such as a stunning view, private balcony, luxury bathtub, or simply larger square footage;
Allowing early check-in or late check-out, which, if offered for a fee, represent an upgrade in flexibility from the standard stay.
In essence, upselling focuses on improving the core product or service the customer has already purchased, pushing them toward a more expensive option within the same category.
Cross-selling: enriching the stay with complementary offers
Cross-selling, on the other hand, aims to propose complementary products or services to those already purchased, often from different categories.
The objective is to add value to the guest’s overall experience.
Common examples of cross-selling in hospitality include:
Offering spa packages or wellness treatments;
Proposing the addition of breakfast or premium dining options (special dinners, tastings);
Suggesting transportation services like airport shuttles or bike rentals;
Selling guided tours or tickets to local attractions through partnerships;
Offering in-room extras such as fruit baskets, fine wine bottles, or special arrangements for occasions.
In this case, the core booking (the room) remains unchanged, while additional services or experiences are added to complement the stay.
The key difference in summary
The fundamental distinction lies in the nature of the offer:
- Upselling: selling something superior (an upgrade).
- Cross-selling: selling something additional or complementary.
Understanding this difference helps craft more accurate offers and communicate value more effectively.
Why both strategies are crucial for maximizing revenue
Both upselling and cross-selling are pillars of a strong revenue management and guest experience strategy for several reasons:
- Highly profitable revenue increase: Both techniques target guests who have already made a booking. The acquisition cost for this additional revenue is therefore very low. Upsell and cross-sell offers can significantly increase revenue per guest, with some hotels generating between €35 and €200 in extra revenue per guest per month through automated upselling. Studies show upselling strategies can lead to overall revenue increases of 10% to 30%.
- Enhanced guest experience and satisfaction: When executed well, upselling and cross-selling offer guests the opportunity to personalize and enrich their stay. Relevant, tailored offers based on guest data and preferences increase the perception of value and make the experience more memorable. This transforms a simple transaction into a personalized service.
- Building guest loyalty: When guests feel understood and appreciated through personalized offers that improve their stay, they are more likely to become loyal to the property. Companies that successfully implement upselling strategies report a 75% increase in customer retention.
- Optimizing inventory and services: Upselling (to higher-category rooms) and cross-selling (of ancillary services like spa or F&B) allow for maximized use of all hotel facilities. This is especially relevant today, with increased focus on non-room revenue and metrics like RevPAM² (Revenue per available square meter).
- Market differentiation: Unique offers and the ability to deeply personalize the experience can set a hotel apart from the competition.
When to use Upselling and Cross-selling (Key moments in the guest journey)
The effectiveness of upselling and cross-selling depends heavily on timing and context.
Opportunities present themselves throughout the entire guest journey:
- Before booking: On the website or social channels, premium options (upselling) and additional services (cross-selling) can be showcased to build anticipation and interest.
- During booking: Integrating upsell (e.g., room upgrades) and cross-sell (e.g., breakfast, spa packages) offers directly into the booking engine can capture interest at the point of purchase.
- Pre-arrival: This is a crucial phase. Guests have already confirmed their stay and are often willing to spend more to enhance their experience. Personalized offers via email or app (such as room upgrades, early check-in, or restaurant/spa bookings) tend to have high conversion rates. Optimal timing may vary based on hotel type (resort, city, airport).
- At check-in: In-person interaction at the front desk offers a valuable opportunity. Staff can assess the guest’s mood and make personalized suggestions. Room upgrade offers or instant service add-ons (like lounge access) are effective at this stage. While check-in alone can generate high revenue per offer compared to pre-arrival, the most effective strategy combines both approaches.
- In-stay: Even after check-in, there are cross-selling opportunities. Through the hotel app, in-room tablets, or targeted messaging, additional services like spa treatments, enhanced room service, or recreational activities can be offered. Room upselling is less feasible during the stay, but “enhancements” or experience packages can still be proposed.
- At check-out and post-stay: At check-out, guests can be invited to join loyalty programs (which may include future upgrades or services). Post-stay, follow-up offers or discounts on services for a future visit fall into long-term upselling/cross-selling.
Strategies for successful Upselling and Cross-selling
To make these techniques effective, a strategic approach is essential:
- Personalization and segmentation: Use guest data (preferences, booking history, segment) to offer targeted proposals. A business traveler may appreciate a room upgrade with better workspace or access to business services, while a family may be interested in connecting rooms (cross-selling) or child-friendly amenities.
- Focus on benefits, not just features: Describe how the offer enhances the guest experience rather than simply listing features. An upgrade isn’t just “more space,” but “the comfort of a larger, more relaxing environment.” A spa treatment isn’t just a service, but “a moment of pure relaxation to unwind after your trip.”
- Use technology (Upselling software, PMS, CRM): Dedicated upselling tools and integrations with Property Management Systems (PMS) and Customer Relationship Management (CRM) are essential to automate, personalize, manage offers in real-time, and track performance. This enables delivery of the right offer, to the right guest, at the right time, on the most effective channels (email, app, front desk).
- Staff training: Frontline staff (especially at the front desk) play a crucial role. They must thoroughly know the offers, recognize opportunities, and propose them naturally and non-invasively. They can be incentivized based on the revenue generated.
- Contextual timing: Offer what the guest might need at the most appropriate moment. For example, early check-in to a guest arriving in the morning, or a spa offer on a rainy day.
- Dynamic pricing: Apply dynamic pricing strategies to upselling and cross-selling offers to optimize revenue based on demand and occupancy.
- Presentation techniques: Consider techniques like the “sandwich” strategy (presenting three options, making the middle one most appealing) or “social proof” (quoting positive reviews related to the offered upgrade or service).
While upselling aims for a “better” experience within the same category, cross-selling targets a “more complete” experience by adding complementary services.
Both strategies are powerful levers to increase revenue, improve satisfaction, and build guest loyalty.
An integrated approach that leverages data, technology, and proper staff training—delivering personalized offers at the right moment—is the key to maximizing profits and delivering unforgettable stays.