How hostels are a good example of cross-selling in the hotel industry

Cross-selling in the hotel industry is an important element, while it helps in building a long-term relationship with the guest. Due to the fact that there is a large difference between hotel brands and types of hotels, there is a large difference in cross selling.

Cross selling is the sale of products to customers who already purchasing one or more products from the supplying company. In the case of hotels the product is the booked hotel room and cross selling can defined as adding services or facilities to the room or experience of the guests. (Peelen, 2013)

There are different possibilities for cross selling. Cross selling over time is if a customer is buying more than one of the same product during a contact or at a later time. Furthermore cross-selling can be done within the product range if a customer buys another product in the same product category. In the case of the hotel industry, this is noticed in the loyalty of guests who book more often at the same hotel brand in a period of time. (Peelen, 2013)

It is important to indicate the probability of the customer with a certain product history and certain profile possess the product. This can be done by compiling a list of the people to be approached for the cross-sell of another product category. (Peelen, 2013) Before this list can be compiled it is important to have the necessary data of the customer. ‘The deeper the understanding we have about our customers and our products, the better we can connect with them.” (S. Direction, 2012). Moreover the right data can help knowing what the customer want to buy before they know it their selves. (Raconteur, 2016). Due to the fact that hotels often have good insight in the data of loyal customers, the probability of customers can be measured well.

There are two different approaches in which cross selling activities can take place. The first approach is drawing customers ‘attention to another product from the range during customer contact. This can be done if the ‘probability’ exceeds a minimum level to determined later. Besides the minimum level, the context and content of the conversation is important.  The second cross selling activity is approaching existing customers with other products from the range. (Peelen, 2013) For the hotel industry the first approach is most useful, due to the fact that the hotel industry is offering besides the product of ‘a room’ intangible products as well.

It seems that if hotels have loyal customers it is easy to cross sell their products.  Loyal guests are more willing to try different products or book for instance a more luxurious room for special occasions. But what about hostels? For these types of hotels it is maybe even easier to cross sell their products. Hostels have the advantage that the image is more ‘basic’ and therefore customers have lower expectations. Due to offering a basic room, it is easy to cross sell other products. For instance a private bathroom or instead of a dorm room a private room. Customers are probably more willing to spend a little more for these types of products compared to cross selling an entire luxury room or an expensive spa treatment. Furthermore in general hostels have a good way of marketing and cross selling method due to offering this during the process of booking. For instance on website options are offered to add ‘products’ such as the private bathroom. Another example of a hotel brand who is cross selling in a good way is Ibis. The concept of Ibis is actually cross selling. At Ibis hotel it is possible to add facilities for more comfort. For instance a larger bed, a balcony and air-conditioning. (Ibis, 2016)

Due to the importance of cross selling in order to build a long term relation with the guest, it is important for hotels to have a good cross selling method. Hostels have a different cross selling method due to not having the ‘all in one’ facilities of the product. While they offer this products separately to the customer, customers will be more aware of the products the hotels offer, which is important for engaging the customer.

 

Sources:

Direction, S. (2102). Big data needn’t be a big headache. How to tackle mind-blowing amounts of information, Vol. 28 Iss: 8, 22 – 24

IBIS. (2016).  Retrieved from : http://www.ibis.com/nl/hotel-1153-ibis-den-haag-scheveningen/index.shtml

Matthews, D.(2016). How connected data is targeting consumers. Raconteur

Peelen, E., & Beltman, R. (2013). Customer relationship management. Pearson Education Limited.

 

 

 

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