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Successful front office upsell incentive programs
J. Marriott Jr., a foremost member of the hospitality industry, proclaims, "Motivate them, train them, care about them, and make winners out of them. They’ll treat customers right; and if customers are treated right, they'll come back." A well-organized Upsell Incentive Program within Rooms Division can exemplify virtually every sentiment conveyed by J. Marriott Jr. The essence of the program revolves around front office agents posing a simple question to the customer: "Would you like a better room?" A positive reply can yield added value to the customer's lodging experience, as well as prove lucrative for the employer and employee. Financial benefits aside, the program can also engender a confident departmental culture predicated upon knowledge of the product and its consumer. This article intends to: First, explain the underlying principles of "Upselling" and exhibit optimal lodging market segments for its utility. Secondly, dissect the benefits, pitfalls, and training associated with an Upsell program. Lastly, based on the conclusions drawn from the analysis, create a model Upsell contract between employer and employee that entails regulation to maximize the benefits and minimize the pitfalls. Since Upsell programs remain internal and specific to each hotel, the details and results associated are proprietary and protected under corporate domain. Hence, due to the limited availability of data specific to Upsell programs, testimonials and studies conducted in regard to incentive programs in general are drawn upon. Furthermore, having orchestrated and participated in successful Upsell Programs at multiple properties of a prominent luxury brand, this author can personally detail insights in attaining practical conclusions.
What is a Front Office Upsell Incentive Program?
Management generally constructs the amount of discount allowed in an attempt to protect rate integrity and levels of aggregate average rate. At any other time besides check-in, the guest must be quoted rack rate. Generally, either "floor rates" or a "minimum premium" amount from base category are established. Floor rates involve establishing a minimum amount for the type of suite that can be sold. For example, the Executive Suite valued at $1500 could be sold at a minimum of $850. Minimum premiums involve establishing additional amounts from a base room category to various higher categories. For example, the minimum amount for an Upsell from a Moderate category to an Executive suite category could be an additional $600 per night. The latter method can prove to be more complex as the base rate or category from which a guest is upsold can differ, thus warranting establishment of premium amounts from each category. Michal Katz, Front Office Manager of the St. Regis New York, maintains that when Upselling, rarely are guests offered upgrades at rack rate. Thus, given the range, the responsibility of offering a feasible rate acceptable to the guest, lies solely on the discretion of the agent. Based on the total revenue created by the Upsell ($2,250 in the example utilized), agents are compensated with a percentage of the gross, generally varying from 5% ($112.50) to 10% ($225). Consequently, it remains in the agent's interest to gauge the spending threshold of the guest, and offer a rate as close to rack as possible.
Who and when do you Upsell?
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