Hotels are losing revenue — not because of competition, but because they don’t know their guests
Hotels are investing more than ever in loyalty programs, direct booking incentives, and revenue management tools. They’re working hard to compete, adapting to new guest expectations, and embracing technology to drive revenue. But despite all this effort, they’re still losing money — not to competitors, but to gaps in their own systems. The reality is that most hotels still struggle to answer the simplest question: who is my guest?
A repeat visitor books the same hotel twice yet gets treated like a first-time guest. A loyalty member misses out on an upgrade because their preferences live in one system while their booking sits in another. A guest who would have happily paid for a room upgrade is never offered one at the right moment. These aren’t just service gaps — they’re missed revenue opportunities. And as SHR’s latest white paper explores, the root cause isn’t a lack of demand. It’s a lack of connected data.
Hotels know upselling is a major revenue driver. But too often, it happens at the wrong time or in the wrong way — either too late, when the guest has already made up their mind, or too generically, without considering what that specific guest actually values. A guest books their stay, but the hotel doesn’t offer an upgrade until check-in — when they’ve already planned their experience. A loyalty member who would gladly pay for early check-in isn’t presented with the option until they arrive at the front desk — when it feels like an afterthought rather than a benefit. A business traveler with a history of spa bookings gets a discount email days after they check out — when the opportunity is already lost.
This isn’t about pricing strategy or demand. Guests will pay for upgrades, add-ons, and personalized experiences — if they’re offered at the right moment. But hotels leave money on the table because their systems don’t recognize when a guest is most likely to buy. The challenge isn’t a lack of data — hotels have more guest data than ever. The problem is that it’s scattered across disconnected systems. The CRS holds booking details. The CRM contains guest history, preferences, and loyalty status. The PMS runs daily operations. When these platforms don’t communicate in real time, hotels lose the ability to act on valuable guest insights.
And the cost of inaction is significant. According to h2c, 34% of hotel CRM systems remain poorly integrated, limiting the ability to execute personalized marketing and operational strategies. This lack of real-time connection means hotels aren’t just missing out on incremental revenue from upsells and upgrades — they’re losing repeat business and loyalty-driven bookings. Personalization isn’t just a guest experience perk; it’s a profitability driver.
That’s why a guest who has booked a suite three times before doesn’t get an automated upgrade offer during booking. That’s why a loyalty member’s profile isn’t surfaced when they check in. That’s why a guest with late flights isn’t proactively offered a late checkout before they even think to ask. Hotels are reacting instead of anticipating, and being on the backfoot is costing them.
The perfect moment to upsell isn’t at check-in — it’s during booking, when the guest is still making decisions. It is also in the booking journey, with customized and personalized offers specific to the member. The time to push an in-stay upsell isn’t after they’ve settled into their room — it’s before they arrive when they’re still planning their trip. The opportunity to reinforce loyalty isn’t in a post-stay survey — it’s in the moment a guest reaches a new tier, when recognition feels instant and valuable.
Other industries have mastered this. Airlines offer seat upgrades during booking, not at the gate. E-commerce platforms push relevant product recommendations before checkout, not after. Subscription services surface loyalty perks before a customer considers canceling. These industries don’t just personalize — they get the timing right. Meanwhile, many hotels still rely on batch data updates, manual workarounds, and disjointed systems that don’t sync fast enough to drive real-time decision-making. The result? The right offer reaches the wrong guest or the right guest at the wrong time.
The solution isn’t collecting more data — it’s acting on data in real time. Deep, native integration between CRS, CRM, and PMS allows hotels to surface personalized offers at the moment they’re most likely to convert. A guest booking a stay should immediately see upgrade options relevant to their past behavior — not receive a generic “Would you like a suite?” prompt at check-in. A frequent spa-goer should be offered a package before arrival — not receive a follow-up email after they’ve checked out. A loyalty member’s tier benefits should be automatically applied to their booking — not manually adjusted at the front desk.
This isn’t just about convenience. It’s about revenue. Guests spend more when offers feel relevant and well-timed. They engage with loyalty programs when benefits feel seamless rather than forced. They return to hotels that recognize them without effort, rather than those that make them start from scratch every time they book.
Hotels are already investing in upselling technology, guest recognition tools, and revenue optimization strategies. But, without seamless connectivity between systems, even the best strategies fall short. Fixing this isn’t about layering on more tech — it’s about removing the barriers between systems, so that guest insights flow effortlessly, fueling revenue opportunities at every stage of the guest journey.
Right now, hotels are spending millions to attract new guests while missing opportunities with the ones they already have. Fixing this isn’t just a technology upgrade — it’s a shift in thinking. The future of hotel revenue won’t be won by those who simply collect more guest data. It will be won by those who act on it at the exact moment it matters.
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