13 hotel incentive programs to boost your team’s motivation

Hotel incentive programs are a great alternative to the carrot-and-stick approach, especially if you want to retain and attract high-quality talent. According to the latest report from the U.S. Bureau of Labor Statistics, the annual average employee turnover in the hospitality industry reached 73.8%. What’s more, having moderately low salaries, hospitality employees also battle with burnout. This adds the challenge of finding ways to boost employee morale, build a strong team, and upskill them to achieve revenue goals.

A hotel incentive program can be a game-changer for tackling these challenges. From upselling commissions to experiential rewards and personal growth opportunities, there are several incentive ideas that hotels can explore to attract and retain talent.

What are hotel incentives?

Hotel incentives are benefits (or rewards) that hotel staff receive as a sign of appreciation and recognition of hard work. It’s a reward that is beneficial for hotels too as it can boost employee engagement and productivity, helping to reduce staff turnover.

What are the two major types of hotel staff incentives

Hotel staff incentives can be classified as monetary or non-monetary.

1. Monetary rewards are popular among hotel sales teams targeting goals and include rewards like commissions, cash bonuses or salary increases.

2. Non-monetary rewards, on the other hand, are less quantifiable. It can include an award or professional development opportunities like paid courses or tuition reimbursement. Plus, with the increased focus on mental health and workplace culture, other incentive ideas like free health and wellness programs can also be attractive employee benefits.

Why hotels need effective incentive programs

While this guide will explore different types of incentives, we believe that financial (monetary) benefits are the most effective when it comes to motivating front desk or reception employees who are often tasked with performing sales duties like upselling at the front desk. Providing commissions and bonuses on successful upsells, along with verbal recognition, can be a win-win for you and your employees, boosting your bottom line and their job satisfaction.

13 types of employee incentive programs to boost your team morale:

Monetary incentives:

1. Sales-based commission

Commissions aren’t unique to the hospitality industry and are often used to reward sales reps. With this model, a team member receives a percentage of the revenue that their sale generated.

The type of sale or upsell is typically linked to a specific percentage. For example, the commission for room upgrades should be higher as these offers are more difficult to upsell.

Other types of sales that commissions can be applied to in this industry include the cross-selling of ancillary hotel services like spa treatments, dining options, and experiences.

2. Performance bonuses

These types of monetary bonuses can be tied to individual, team, or departmental performance metrics. For example, the individual or group can receive a lump sum for:

• Monthly targets—rewards for hitting specific sales or customer satisfaction targets.

• Special events—bonuses for achieving targets during high-demand periods like holidays or peak seasons.

When going the route of offering team incentives, you can offer collective performance-based bonuses for when the team exceeds the revenue or upsell goals. For example, a front desk team achieving $10,000 in monthly upsells could receive a $500 bonus split among the individual team members.

3. Milestone bonuses

With this type of monetary incentive, you’ll reward employees for reaching significant career or performance milestones. These include:

• Tenure-based rewards—bonuses for completing one, three, or five years at the hotel)

• Achievement milestones—bonuses for consistently meeting targets for a set period such as three months).

For example, if an employee maintains a 90% upsell success rate for three consecutive months, you can award an achievement milestone and give a $200 bonus.

4. Profit-sharing programs

Using this model, you’ll share a percentage of the hotel's profits, either quarterly or annually, with its employees based on the establishment’s performance. It works because employees feel directly tied to the hotel’s success, giving them a sense of ownership. In return, they’re motivated to improve their own performance and continue to contribute to the hotel’s overall success.

5. Targeted bonuses (tactical incentives)

This ties in with sales-based incentives. As mentioned earlier, some services are harder to sell and with this strategy, you’ll provide higher bonuses for promoting these specific services, packages, or room categories.

Here are examples of what it can look like in practice:

• Setting a higher commission of 15% for upselling challenging room categories like luxury suites or premium rooms

• Giving a bonus for seasonal promotions such as selling a special event or holiday package

• Offering an incentive for selling slow-moving items or underperforming services like late-night room service or a low-demand spa treatment.

6. Overachievement incentives

If you’re blessed, you’ll have employees who significantly outperform targets. Providing additional bonuses to these high achievers motivates them to continue pushing their limits and can also encourage other team members to follow suit.

For example, employees who exceed their monthly upsell target by 20% will receive a 20% increase in their standard commission rate for that month.

​​7. Champion bonuses

While sales is a good metric to use, it’s not the only indication of success. Plus, some hotel managers won’t directly engage in sales and their effort could go unnoticed with the other hotel incentive types discussed so far.

Enter champion bonuses. These bonuses are often 0.5%–1% of the total sales generated by their team and can reward front office managers for their team’s performance. For example, a manager overseeing $20,000 in upsell revenue could earn $200 as a champion bonus.

Non-monetary incentives:

If your hotel has limited funds for monetary incentives (due to factors such as high taxes) or if your team prefers alternative forms of motivation, consider implementing non-monetary incentives.

A combined approach that incorporates various incentives can address different aspects of employee satisfaction. For instance, if your team is feeling overworked, additional time off might be more valuable to them than extra monetary compensation.

1. Recognition programs

Private or public recognition of employee achievements can be a powerful motivator. It works because not only does it show appreciation but also creates a sense of pride and belonging.

An informal shout-out during a team meeting or on an internal communication platform like your Slack channel is a good starting point. However, more formal employee recognition programs like an Employee of the Month/Quarter Award that highlights exceptional performance with certificates or plaques create a positive work environment where employees know that hard work will get seen.

Once again, this isn’t limited to individual performance. You can use these programs to celebrate team milestones, such as meeting sales goals or achieving excellent customer satisfaction scores by featuring a specific department in company newsletters.

2. Career development opportunities

Investing in employees' professional growth demonstrates long-term commitment. Here are some ways that you can improve retention rates and reward employees at the same time:

• Offer workshops and training programs on upselling and other high-demand skills such as customer service, sales, or management

• Fund relevant certifications to the hotel industry like a course on hospitality management or language

• Encourage cross-training that allows employees to learn new roles and improve their career progression prospects

• Invest in leadership development to create pathways for employees so that they can advance into supervisory or management positions

• Prioritize internal candidates for open positions or promotions

• Allow international transfers that offer opportunities to work at other locations within the hotel chain.

For example, receptionists might be trained in spa reservations, increasing their skill set and potential future roles.

3. Extra time off

Time is a precious commodity, especially in the service industry where flexible hours aren’t the norm. As part of your employee wellness initiatives, reward high-performing employees with additional unpaid or paid time off. You can, for example, introduce:

• Flexible scheduling that allows top performers to choose their shifts or work hours.

• Birthday leave that gives all the employees a day off on their birthdays.

• Compensatory time that offers time off in exchange for working during peak seasons or holidays.

Extra time off helps employees recharge and promotes work-life balance. In an industry where employee retention is one of the biggest challenges, it’s an incentive that all hotels should seriously consider adding to their hotel staff incentive programs.

4. Wellness and health benefits

Some of the other employee incentives discussed earlier will also have an impact on your employees’ wellness. However, it’s worth considering creating an incentive plan that targets their mental health specifically, considering that nearly half (47%) of hospitality front-line managers admitted that they experienced burnout.

To support employees' physical and mental well-being, you can:

• Create a wellness program that offers access to fitness classes, yoga sessions, or meditation programs (e.g., offer employees free use of the hotel’s gym facilities or spa amenities during off-hours to reduce costs)

• Include health benefits such as discounts on health insurance or health services like dental checkups or gym memberships

• Partner with counselors who can offer mental health support

• Organize free therapy sessions or on-site health screenings.

If you sense that employees are neglecting their well-being even though you’re offering relevant incentives, you can, for instance, run wellness challenges.

5. Personal growth opportunities

Personal growth is as important as career development. If you help employees achieve personal goals outside of work, you might find that their job performance in other areas will improve too. Who knows if you offer to support a personal hobby like photography, music, or art, your front desk staff might bring more creative upselling ideas to the table?

Offering more formal education assistance (in the form of scholarships, free or subsidized lessons or financial aid) can also benefit your hotel in the long run.

For example, paying for an employee to attend culinary school, a photography workshop, or a language course, means that you’re investing in other skills that other departments might need. In addition to the newly acquired skills, your employees will also grow more loyal to your hotel.

6. Personalized rewards

Similarly to how you’re personalizing your guest experience, you should also tailor rewards to individual preferences.

For example, some employees might value flexible schedules, while others prefer experiences or recognition. Combining these types of customer perks with surprise gifts like a book, movie tickets, or gift cards for their favorite store recognizes employees as hard-working individuals who they are.

How to design an effective hotel incentive program

1. Set fair and motivating incentive rates

Deciding on your incentive rates is similar to setting goals. They should be realistic.

For example, a lower incentive rate (e.g., 5%) is appropriate for upselling ancillary services like breakfast, dinner, spa treatments, or retail products due to the higher cost of goods sold. On the other hand, upgrades, like room upsells, often represent high profit margins meaning that hotels can afford to increase the incentive rate to 10%. For example, if an upsell increases the room rate from $100 to $150, the employee earns $5, while the hotel retains the bulk of the profit.

2. Incorporate tactical incentives

What makes tactical incentives a key element of effective employee incentive programs is that they address specific goals, such as driving sales of certain room categories or reaching monthly revenue targets. You can, for example, offer extra incentives (e.g., 12%–15%) for challenging room categories like suites or premium packages or set a team target (e.g., $10,000 in upsell revenue per month) to reward the entire team with higher commission rates for exceeding this total.

3. Champion incentives for managers

In larger hotels, front desk managers often spend little or no time directly interacting with guests, making it hard for them to earn direct sales incentives. To keep them motivated, introduce champion incentives.

These are typically around 1% of total team sales, but adjust this percentage based on the hotel’s size and revenue. For example, in a high-revenue property where monthly upsell revenue might exceed $100,000, a 0.5% champion incentive could be more appropriate.

4. Communicate the value of incentives

A well-structured incentive program should allow employees to increase their income by at least 10%. For example:

• A receptionist earning $1,300 monthly could generate an additional $130 in incentives by consistently meeting sales targets. Effectively, this creates the potential of earning an extra month’s salary over the course of a year!

• In exceptional cases, top performers could increase their earnings by 20%–25% to impact their financial well-being significantly.

5. Focus on retention through incentives

Competitive salaries are a key factor in retaining talent, especially in a highly competitive hospitality labor market. Offering employees the ability to earn significantly more through incentives can be a game-changer. For young professionals with little loyalty to brands, the opportunity to increase their salary by 20% or more can drive both performance and loyalty.

The psychology behind incentive programs

Incentive programs are more than just financial tools. They’re about making an effort to understand what motivates your employees and aligning your offering accordingly.

Employees feel appreciated and valued when they see that their efforts are directly rewarded. In return, you can expect a more productive workforce as they’re (re)invested in your success.

Without proper incentives, there’s a high risk that employees will lose interest. If they’re passionate about the hotel industry, they won’t want a career change but rather just a new employer.

A robust incentive program is more than paying your employees for hard work. You’re also empowering them to take control of their earnings and build a sense of ownership in their roles.

How to put the hotel staff incentive program into practice

Once you’ve established your incentive program’s structure, goals, and KPIs, the next step is execution. However, many hoteliers struggle with implementation due to common challenges such as:

• No system to track employee performance

• Limited visibility into upsold services or rooms

• Front desk teams unaware of potential rewards

• Difficulty in tracking distributed incentives, leading to fairness concerns.

Many hoteliers also rely on spreadsheets to manage their programs. However, as the initiative scales, this manual approach becomes inefficient and difficult to maintain. Without automation, front desk managers may find it challenging to fairly track performance and distribute rewards.

To streamline the process, many hotels adopt automated upselling solutions, such as Oaky’s Front Desk Upsell module which allows you to automate an upselling process at the front desk while also ensuring accurate tracking of your team’s performance:

• Equip front desk agents with real-time, smart upsell prompts

• Monitor employee performance effortlessly

• Manage commissions and reward distribution seamlessly

• Provide agents with instant insights into their potential earnings.

By automating these tasks, upselling becomes more efficient, teams stay motivated, and managing the incentive program becomes significantly easier.

Our customers have seen real success with this approach. Linus Svedberg, Front Office Manager at Quality Hotel Globe, shared how Oaky helped implement a fair and effective incentive program—proving that the right tools make all the difference.

“With the incentive program, we’ve been able to ignite interest and motivation across the entire team. Now, it’s not just one or two people who are actively upselling and passionate about it—the whole team is.”

Final thoughts

Employee incentive programs work because they encourage employees to continuously improve in their roles without leaving them feeling like their extra effort goes unnoticed. By offering meaningful financial and other tangible rewards, you create an environment where employees feel valued, motivated, and loyal. It can transform your front desk team from task-oriented workers into motivated sales professionals.

When front desk staff members see a direct connection between their performance and their earnings, they’ll not only stay with your hotel longer but also contribute more to its financial success. It isn’t just a perk—it’s a strategic investment in your team and hotel’s bottom line.