What is hotel upselling and why it should be your priority in 2025
The hotel industry is constantly evolving, and to remain competitive and thrive, hotels must explore every possible avenue to optimize profits and enhance the guest experience.
Among these strategies, upselling stands out as one of the most powerful and relevant for 2025.
What Is Hotel Upselling?
In simple terms, upselling is a sales technique aimed at encouraging existing customers to purchase higher-tier products or services.
In the hotel context, this means offering guests the opportunity to enhance their original booking with room upgrades, additional services, or premium experiences.
The goal is twofold: to generate incremental revenue for the hotel and to significantly improve the guest experience.
While upselling focuses specifically on offering something “superior” (like an upgrade to a more luxurious suite), there’s a closely related technique called “cross-selling,” which promotes “complementary” services (such as a spa package or breakfast inclusion).
It’s important to note that the term “hotel upselling” is often used as an umbrella term that also includes cross-selling.
Common Examples of Hotel Upselling:
- Offering premium rooms (suites, junior suites, sea-view or balcony rooms)
- Early check-in
- Late check-out
- Enhanced F&B services (such as a gourmet dinner or fine wine)
- Adding wellness services (like spa treatments or massages)
Why Should Upselling Be a Priority in 2025?
There are several reasons why upselling is not just a useful tactic but a crucial element of hotel success in the coming year:
1. Generation of High-Margin Revenue
Upselling targets guests who have already made a reservation. This means the acquisition cost for this additional revenue is very low, making it one of the most profitable revenue streams.
Sources indicate that upselling is 68% more cost-effective than acquiring a new customer. Some hotels generate between €35 and €200 in extra revenue per guest per month through automated, personalized upselling.
Studies show that upselling strategies can lead to a 10% to 30% increase in total revenue.
It goes beyond room bookings, allowing hotels to maximize revenue from all service areas (F&B, spa, transportation, etc.).
2. Enhanced Guest Experience and Satisfaction
Effective upselling is not merely transactional, but an opportunity to enrich the guest’s stay.
It allows guests to personalize their experience based on their preferences and needs.
In an era where modern travelers seek freedom and customization, tailored offers make them feel valued and turn a standard stay into a memorable experience.
3. Increased Guest Loyalty
Personalized offers show a deep understanding of guest preferences and help build long-lasting relationships.
When guests feel the hotel is committed to meeting their needs and enhancing their stay, they are more likely to return and recommend the property.
Statistics suggest that businesses that successfully implement upselling strategies see up to a 75% increase in customer retention.
4. Adapting to 2025 Trends
The year 2025 brings several trends that make upselling even more vital:
- Generational Shifts: The rising influence of Millennials and Gen Z—tech-savvy and focused on value and personalization—demands tailored upselling strategies.
- Experiential Travel: Growing demand for deeper connections and meaningful experiences (local activities, workshops, tours) creates extensive upselling opportunities beyond the room.
- Focus on Ancillary Revenue: Rising operational costs push hotels to focus more on non-room revenue, shifting attention to metrics like Revenue per Available Square Meter (RevPAM²).
- AI and Machine Learning: These technologies enable scalable hyper-personalization, allowing highly relevant, real-time, behavior-based offers.
- Hyper-Contextual Upselling: Offering what the guest needs at the right moment, based on data and behavioral triggers, makes upselling feel like thoughtful service.
- Sustainability: Offering eco-friendly upsell options not only drives revenue but aligns with the values of environmentally conscious travelers, especially younger generations. In fact, 47% of Gen Z travelers are concerned about the environmental impact of their trips.
5. The Need for Automation and Scalability
In a landscape marked by unpredictable demand and staffing challenges, manual upselling programs are no longer sustainable or scalable.
Automation—often enabled by dedicated software integrated with PMS and CRM systems—is essential for efficiently and consistently selecting, pricing, and presenting offers across multiple channels (email, app, front desk, etc.).
A Holistic Strategy for Sustainable Growth.
Hotel upselling in 2025 goes far beyond simply adding revenue.
It is a holistic strategy that, when executed correctly, leverages advanced technology, deep guest understanding, and perfect timing to create personalized experiences that lead to greater satisfaction, lasting loyalty, and ultimately, profitable revenue growth.
Making upselling a priority means investing in both the hotel’s financial future and in the quality of the stay offered to each guest.