The Knowledge Stage at Scale Show Barcelona 2024 was a groundbreaking platform curated and hosted by Rental Scale-Up (RSU), exclusively featuring property managers as speakers. This innovative approach of “Sharing Real-World Tactics for Property Managers, by Property Managers” marked an industry first. One of the most highly attended and well-received sessions was “Guest Experience and Revenue: Connecting The Dots Through Guest Engagement and Upselling,” presented by François Gouelo, Co-Founder & CEO of Enso Connect, and William Parry, General Manager UK & Ireland at Joivy.

The session delved into the transformative power of upselling—how it can exponentially enhance both revenue and guest experience when executed effectively. François illustrated this with UberEats’ exemplary upselling strategies, demonstrating how entities outside the short-term rental industry are excelling in this area. Meanwhile, Will provided insights through Joivy’s impressive success story in Europe, showcasing practical applications within the property management sector.

Why Property Managers Need to Embrace Upselling

In the highly competitive property management market, companies struggle to scale due to the high costs of acquiring new listings and intense competition that suppresses margins. With the limited potential to increase occupancy rates and fixed profit margins per listing, property managers must explore new revenue streams or enhance upselling strategies to grow their gross margins.

The necessity for upselling in the short-term rental market stems from the economic pressures that property managers face. Adding new listings is a costly and time-consuming endeavor, often with diminishing returns due to the saturated market. Instead, focusing on maximizing the revenue from existing listings through upselling and guest engagement offers a more efficient and profitable path.

Upselling presents a compelling avenue for property managers to grow their business without the heavy burden of acquiring new listings. The benefits extend beyond immediate financial gains. Enhanced guest engagement and personalized experiences translate to higher guest satisfaction and loyalty. Satisfied guests are more likely to leave positive reviews and make repeat bookings, which in turn boosts the property’s ranking on OTAs (Online Travel Agencies) and search engines, leading to higher occupancy rates and the ability to command premium rates.

Don’t believe in the power of upsells?

Consider this: In 2023, the average guest travel budget in Spain allocated only 21.2% to accommodation, while a substantial 78.8% went towards other travel expenses. This disparity highlights a significant opportunity for property managers to tap into the larger portion of their guests’ travel budgets through effective upselling and cross-selling.

The size of the opportunity: Upselling & cross-selling

Compared to booking revenue, where 79% is typically paid to OTAs or property owners, upsell revenue remains entirely within the property manager’s control. Current analysis shows that vacation rental managers are capturing less than 5% of their guests’ total budget as gross margins. For instance, on a 2000€ reservation, if a property manager successfully captures an additional 200€ through upselling, this can significantly boost gross margins.

Effective upselling not only boosts revenue but also enhances the guest experience. By offering additional services or upgrades that align with guests’ preferences, property managers can create a more personalized and satisfying stay. This approach not only increases immediate revenue but also fosters guest loyalty, leading to repeat bookings and positive reviews that drive future business.

Schedule, Medium, and Touchpoints: A Parallel with Other Industries

In the competitive world of short-term rentals, understanding and leveraging upselling strategies is crucial. One effective method to grasp these concepts is by examining how other industries wield upsells to their advantage.

Every industry is unique, but the underlying principles of successful upselling remain consistent. It all starts with the “why” – why should a person engage with you? Let’s explore how different sectors achieve this:

UberEats

A food delivery platform that simplifies getting great food from your favorite local restaurants, UberEats uses data-driven decisions to create a seamless user journey. They leverage digitization, data collection, and personalization at scale, employing a savvy mix of scheduling and the right mediums to deliver an optimal experience.

• Special Promotion: Users receive notifications about limited-time offers or discounts on their favorite dishes.
• New Restaurant: Alerts about new dining options in their area pique curiosity and prompt orders.
• Usual Ordering Pattern: Personalized suggestions based on past behavior, such as “It’s Taco Tuesday! Order from your favorite taco place.”

Netflix

Netflix excels in using personalized recommendations to keep users engaged. Their upselling strategies are seamlessly integrated into the user experience:

• New Movie Launch: Notifications about new releases tailored to individual preferences.
• Friday Night Suggestions: Recommendations for weekend viewing based on past watching habits.
• Travel Mode: Prompts to download movies for offline viewing when users are detected at airports or travel hubs.

Airbnb

Airbnb’s upselling tactics revolve around enhancing the travel planning experience:

• Unbooked Trips: Reminders for trips that have been planned but not yet booked, nudging users towards completion.
• Special Promotions: Offers properties similar to previous searches or bookings, enticing users with relevant deals.
• Personalized Suggestions: Recommendations based on user preferences, such as pet-friendly homes or properties with specific amenities.

The common thread across these examples is the blend of convenience and personalization. By aligning upsell strategies with user needs and behaviors, these companies successfully foster engagement and drive incremental revenue.

The UberEats Example

UberEats stands out for its strategic use of data-driven decisions to enhance the user journey:

1. Data Collection: UberEats collects extensive data on user preferences, order history, and behavior patterns. This data is used to tailor promotions and recommendations.
   
2. Scheduling: UberEats employs a carefully planned schedule for its promotions, as illustrated in the accompanying graphic. For instance, on Mondays, users might receive a message about a special St. Patrick’s Day promotion. 

By Tuesday, the promotion could be a $10 perk just for them, while Wednesday’s message might focus on a new offer available. This consistent and strategic communication ensures that users are continuously engaged without feeling overwhelmed.

3. Mediums: The choice of medium is crucial. UberEats utilizes push notifications to directly reach users on their smartphones, ensuring high visibility and engagement. These notifications are not random but are meticulously scheduled to align with user behavior patterns. For example, a notification might be sent during lunch hours, when users are more likely to place an order.

By integrating data-driven decisions with a strategic schedule and the right medium, UberEats creates a highly personalized and engaging user experience. This approach not only boosts order frequency but also increases the likelihood of users trying new restaurants or taking advantage of promotions, thereby driving higher revenue through upselling.

Lessons for Property Managers

The principles used by UberEats can be effectively applied to the short-term rental industry. By understanding the “why” behind guest engagement, property managers can:

• Personalized Communication: Tailor messages based on guest preferences and behavior.
• Strategically Schedule Promotions: Align promotional messages with key touchpoints in the guest journey, such as pre-arrival, during stay, and post-stay.
• Choose the Right Medium: Utilize channels like email, SMS, or app notifications to ensure high visibility and engagement.

Building a Digital and Personalized Guest Journey at Scale: The Joivy Example

In the short-term rental industry, upselling is not just about increasing revenue; it’s about building a digital and personalized guest journey that enhances the overall experience. By drawing from successful strategies in other industries and applying them to property management, short-term rental managers can create memorable stays that drive satisfaction and loyalty. 

European Property Management leader Joivy exemplifies how these concepts can be seamlessly integrated into the sector.

What Impacts Guest Experience?

According to Deloitte, personalization is a cornerstone of guest experience. Tailoring services to individual preferences and creating unique, memorable stays are crucial for driving satisfaction and loyalty. Here are some key factors that impact guest experience:

• Personalization: Tailored services based on individual preferences significantly enhance guest satisfaction.
• Excellent Service: Courteous and attentive staff who anticipate guest needs and resolve complaints promptly.
• Comfortable Accommodations: Clean, well-maintained rooms with essential amenities.
• Efficient Processes: Streamlined check-in/out processes that save time and reduce hassles.
• Local Recommendations: Providing local insights adds value to the guest’s stay.
• Pre-Arrival Engagement: Initiating contact before arrival to create a positive first impression.
• Real-Time Availability: Being accessible through guests’ preferred communication channels for prompt responses.
• Feedback Collection: Gathering feedback at key touchpoints to understand performance and identify improvement areas.

The Schedule and Touchpoints in Short-Term Rentals

Joivy’s approach to managing the guest experience is built on a well-structured schedule that enhances engagement and upselling opportunities at each stage of the guest journey:

1. Inquiry: Guest service teams manage inquiries and convert them into bookings, scheduling automated follow-ups to improve conversion rates.
2. Booking Confirmation: Guests receive automated booking confirmations and the “medium” for the rest of their experience.
3. Guest Verification: Reminders for guests to complete verification, followed by access instructions for contactless check-in.
4. During Stay: Access to relevant information and service upgrades through a guest app, with automated and ad hoc messages from Joivy.
5. Check-Out: Instructions are provided through the app, with guest satisfaction monitored via AI analysis of communication.
6. Post-Stay: Data collected throughout the touchpoints is used to tailor future communication and retargeting strategies.

The Medium

Joivy’s evolution in managing guest experience highlights the importance of choosing the right medium and touchpoints:

• From Messages Only: Initial stages of guest engagement.
• To Digital Guides: Enhanced information access.
• To All-in-One Guest Experience Platform: Comprehensive management of the entire guest journey.

By focusing on the schedule, frequency, and medium, Joivy has significantly increased guest engagement. This mirrors the strategy of apps like Uber, where user engagement directly correlates to revenue. For vacation rental managers, consolidating the guest journey within a unique medium and adhering to a well-designed schedule ensures:

• Guests interact with the content provided.
• Higher likelihood of purchasing add-ons or upgrades.
• Fewer questions, freeing up time for the team.
• Scalable platforms with reduced customer support needs.

As engagement increases, the experience shifts from being just another Airbnb stay to a distinctive “Joivy experience.”

The Joivy Way: Upsells & Guest Engagement at Scale

Joivy’s brand strategy focuses on developing a direct booking channel to increase opportunities for repeat bookings and upsell guests on ancillary services. This includes an upcoming loyalty program designed to further encourage guest engagement and retention.

More engagement means happy guests. Happy guests mean more money:

• Repeat Bookings: Lower customer acquisition costs and no middleman fees.
• Better Reviews: Higher rankings on OTAs and search engines, leading to higher occupancy.
• Stronger Brand: Better differentiation, competitive edge, and the ability to command higher rates.
• More Upsells: Increased revenue from additional services.

Ultimately, a well-executed upselling strategy leads to more engaged guests and greater profitability for property managers. Joivy’s approach serves as a blueprint for leveraging technology, data, and personalization to drive sustainable growth in the property management industry.