Torres Hospitality Consulting

Frequently Asked Questions about supplementary income and upselling

The most frequently asked questions from hoteliers about ancillary revenue, upselling and revenue management, answered directly.

Block 1 - Concepts and metrics
01What exactly are ancillary hotel revenues?

Everything the guest pays in addition to their room rate: breakfast, early check-in, late check-out, spa, parking, dinners, transfers, or experiences. It also includes payments from non-guests.

We add a nuance: room upgrades are also ancillary revenue, even though many hotels hide them within the room rate. That's why we treat upsells and ancillary revenue as a single system, the Upcillary Program™. Guests don't see the difference, and neither should your team.

If you want to see how that system is structured step by step, we explain it here: Upcillary™ Program.

02What is the difference between upselling, cross-selling, and suggestive selling?

Think of a car dealership. Upgrading to a higher model is upselling. Adding extras is cross-selling. And the salesperson who first asks you what you use the car for, and then makes a recommendation, is doing a suggested sale.

In a hotel, it's the same: upgrading from Standard to Superior with a view is upselling; adding a dinner or spa treatment is cross-selling. The practical difference is less than it seems, because all three techniques succeed or fail for the same reason: whether or not they begin by understanding why that guest is traveling.

Each week we develop one of these ideas in the newsletter: HospiTECHlityAnd if you prefer the full framework, it's in the book. Mastering Hospitality Ancillary Revenue.

03What percentage of total revenue should ancillary income be considered?

There is no universal figure. The figures circulating range from 10% to over 30%, and almost all of them come from technology providers. A resort with a spa and three restaurants cannot be compared to a city bed and breakfast.

Our recommendation: compare yourself to your own past performance first. Measure your ancillary revenue per occupied room, month by month, and then compare it to hotels in your category. In diagnostics, the useful question is rarely how much you should be earning, but rather how much you're currently losing.

For a first estimate of that figure in upgrades, you can use our Free upgrade calculator.

04Should I look at RevPAR or TRevPAR?

In both cases, because they answer different questions. RevPAR tells you how well you sell the room. TRevPAR tells you how much each available room is worth to the entire hotel.

Measuring only RevPAR is like judging a restaurant by its occupied tables without considering the average check. Two hotels with the same RevPAR can have very different results. And there's a less visible effect: if reports and incentives only focus on RevPAR, the team will only sell rooms.

In the Upcillary™ diagnostic, the first thing we do is put both metrics in the same table. If you want to start there: Let's talk.

05Does more revenue always mean more profitability?

No. The metric that indicates this is GOPPAR, gross operating profit per available room. A high-cost package can increase revenue but decrease margin.

That's why we start with what costs almost nothing: upgrades to superior rooms that were going to be empty, early check-in, or late check-out. That revenue goes almost entirely to the bottom line. Only then does it make sense to add new services.

With that order, at Port Hotels we documented a +324% in ancillary revenue and a +94% in room upsells. The details are in the Port Hotels Case.

06How do I measure if my upselling program is working?

With few indicators, reviewed weekly:

  • Conversion by offer and by receiving agent.
  • Additional income per occupied room.
  • Exposure: percentage of guests who received at least one recommendation.
  • Income from upgrades, separate from the rest.

What isn't measured every week fades away in three months. That's why follow-up is a key phase of the Upcillary™ Program: the agent ranking isn't for singling anyone out, but for identifying who to support.

If you want to see what that tracking looks like in practice: Upcillary™ Program.

Block 2 - Strategy, product and price
07What sells best in a hotel?

Focus on what addresses a genuine guest need, not what looks best on paper. In our experience, the order of attack is usually as follows:

  1. Room upgrade.
  2. Early check-in and late check-out.
  3. Breakfast or half board, when not included.
  4. Experiences linked to the reason for the trip: the anniversary dinner, the spa after the congress.

A catalog of 25 extras works like a restaurant menu with 80 items: the customer gets overwhelmed and ends up ordering the same old thing. Fewer, better-chosen options sell more.

In the diagnostic process, we identify which three or four products have the greatest potential in your hotel. You can start here: Let's talk.

08At what point during the stay should I offer each thing?

Every moment has its product:

  • Pre-arrival: What needs planning, such as transfers, early check-in, or a special dinner.
  • Check-in: The room upgrade, because there's conversation there and the guest is already seeing the hotel.
  • Stay: restaurant, spa and late check-out.
  • Exit: The next booking, direct.

The most common mistake is offering everything at once in the same email or at the same counter. Streamlining the customer journey is one of the first tasks of [the company/initiative]. Upcillary™ Program.

09Does pre-arrival sales or reception sales work better?

Both exist, and they don't compete. Published data contradicts itself depending on who publishes it, but academic research agrees on one thing: online sales do not replace in-store sales.

Our take: Technology gives you reach, because it connects you to every single guest. The front desk fosters conversation, because it understands the reason for the trip. If you only automate, you miss out on the most valuable conversations. If you rely solely on the front desk, the outcome depends on who happens to be on duty.

How to combine both channels in your hotel is exactly what we work on. the Upcillary™ Program training.

10How do I price an upgrade?

Don't use the full rate difference between categories. Guests are comparing to what they've already paid, not your published rate. A slightly lower price that converts is worth more than an empty superior room.

Adjust it to occupancy: if the higher category is going to sell itself, don't lower the price; if it's going to be vacant, convert it into revenue. And at reception, three rules: price per night, at the end of the recommendation, and without apology.

To see how much is lost today by not pricing upgrades correctly: Free upgrade calculator.

11When does it make sense to give an upgrade as a gift?

Offering a free upgrade should be a deliberate choice, not a habit. It's justified to address overselling, recognize a loyal customer, or compensate for a problem.

Every upgrade given away out of habit is one you can no longer sell, and probably one you won't be able to offer to tomorrow's VIP. In many hotels, we see upgrades given away daily while the staff has never learned how to recommend them. Our rule: free upgrades are decided by revenue or management, not improvised at the front desk.

The Free upgrade calculator estimate that invisible cost for your hotel.

12Should I charge for early check-in and late check-out?

Yes, when you can guarantee it. The guest agrees to pay for certainty: a guaranteed time, not a "if possible." What generates complaints is the surprise charge or charging without explanation for something that was previously free.

One approach that works: maintain complimentary rooms when same-day availability, and pre-sell the guaranteed version. This requires coordinating with housekeeping to prioritize those rooms.

We analyze these types of decisions, with real-world examples, in HospiTECHlity.

13How do I generate revenue from underutilized spaces or non-staying guests?

Start with a simple map: which spaces are empty and at what times. Spa, gym, terrace, restaurant at lunchtime, meeting rooms or parking usually have clear openings.

From there, options such as day passes, resident passes, or local events during the off-season become available. The condition is simple: they must not negatively impact the experience of the guest staying at the hotel.

If you want to check which spaces have tours in your hotel: Let's talk.

14How do I recover margin on bookings received through OTAs?

The OTA brings you the guest, but from the moment they arrive, the relationship is yours. Upsell and cross-sell revenues are commission-free, so they're the most direct way to improve the net margin on that booking.

Furthermore, those who book through OTAs tend to choose the cheapest category: they're your best candidate for an upgrade. And a good stay is the first step towards a direct booking next time.

How we applied it in a real case: Port Hotels Case.

Block 3 - Technology
15What conversion rate is "normal" in upselling?

There is no single figure. Published figures range from 2% to 25%, but they rarely measure the same thing. Some divide by emails sent, others by guests, and still others by offers viewed.

Before comparing yourself to anyone, set your own benchmark and keep it constant. Then, track your progress month by month. And if you can only follow one number, let it be the additional revenue per occupied room: that's what goes into the profit and loss statement.

In the Upcillary™ diagnostic, we establish that baseline from day one: Upcillary™ Program.

Block 4 - Teams, training and incentives
16Do I have to pay commissions to the reception team? How much?

Yes. A sales program without incentives rarely lasts. And it must be individualized: each person is paid based on what they themselves have generated. It's the clearest way to recognize everyone's effort.

A good incentive plan is:

  • Simple: Any receptionist knows how to calculate what they have earned.
  • Fast: It is paid every month, not at the end of the year.
  • Fair: Payment is made on what was actually collected, not on what was cancelled.
  • Traceable: Each sale is recorded with the name of the person who made it, so that each person is paid exactly what they have generated.

Designing that plan is part of the consulting phase of Upcillary™ Program.

17How to sell without seeming aggressive?

The resistance within the team almost always stems from confusing recommendation with selling. A waiter who only takes orders and one who recommends the daily special are doing the same job, but the latter leaves a better impression and a larger bill.

At reception we work a simple sequence: first the Reason of the trip; then the Name exact room number; then two Advantages translated into Benefits for that guest; and the Amount At the end of the night, without apology. We avoid words like "offer," "sell," or "do you want an upgrade?"

This is how we train with real equipment: the Upcillary™ Program training.

18Is one-off training enough? Should I use scripts?

A one-off training session might boost results for a few weeks, but then they return to their previous level. What lasts is the combination of initial training, practice with role-playing, and weekly follow-up with data.

That's why the Upcillary™ Program has four phases: diagnosis, consulting, training, and follow-up. The fourth phase is the one most hotels skip, yet it's the one that sustains the results. Scripts do help, but as a structure that the receptionist internalizes, not as a text to be recited.

If your team has already received training and the effect has diminished, start here: the Upcillary™ Program training.

19Can sales incentives harm the experience and reviews?

They can, if they prioritize the volume of offers over their relevance. What bothers guests is offers that have nothing to do with them, pressure at the front desk, and unexpected charges.

When done correctly, the effect is the opposite: those who receive the perfect room for their anniversary remember it and share it. To monitor this, track mentions of the check-in in reviews along with upsell revenue. If one number increases while the other decreases, there's a problem with the methodology, not the team.

The results of this approach in a real hotel: Port Hotels Case.

Don't you see your question?

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