The rapidly developing short-term rental industry has much to learn from hotels, cruises and other established hospitality industry players. The upselling strategy is one of the topics to look at.
Hotels have been upselling experiences to guests for years, and professional vacation rentals are catching up. Successful property managers are embracing vacation rental upsells to create a unique guest experience, stay ahead of the competition and increase profits.
In this article we will review what vacation rental upsells are and share the practices that work best in 2022. We’ll also share the ways to implement the upselling processes that fit the needs of various vacation rental businesses.
What are vacation rental upsells?
Vacation rental upselling is a practice of offering guests add-on services or products at additional fee to enhance their stay. Travelers are willing to pay a premium for convenient upgrades, extensions and extras that bring value and improve their experience.
Accommodation costs usually take up to 30% of guests’ vacation budget. The rest 70% are spent on experiences. Hospitality operators can monetize these 70% with rental upsells, improving their guest experience and making more money per customer.
Types of vacation rental upsells: upselling and cross-selling
Upselling is a widely used term for persuading customers to spend more at your business, however it is more nuanced than it seems. There is a difference between upselling and cross-selling. While both techniques add up to the vacation rental bottom line, they belong to specific stages in the guest journey.
What is upselling in hospitality
Upselling is a practice of offering a better, more expensive version of a service/product the guest is considering or in the process of purchasing. For example, such upsell products can be a room upgrade or additional services or ancillaries.
The best time to offer vacation rental upsells
Common practice is to offer upsells during the booking, when the guest is in the “buying mode”. However, to dig deeper into the buying psychology, changing through the guest journey stages, this appears to not be the best time.
Hospitality professionals say that the attitude towards cost changes after booking. Committing to a particular accommodation spend, the customer is less likely to add to this amount at the payment stage. After the place is booked and the guest “forgets” the money spent, it is easier to order extras and upgrades. Especially when the excitement about the vacation is getting stronger. Offering upsells pre-arrival, a week or two before the check-in, would be the most effective way to do this.
What is cross-selling in hospitality
Cross-selling is a sales technique that targets existing customers. In hospitality it means persuading a guest to purchase a product or service related to what they have already bought. For example a wellness package, gym access, pool heating, tours and experiences, etc.
The best time for vacation rental cross-selling
You want to cross-sell to a guest at a time when they have a need for your additional service or product. This would be the time when the add-on makes sense to them, and definitely post-booking.
The best cross-selling opportunities are when guests show interest or need in a service. Knowing the guest, property managers can offer personalized solutions, even before guests reach out or go find help elsewhere. For example, if a customer travels with a pet, offering dog walking services during contactless check-in online would make sense.
You might also be interested in: The economics of vacation rental upselling [infographics]. How much you can earn.
Why upselling is important for short-term rentals: 4 benefits not to be missed
Enhance your guest experience
Guests’ expectations from hospitality operators are changing and increasing. With professionalization and maturing of the short-term rental industry, guests are looking for a hotel-like service in short-term rentals.
“Spoiled” by digital retail, guests expect personalized experience at every stage of their stay, from booking till the departure. Anticipating their actual need, using data and tools, property managers can choose upsells that deliver on that personalized experience.
In the past pools, gyms, transport and entertainment equipment, food and beverage service, were only available in hotels. Today a tech-managed short term rental can offer almost any rental amenities and services needed to provide a remarkable guest experience. Many of them are leveraging technology to provide a complete digital experience, managing the properties remotely or with a minimal staff presence on-site.
When your guests get anything they need exactly when they need it with a tap of the finger, this is what is called a five-star experience. With proper upsell strategy, smooth process and tech in place, vacation rentals can compare to the best hotels in their guest experience.
Improve your bottom line
Short-term rental businesses can use cross-selling and upselling as the easiest way to increase revenue outside of selling accommodation. It enables property managers to maximize revenue per customer, monetizing services that are rarely chosen by default.
Accommodation costs usually take up to 30% of guests’ vacation budget. The rest 70% are spent on experiences. Hospitality operators can monetize these 70% with rental upsells, providing a better guest experience and making more money per customer.
How much money can I make with upsells?
Let’s talk numbers. For a single property you have 7 bookings in a month. Of those guests, 5 decide to purchase an early check-in for $50 – generating an additional $250 for that property in a month.
Now imagine you can get those guests to purchase the top three upsells at that same price, then you are making an additional $750.
If you are renting out your property, and making roughly $4000 a month on it, you just increased your revenue for that property by 18.75%. Now imagine if you scale this with 50, or 100 properties.
The main takeaway here is if you are not doing upsells, you are leaving money on the table.
Build a brand
Your vacation rental brand goes way beyond your business name and logo. It is how people perceive you and your rental. It carries a promise, a unique identity and story that your guests will remember when they think of your business. Building a brand means to keep that promise in everything you do.
Appearing as a one-stop-shop for a perfect stay, short-term rental businesses can build a brand through guest experience. Create an image of an operator that goes out on a limb to help travelers enjoy their stays and live up to it, offering relevant upsells.
Drive repeat business
You will increase guest satisfaction by offering services that simplify the complete vacation experience and go the extra mile. Happy guests that feel looked after and pampered will leave positive reviews and spread the word within their networks. People who experienced a great service at your property once will be inclined to book their next stay with you and your brand.
Main concerns of vacation rental upsells
Despite numerous advantages of hospitality upselling and cross-selling, there is some controversy around this topic in the short-term rental community.
The research of various real-time conversations revealed three main concerns of vacation rental upsells:
No desire to “nickel and dime” guests
Some operators say that charging guests for minor services comes across as unfair, and is against the principles of hospitality. This opinion brings up the importance of how upsells are being offered and delivered.
When a guest needs to take out the wallet or gets a payment request every time they need something, it is indeed far from being a great experience.
However, the combination of the right timing, a personalized offer that brings real value and a way it’s communicated to the customer can make all the difference. The best hotels have been offering upsells to travelers that are perceived as high-end service and not “nickel and dime”.
Upselling is a step-by-step process that involves identifying the products available for upsell, knowing the guests’ needs and finding the right time to offer.
Difficulty to implement – logistics, insurance, etc.
Many short-term rental operators don’t have the capacity to deal with the logistics and the liability issues of rental amenities.
While it is understandable, knowing how busy managing short-term rentals can get, there are solutions that simplify these processes. Check out Mount, software that makes offering vacation rental amenities easy.
Need to deal with more customer issues
Another concern of busy short-term rental property managers is that offering upsells will increase the number of touch points with guests. Meaning dealing with more customer issues, when things don’t work as planned.
While this is a legitimate point for a business with limited resources, guest touch points can be turned into opportunities. With the right tech, processes and guest communication, property managers can overcome the challenges related to work overload and start earning more money with upsells.
Examples of popular vacation rental upselling and cross-selling
There are many products and services that short-term rental businesses can offer to guests to enhance their stay and increase revenue. The most popular easy upsells in vacation rentals
An early check-in offers guests the possibility to access the accommodation before the standard check-in-time. This would normally be between 3 p.m. and 4 p.m.
The service is valuable for guests arriving early in the day who want to rest, unload the bags, relax or start exploring the destination.
The best time to offer an early check-in
Early check-in can be an easy upsell, when offered to the right guests at the right time. The best time would be pre-arrival, about a week before the check-in. When travelers in the process of getting ready for the trip realize that they are going to fly-in early and need a solution.
There is no better time for an offer that will solve the early arrival problem for the guest. And if you sweeten the deal with a little discount or a freebie, this will be absolutely no brainer.
By providing guests with late check-out, you let them stay in the property after a standard checkout time. This is usually between 10am and 12PM. When people have late departures, the possibility to enjoy the property for a little longer can add-up to the vacation experience. Many guests are ready to pay a premium for convenience. A willingness to offer your guests the flexibility of a later stay can go a long way.
The best time to offer a late check-out
A reminder to your guests that their stay is about to end allows them to get organized for the departure. A late checkout offer should be a part of this message. The best timing would be a day before the actual check-out date.
Food and beverage deals
One of the reasons travelers choose vacation rentals over hotels is the home-away-from-home arrangements with a kitchen and cookware. People like to have the flexibility to have home-cooked meals, go out or order-in according to their preferences at the time.
Hence there’s much room for upsells around food and beverages in short-term rentals. For example, early check-ins can make a great bundle with breakfast for travelers coming in early. Others would appreciate a fridge fully stocked with groceries to wait for them on arrival rather than having to do shopping on the way to a cottage. There is even a great way to please alcohol lovers by offering a self-managed mini bar in your rental.
Partnering with local businesses to guide your guests through the neighborhood experiences can also be a source of additional revenue. Think about cross-promotions, discounts and other partnership programs you can implement with local restaurants, coffee places, stores, etc.
In addition to a minibar we’ve mentioned before, there are many valuable add-ons that can elevate your guests’ experience.
For example, mid-stay cleaning is one of them. A short-term rental housekeeping doesn’t include daily cleaning. Even hotels started offering on-demand housekeeping during the pandemic and some of them kept it this way.
However, travelers staying for longer periods of time, would appreciate mid-stay housekeeping service and would pay extra to pay for the cleaning team effort.
Pool and hot tub heating
Did you know that charging extra for pool and hot tub heating is a normal practice in Florida short-term rentals? Offering this upsell requires knowing your audience and the market you are in very well. If it is something that makes sense in Florida, such an offer could create some controversy in other locations or property types.
Airbnb recognized that guests wanted local, immersive experiences by launching Airbnb Experiences in 2016. This trend developed over the years and indeed today’s guests no longer just want a place to stay, they want an entire experience.
With or without Airbnb rental managers can capitalize on the fact that travelers want to explore the cities they visit through handcrafted activities led by local experts.
Connect with unique local businesses to offer one-of-a-kind activities, workshops, classes, thematic tours, etc.
People like to travel light so most travelers don’t fly with their bikes, surfboards, kayaks, ski equipment, etc. At the same time everyone likes to explore new destinations on a bike or scooter, enjoy surfing or kayaking, or even record a podcast on “workation”.
With technology and process in place, vacation rental owners and operators can offer these options to guests. See the examples of vacation rental businesses capitalizing on rentable equipment, offering guests convenience and flexibility.
Airport transfers and transportation to places of interest are very common services for international, and even internal tourists. Of course people can take a taxi or call Uber, however offering a pickup to your destination conveys a high level of service. It can also add to your bottom line.
Top 27 practical vacation rental upselling ideas
How to upsell more at your vacation rental and boutique hotel
Build deeper relationships: open communication and timing
One of the factors that can make or break your vacation rental upsell strategy is your guest communication. When and how you communicate the offer to your guests matters as much as the offer itself. Whether you are using a mobile app, email, Airbnb messaging or texting your guests, make sure you do it professionally.
It is important to create meaningful touch points with the guests to deliver real value, enhance overall experience and not come across as too salesy.
Right after booking and a week or two before check-in, are great times to get in touch with the customers to prepare them for a successful stay. Send useful reminders, details about the destination and property, arrival instructions and upsell offers to elevate the arrival experience.
Make sure to describe all amenities, both paid and free ones, in detailed digital guidebooks. Allow guests to dig into details for how the deals work and what exactly they get with your offers. Make it look appealing and convey the benefits to travelers.
Timing: when to offer upsells in short-term rentals
The best time to offer room upgrades, early check-in and extras, is pre-arrival, a week or two before the vacation begins.
For late checkout, airport transfer or merch/memorabilia sale, it makes sense to reach out to the guest a day before checkout. When vacation is coming to an end, guests want to spend the last days enjoying the destination rather than rushing home. This is why there is a late checkout.
Collect guest data and anticipate their needs: segmentation
Knowing your guest allows you to better understand their needs. Collect your guests’ data at the guest verification stage to be able to better serve them during the stay. Asking about the reason for travel, age, family status, etc. you can get an understanding of what your guests’ goals are and deliver on these.
Here are seven types of customers segmented by the reason of their travel:
Provide Amazon-like digital shopping experience
Today guests are expecting for a smooth contactless experience throughout their entire journey: from booking to checkout.
Today’s consumers are “spoiled” with quick, easy and user-friendly online sales customer experience and are expecting it in hospitality. Nothing beats a one-stop-shop portal, one-click checkout, instant replies, etc.
Short-term rental businesses need to adopt some of the pillars of Amazon-like purchasing experience, like a one-stop guest app. This will allow travelers to get anything they need or want during their stay, exactly when they need it.
Partner with local businesses for attractive experiences offers
To provide immersive local experiences and increase the guests’ share of wallet with your business, team up with local businesses. This can be in the form of co-promotion, a “Local deals” guidebook with discounts and attractive offers for your guests, partner programs, etc.
Local tour operators, coffee shops, eateries, yoga studios, craft and pet stores and spas can enrich your guests’ stay with memorable moments. Finding local businesses to create attractive offers, bringing them traffic and entertaining your guests is hard work. But if done right, it can be a great differentiator for your vacation rental and a stable source of additional income.
Psychology of upselling: best practices
Choose the right time for upselling
People react differently if they receive an offer at different stages of their guest journey. It is important to reach out when customers are in the buying state of mind or are looking for a solution to a problem.
For example, during the booking process most travelers won’t be open to increasing the amount they have already committed to. However, when the offer comes about 10-12 days before the actual trip, when the excitement is up, the appetite for buying comes back. This is when people visualize the vacation, look into travel times and logistics and are open to upgrading the experience. When an early check-in, an add-on breakfast or a better view offer comes in, it will convert better at this time. Another uptick in conversion would be around one week before the check-in. If you haven’t nailed your upsell deals in the first outreach, this is the time to reach out again.
It is also important to use the data you have about the guests to personalize offers. If the guests are traveling for business they will be more likely to upgrade Wifi, parking or other add-ons that can improve the quality of their work during the stay.
Provide context for your offers
Combine the ideal offer with a cheaper and a more expensive one, so the target offer can look most ideal by comparison.
You can go even further, using Professor Dan Arieli’s, a famous behavioral psychologist, great idea of Asymmetric Dominance or Decoy effect. This is when you offer customers three options to choose from, where the first one will be the worst and the other two will be identical with a little difference that makes the slightly better offer look like an obvious choice.
Don’t bombard the guest with too many options
If everything is special, nothing is special. Don’t overwhelm your customers with too many offers at the same time and event throughout their entire journey. This is why it is so important to know your guests and personalize offers by reason for their stay, business or leisure, time of their arrival and departure, etc.
Receiving payment for vacation rental upsells
Payment through OTAs is a pretty safe bet for guests. This is why these platforms are popular: people like the ease and safety of their money transactions.
For vacation rental operators though, it isn’t simple to collect additional payments from guests. The Airbnb host for example, needs to go in and change the listing rate and have the guest approve it. Which will increase the service fee.
Short-term rentals that have a book direct option need to take care of payment processing on their own. Venmo and PayPal can be easy options, but only if guests have accounts on these platforms.
Stripe is a solution for secure remote payments that can be integrated with your property management and guest experience software and can be used for facilitating instant direct payments
Credit card, cash or wire transfers
While paying with a credit card or cash works well in hotels, for remotely managed vacation rentals this is not a favorable method to collect payments. It is also inconvenient for guests, because it requires in-person contact, possible wait and logistics complications.
Wire transfer, while providing the convenience of remote interactions, can be expensive and time consuming.
Tech stack for generating more revenue with vacation rental upsells
Hospitality technology makes it easier for property managers and owners to manage their vacation rentals. There are many softwares providing solutions for various aspects of the short-term rental business. Not using these systems means missing out on potential revenue, saved time, improved efficiencies and of course – guest experience.
Here is the comprehensive list of tech solutions that help short-term rentals earn more money and better serve their guests with upsells:
Property management software
This is the ultimate software that helps you manage, maintain and run a vacation rental business. There are different options of high quality PMSs.
Guest experience software
From AI driven automated messaging, to smart lock enabled check in portals, custom upsells, and marketing campaigns, Enso Connect is a one-stop-shop for vacation rental guest experience. It 2-way connects to your property management software and integrates with best-in-class solutions, streamlining operations and defragmenting guest experience.
Enso Connect’s ecosystem helps professional property managers personalize and monetize interactions throughout the guest journey: from inquiry to check out and beyond.
Rental amenities provider
It is an application that allows property managers and owners to automate any upsell directly at the property. Mount handles everything from insurance to payment processing so operators get a check with extra revenue at the end of the month.
So when your guests are asking where to rent a bike, get firewood, get beach chairs, you can offer them exactly what they want without missing out on that revenue.
Shoppable spaces platforms
It is a B2B2C tech platform that converts physical hospitality venues, such as Airbnbs and hotels, into shoppable spaces. These are spaces where consumers can organically discover new products while immersed in their daily travel and leisure experiences. They are then able to shop the products directly through the SpacePlace marketplace.
Their network of 4,500 Airbnb & VRBO properties attract 90,000 unique guests per month. Through this innovative retail model, SpacePlace is able to match the marketing needs of growing consumer brands with the hospitality needs of Airbnb/VRBO hosts who are now able to shop a curated wholesale marketplace to design their properties from start to finish.
It is a retail solution that helps hosts automate and upsell services like a mid-stay clean, fresh flowers – even rentals like a margarita machine. It also allows operators to stock, sell and ship in-home products like snacks and souvenirs. Hosts are making up to $500 more per month by adding these upsells.
It is a financial infrastructure platform for businesses. Millions of companies—from the world’s largest enterprises to the most ambitious startups—use Stripe to accept payments, grow the revenue, and accelerate new business opportunities.
Other ancillaries that can be integrated into your guest journey
Guests’ luggage delivery – Alfred (Paris)
Car rentals – Turo
Implementing personalized upsells is an easy way to elevate vacation rental guest experience, while increasing revenue per guest and boosting the bottom line. To achieve these goals, short-term rental businesses need to have a proper upsell strategy and process in place. Knowing the guests, understanding buying psychology, having a professional team, backed by technology – are key components of upsell success.
Learn more about how you can automate and customize your vacation rental upselling with Enso Connect’s one-stop guest experience platform.