A night of playing board games has become a visit to the escape room, going to the park with the kids has become a trip to the climbing gym, and beers out with friends has turned into themed tours of local pubs, notes Forbes. Though millennials’ insatiable desire to do things rather than collect things has led the surge in the experience economy, the desire for experiences certainly isn’t limited to just one generation. Retirees flock to birding retreats and families are just as likely to be found on zip lines in the Yucatan as they are building sand castles on the beach. While Airbnb has played a substantial role in creating the experience economy, hotels are where it all began. But hotels have long positioned themselves as a product—differentiating themselves from one another according to thread counts and room size more than how the guest will feel and what they will do.
The modern front desk has evolved alongside shifting guest habits and desires. Just as many banks have tellers at floating counters now—giving their patrons less the sense that tellers are gatekeepers, and more a sense that they’re helpers at the ready—hotels have released the front desk to move about the lobby, tablet in hand, offering to help guests find their way instead of directing them to their room. In the old model with the front desk agent typing furiously behind an imposing counter, upselling was just upselling. That is, trying to get the guest to pay more for something bigger or better. But it’s time to re-envision what upselling is and how it happens, and now, as the front desk is changing, an ideal opportunity presents itself.
Re-envisioning upselling requires first reframing what’s being sold. Hotels are offering guests more than a product, more than a bed and a bathroom. Although traditional upselling has focused on essentially upgrading from small bed and bathroom or to a bigger bed and bathroom, from a King-size standard to a junior suite, the guest already knew what kind of space he needed when he booked. The front desk must necessarily think beyond adding extra space for extra money to helping the guest create the experience they had envisioned. If, for instance, the front desk agent can determine that a guest is a hiker and one section of rooms is adjacent to the trailhead with views of the preserve that surround the property, and there’s a slightly larger room available in this area, then that is a compelling experiential upgrade.
Or consider a guest who has already booked two spa appointments and clearly plans to spend a good bit of time there. Perhaps she overlooked the spa suites that connect directly to the spa. Were she to stay in one of them, she would have direct access to the spa jacuzzi. Even if she had considered the spa suites during the online booking process, she might feel differently about it now that she’s at the front desk ready to begin her adventure. She may have been more price sensitive six weeks ago when she booked. Since then, however, she has received an unexpected bonus; she needs to recover from a stressful period at work that results in the need to really pamper herself; or she may have had the realization that this is the only time she’ll get a vacation this year. We can’t predict what changes for the guest between booking and arrival, but the front desk can always offer opportunities to improve the experience.
To avoid making upselling feel like, well, upselling, front desk agents must necessarily and clearly add value, and the only way to add value is to understand what the guest values. Not every front desk agent will be able to pick up on this in the moment, but AI-powered recommendations can serve up customized opportunities for upselling at the point of check-in based on what it knows about the guest (or what it can deduce about a new guest based on millions of historical data points). This saves the front desk agent the energy of trying to ascertain what the guest wants. Even with guest preference data on hand, the time it can take to determine what to offer is valuable time that the guest doesn’t want to spend standing at the front desk.
Further, when AI-powered upgrades are generated for the front desk to offer, the prices are based on the probability that the guest will book a particular upgrade at a particular rate, a price that the system knows has been accepted in the past. This increases the odds that the guest will see value in the offer. Further, better experiences lead to increased guest loyalty.
When we reframe upselling as an effort to improve the guest experience—a way to deliver more of what the guest wants without giving it away—naturally, it’s easier to get the front desk on board than when they feel they’re pressuring the guest to buy an extended warranty. While AI can create probabilities that a guest will book a particular upgrade, and at what rate, the human touch is essential for hospitality to be delivered. Websites and mobile alone can’t do what an agent can do in mere seconds, such as making eye contact, describe the experience, point out the conveniences, talk about the activities on-site, and contextualize the whole experience for the guest leading them through the reasons they will appreciate the upgrade.
Hotel upselling re-envisioned means upgrades and improvement to the guest experience as opposed to a mindless grab for more dollars over an increase in square footage. Consider this example of a negative upselling re-envisioned: an airport hotel, instead of discounting rooms on the runway, raised the rates and sold them to families as a great experience for children (HospitalityNet).
Any aspect of the hotel experience will be perceived differently depending on the guest. Giving the front desk the AI tools as well as the ability to rethink the “why” of upselling will not only generate revenue, it will also make long-term guests.
About Jason G. Bryant, Nor1 Founder and CEO
Jason G. Bryant, Nor1 Founder and CEO, oversees day-to-day operations, provides visionary leadership and strategic direction for the upsell technology company.
With Jason at the helm, Nor1 has matured into the technology leader in upsell solutions. Headquartered in Silicon Valley, Nor1 provides innovative revenue enhancement solutions to the hospitality industry that focus on the intersection of machine learning, guest engagement and operational efficiency.
A seasoned entrepreneur, Jason has over 25 years experience building and leading international software development and operations organizations. Prior to Nor1, he founded and grew DRCI into a world-class offshore software development organization which maintained facilities in India and Mexico. DRCI focused on providing services to the travel industry, specialized in both high-volume transaction systems and internet technologies.
Jason is a frequent speaker on technology and entrepreneurship. He earned a Bachelor of Science degree from the University of Michigan. Jason also volunteers his time to a number of non-profit organizations. He currently sits on the boards of CYC – Giving Foster Youth A Voice and Impact As One, a Silicon Valley based technology non-profit.
About Nor1, Inc.
Nor1 is founded on a rich heritage of hospitality technology innovation. Using our wealth of industry knowledge, we are committed in the task of helping hotels upsell their rooms and attributes using our proprietary decision engine.
With over 3500 installs worldwide, Nor1 has developed new and innovative products and consultative services that empower today’s hotels to take control of their guest engagement and revenue destiny and grow their business more effectively.
Nor1′s real-time pricing and merchandising intelligence engine, PRiME®, powers eStandby Upgrade®, eXpress Upgrade™, CheckIn Merchandising™, eReach™, and eDirect™ to recommend the most relevant upgrade to the right guest at the right time for the most optimal price.
Investors include Concur Technologies, Goldman Sachs, and Accel Partners.
For more information, please visit www.nor1.com.
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