Room upgrade programs can increase hotel profits up to 35 percent

With travelers spending more than $278 billion on accommodations in the U.S. last year, hotel chains that explore creative new ways to engage customers have the potential to significantly increase their profits. Standby upgrade programs are an innovative way for hotels to increase annual revenue by as much as 35 percent while also filling frequently unused premium rooms, creating awareness for unique room features, and improving guest satisfaction and loyalty. However, new research in an upcoming edition of the INFORMS journal Manufacturing & Service Operations Management finds that the success of a standby upgrade program is directly tied to the type of guests who frequent the hotel, and the types and quantity of rooms available.