Summer is coming and with it the most important season for the majority of the hospitality industry. Often, even if hotels have digitalized reservations system, there may be cases of overbooking or mismatch of rooms. It may seem like a critical situation, but it can be a great opportunity. In such situations, since ancient times, companies have relied on room upgrades to keep the customer satisfied. 

What is a room upgrade? 

Room upgrades are an excellent way to differentiate your hotel from the competition and provide a memorable experience for your guests. It can also lead to increased revenue and customer loyalty. 

Why should hotels focus more on room upgrades?

If your company is not sure yet about the importance of room upgrades 

• The revenue. Empty rooms represent missed opportunities, and the first opportunity missed is the chance to generate additional revenue. Even if your company is performing well, a bump in revenue is always welcome. If your occupancy rate is not particularly high, this is a good moment to upgrade your rooms. Selling upgrade fees up lower-tier rooms, which are more likely to be booked and, in turn, generate more revenue. 

• The referrals. Room upgrades can also lead to positive reviews and word-of-mouth recommendations, which are highly influential in the booking process. Many guests check hotel reviews before booking, but word-of-mouth testimonials are even more effective. Room upgrades can make your customer’s stay more memorable and pleasant, increasing the probability that they recommend the hotel to others at the end of their stay. 

• The re-bookings. A guest who has enjoyed a magnificent stay in a higher category room is more likely to re-book with you, so room upgrades can also lead to repeat business. This is more likely to be the case with travelers who tend to come to most cities either for business trips, favorable tourist destinations, etc. For this reason, room upgrades are a way to build customer loyalty. 

• Enhance brand image. By offering upgraded rooms, hotels can also improve their brand image. Room upgrades offer guests a more luxurious experience, which can have a positive impact on the overall image of the hotel. This can increase brand loyalty and a reputation for excellent customer service and accommodation. 

How to take advantage of room upgrade

Room upgrades are an excellent way to differentiate your hotel from the competition. It is often believed that room upgrades mostly benefit guests and are merely a hotel’s solution to an inconvenience. But this is not entirely true. Here’s how you can take advantage of this. 

1. Train your staff. Your staff plays a vital role in selling upscale rooms. They must know what upgrades are available, their features and benefits, and how to communicate them effectively to guests. Provide your employees with training and resources to help them sell upgrades effectively. 

2. Target the right guests: Not all guests are interested in an upgrade and not all can afford it. It is essential to identify guests who may be interested in an upgrade and who can afford it. You can use data from your customer relationship management (CRM) system to identify guests who book premium rooms frequently or who have a high lifetime value.

3. Offer upgrade options: providing upgrade options is a great way to appeal to guests’ diverse preferences and budgets. You can offer different room types, such as a suite, a room with a view, or a room with a balcony, etc. Another option is to offer different packages that include additional amenities, such a spa treatment, a bottle of wine or a gourmet dinner. 

4. Create a sense of urgency: one way to increase the likelihood that a guest will accept an upgrade is to create a sense of urgency. You can do this by offering limited-time promotions or by highlighting the benefits of upgrading during the booking process or check-in. This technique is also known as FOMO, fear of missing out. 

5. Personalize the experience: Customization is the key to a successful room upgrade. Some tools track the data in order to customize the upgrade options and packages you offer. For example, through the web app, the guest can request some services or products; if we know from the data that they are a frequent guest and have that pattern, we can target the next stays in a way that creates a memorable experience for the guest.

How to effectively implement room upgrades

Here are some tips on how to offer room upgrades effectively:

1. Offer upgrades at check-in. This lets hotels evaluate their inventory (this can be through their hotel inventory management system) and offer upgrades based on availability. It also gives guests the chance to see the upgraded rooms before committing to pay the additional cost. 
2. Promote upgrades ahead of arrival. By promoting them prior to the client to arrive, hotels can generate interest and encourage guests to consider upgrading their room. Email marketing, social media or other promotional channels are essential to do this.
3. Combine upgrade rooms with other services. While creating the offers, we can get creative. Offering a package that includes a better room along with other amenities (breakfast, spa services, etc.) can make the upgrade more attractive to the customer, and increase the perceived value. 

To sum up

Offering room upgrades is a smart strategy for hotels looking to increase their guest satisfaction and revenue. Having provided guests with more luxurious amenities and experiences, hotels can create a lasting impression that leads to repeat stays and positive reviews. Moreover, offering upgraded rooms can be a lucrative source of revenue for hotels. By implementing effective strategies and with the help of technological tools, hotels can offer upgrades to their costumes and reap the benefits of this strategy.