Paul James, global brand leader at St. Regis Hotels and Resorts, estimates that he spends no less than 150 nights a year in hotel rooms. His experience goes well beyond his own company's brand; he often checks out the competition by staying at other hotels.
Over time, Mr. James has developed a number of tricks to make sure his hotel stays are comfortable. For instance, after booking a room online, he immediately follows up with a phone call to the hotel's concierge. His aim: to request a room that will suit him.
"Unless you're at an airport hotel, you'll find that there are a vast number of shapes and designs of rooms within the raft of standard or deluxe rooms," he says. Sometimes he wants to ensure there's a large work table; occasionally, he wants extra room with a crib for his son. And because he's over six feet tall, he always makes sure to ask for a king-sized bed.
."It never hurts to ask" if you have a special need in mind while checking in, whether it's a specific view, a larger sofa, a mini refrigerator (not all hotels provide them), or a room on the executive floor—"even if it's just a bowl of fruit," Mr. James says. "It's surprising how much a hotel generally can do and can provide for you once you get there," he says.
One key to getting what you want is making a convincing argument for it. "It's those people who tend to have a good reason who get what they want—whether it's getting a larger room because you're going to be meeting some people in your room or you're celebrating a birthday or an anniversary," he says.
When Mr. James is checking into a hotel, he always makes sure he's nicely dressed. Typically he'll show up in a suit or slacks and a jacket. "If you look the part, you'll tend to get looked after a little bit better," he says. But he notes that some guests can look like they "just walked off the tennis court" and still get five-star treatment if they "talk and communicate" well. It helps if a guest "engages with the person that they're talking to as a human being, being pleasant and engaging and not overly demanding or difficult or obtuse or overly distracted," he explains.
He doesn't usually request an upgrade unless something is very wrong with the room, noting that members of good loyalty programs can get regular upgrades without having to ask.
Throughout his stay, Mr. James goes out of his way to be nice to the concierge. "That's rule No. 1," he says, noting that he'll often stop at the concierge desk to thank the staff after a recommendation has paid off.
Such positive reinforcement typically results in the concierge staff offering better service and sightseeing advice over the course of a trip, he says. "If you reward them with a, 'That was great—more like that, please,' it could help open up a whole raft of new access points to the city," he says. Your feedback will also give them more clues to what you're looking for.
If the concierge has performed a significant task for you, it's nice to tip him or her that day, he says, but tipping at the end of the stay is perfectly acceptable, too.
When Mr. James is staying in a U.S. hotel, he generally tips the concierge $10 to $20 a day, depending on how much he has used the service. Bellhops who carry his luggage get $2 to $5, and he always leaves $2 to $4 a day in an envelope for housekeeping.
Mr. James leaves the total tip for housekeeping in the room just before he checks out, rather than leaving it out as a daily amount. At the end, he says, "you just have a better idea of how you've been looked after."
Thursday, July 29, 2010
Keys to Success Hospitality Tip: Focus on engaging the “high-touch” side of our business by instilling passion in our people #1
(I studied under John at MSU. He was a great instructor.
How often have we heard the expression that “Life is a journey.”?
Global authors and writers have noted that that travel is one of humankind’s most enduring symbols of freedom and ability to enjoy life. The concept of travel is inbred into the human experience, and we as hoteliers need to be proactive in how we deliver that experience to each one of our guests.
In these times of continuing uncertainty in the cycles of the slow rebuilding of global economies, oil spills, seemingly illogical stock market responses to speculative stories and more, we as hoteliers and the travel industry need to maintain the uniqueness of our services, regardless of our style or location of hotel.
Travel and tourism is the number one industry of many countries of the world and considered the largest service sector export for the United States. It is one of the largest employers, developing workers at all levels and areas of expertise. We have all heard the statistics on the millions of jobs, the billions in payroll income and the substantial contributions to governments everywhere as communities of all sizes benefit as well with significant tax revenues for federal, state, and local governments. Today’s every day reality is one that interacts with so many people, always seemingly in a hurry to get somewhere else. Time becomes even more precious, yet we run the risk of becoming a commodity or every day common product if care is not exercised.
I became fascinated with the hospitality industry at the age of 15 at what was then a tired Vermont resort, but the appeal of the industry was magnetic because of the very special personal interaction between guest and host (innkeeper, general manager, owner or whatever the title). Even though the hotel was “a bit worn” and travel trends were changing, there remained an excitement about actually providing a unique experience.
This is the initial article in a series that will focus in short segments about how to deliver that experience today, whether you are an independent hotel or brand affiliated. One of the clients I served was interested in this topic and for those programs I reached out for some additional insight to someone I knew from the 17 years I proudly spent as a Tennessee hotelier. Johnny Walker of Nashville has been involved in the hospitality industry his entire career. Johnny Walker Tours is probably Nashville's most experienced tour operator, dealing with various riverboat and music festival packages, guide services, reunions, group business and much more. He also has a number of hotels and brands and served at one time as the CHOICE Hotel Owners Council President. Johnny and I are long time associates in the years we overlapped, as we served together on a number of industry councils, commissions and hotel association boards. When asked, Johnny shared three goals with me that he felt were important for the program I was preparing:
1.the message that “every room rental/stay must be viewed as an experience”
2.to explore practical ways to motivate the staff that delivers hotel services
3.we must all recognize that while we are in an electronic age at the ownership and management level, the front line staff delivering the services may not be or the guests may prefer the personal touch
The program content evolved into four objectives:
1.To understand and define the Experience Economy
2.To encourage hotel general managers and their staffs to think about the “guest experience" and how it needs to be built into the mindset of every hotel associate for every guest.
3.To recognize the danger of becoming a “Commodity”, and ways to avoid becoming ordinary
4.To provide attendees with the opportunity to interact with each other on ways to immediately address challenges at their hotels.
The program featured attendees sharing specific examples of products that are commonplace today that avoided becoming commodities and contrasting them with others that have fallen into disfavor because of a lack of delivery of quality experience.
These attendee-inspired sessions moved quickly into the hospitality/lodging world and identified the “guest experience” of today’s guest in three areas:
1.breakfast
2.sleeping and
3.staff responsiveness
Discussion on clear differences between products and services were held and recognition of what we are really trying to do was the outcome. In the next blog, I will share specific examples and insights on how we might engage our associates on the “high touch “ side of hospitality.
Blog of Dr. John Hogan CHE CHA MHS 7.29.10 www.HospitalityEducators.com, www.HoganHospitality.com
How often have we heard the expression that “Life is a journey.”?
Global authors and writers have noted that that travel is one of humankind’s most enduring symbols of freedom and ability to enjoy life. The concept of travel is inbred into the human experience, and we as hoteliers need to be proactive in how we deliver that experience to each one of our guests.
In these times of continuing uncertainty in the cycles of the slow rebuilding of global economies, oil spills, seemingly illogical stock market responses to speculative stories and more, we as hoteliers and the travel industry need to maintain the uniqueness of our services, regardless of our style or location of hotel.
Travel and tourism is the number one industry of many countries of the world and considered the largest service sector export for the United States. It is one of the largest employers, developing workers at all levels and areas of expertise. We have all heard the statistics on the millions of jobs, the billions in payroll income and the substantial contributions to governments everywhere as communities of all sizes benefit as well with significant tax revenues for federal, state, and local governments. Today’s every day reality is one that interacts with so many people, always seemingly in a hurry to get somewhere else. Time becomes even more precious, yet we run the risk of becoming a commodity or every day common product if care is not exercised.
I became fascinated with the hospitality industry at the age of 15 at what was then a tired Vermont resort, but the appeal of the industry was magnetic because of the very special personal interaction between guest and host (innkeeper, general manager, owner or whatever the title). Even though the hotel was “a bit worn” and travel trends were changing, there remained an excitement about actually providing a unique experience.
This is the initial article in a series that will focus in short segments about how to deliver that experience today, whether you are an independent hotel or brand affiliated. One of the clients I served was interested in this topic and for those programs I reached out for some additional insight to someone I knew from the 17 years I proudly spent as a Tennessee hotelier. Johnny Walker of Nashville has been involved in the hospitality industry his entire career. Johnny Walker Tours is probably Nashville's most experienced tour operator, dealing with various riverboat and music festival packages, guide services, reunions, group business and much more. He also has a number of hotels and brands and served at one time as the CHOICE Hotel Owners Council President. Johnny and I are long time associates in the years we overlapped, as we served together on a number of industry councils, commissions and hotel association boards. When asked, Johnny shared three goals with me that he felt were important for the program I was preparing:
1.the message that “every room rental/stay must be viewed as an experience”
2.to explore practical ways to motivate the staff that delivers hotel services
3.we must all recognize that while we are in an electronic age at the ownership and management level, the front line staff delivering the services may not be or the guests may prefer the personal touch
The program content evolved into four objectives:
1.To understand and define the Experience Economy
2.To encourage hotel general managers and their staffs to think about the “guest experience" and how it needs to be built into the mindset of every hotel associate for every guest.
3.To recognize the danger of becoming a “Commodity”, and ways to avoid becoming ordinary
4.To provide attendees with the opportunity to interact with each other on ways to immediately address challenges at their hotels.
The program featured attendees sharing specific examples of products that are commonplace today that avoided becoming commodities and contrasting them with others that have fallen into disfavor because of a lack of delivery of quality experience.
These attendee-inspired sessions moved quickly into the hospitality/lodging world and identified the “guest experience” of today’s guest in three areas:
1.breakfast
2.sleeping and
3.staff responsiveness
Discussion on clear differences between products and services were held and recognition of what we are really trying to do was the outcome. In the next blog, I will share specific examples and insights on how we might engage our associates on the “high touch “ side of hospitality.
Blog of Dr. John Hogan CHE CHA MHS 7.29.10 www.HospitalityEducators.com, www.HoganHospitality.com
Tuesday, July 27, 2010
AH&LA Lodging Industry Profile Charts Hotel Profits, Sales, International Arrivals
Industry’s Six-Year Profitability Streak Comes to an End
For 2009, the U.S. lodging industry posted pre-tax profits of $16 billion – down from $25.8 billion in 2008 – and $127.2 billion in sales – down from $140.6 billion in 2008, according to the American Hotel & Lodging Association (AH&LA) Lodging Industry Profile (LIP), an annual statistical analysis of the industry. This $127.2 billion contributed to an overall $704 billion in tourism sales*, with resident and international travelers’ expenditures in the U.S. estimated at $1.9 billion/day; $80 million/hour; $1.3 million/minute; and $22,300/second.
The percentage of international travelers to the U.S. decreased from a record 58 million in 2008, to 54.9 in 2009; arrivals from overseas travelers declined 6 percent to total 23.8 million. The top 10 countries in terms of U.S. arrivals for 2009 were Canada (18 million), Mexico (13.2 million) the United Kingdom (3.9 million), Japan (2.9 million), Germany (1.7 million), France (1.2 million), Brazil (893,000), Italy (753,000) South Korea (744,000), and Australia (724,000). These 10 countries accounted for 80 percent of U.S. international visitors.
“With the softening of the economy in Q4 of 2008 and into 2009, our industry saw an end to our six-year streak of increased profitability,” said AH&LA President/CEO Joe McInerney. “The industry suffered a one-two punch between the fallout from the 2007credit crisis and the Lehman Bros collapse in September 2008, with financing for hotel construction and renovation going by the wayside. After two years of streamlining budgets, cutting staffs, and revising service protocols, the industry is lean and ready for recovery and 2010 is being billed a transition year.”
Other facts found in the LIP:
•A detailed breakdown of the 50,800 U.S. hotels by room number, size, location, and nightly rate;
•The travel and tourism industry pays $186 billion in travel-related wages and salaries and employs 1.7 million hotel property workers;
•Profiles of the typical lodging consumer’s leisure stay (60 percent of all travelers’ stays; categorized by two adults ages 35-54, who spend an average of one night paying a rate of $105) vs. a typical business travelers stay (40 percent of all travelers’ stays; most likely to be spent by a sole male age 35-54, for three or more nights at a rate of $123).
AH&LA’s LIP provides a comprehensive, easy-to-read list of these and other significant facts about the lodging, travel, and tourism industries, including employment impact; international travel statistics; and property and room breakdowns by location, rate, and size. The complete 2010 AH&LA Lodging Industry Profile is available on AH&LA’s Information Center Webpage.
Information contained in the LIP is based on 2009 data provided by D.K. Shifflet & Associates, Ltd.; STR; U.S. Travel Association; U.S. Department of Commerce, International Trade Administration, Office of Travel and Tourism Industries, Bureau of Economic Analysis; and Statistics Canada. Figures for year-end 2010 will be available in fall 2011.
For 2009, the U.S. lodging industry posted pre-tax profits of $16 billion – down from $25.8 billion in 2008 – and $127.2 billion in sales – down from $140.6 billion in 2008, according to the American Hotel & Lodging Association (AH&LA) Lodging Industry Profile (LIP), an annual statistical analysis of the industry. This $127.2 billion contributed to an overall $704 billion in tourism sales*, with resident and international travelers’ expenditures in the U.S. estimated at $1.9 billion/day; $80 million/hour; $1.3 million/minute; and $22,300/second.
The percentage of international travelers to the U.S. decreased from a record 58 million in 2008, to 54.9 in 2009; arrivals from overseas travelers declined 6 percent to total 23.8 million. The top 10 countries in terms of U.S. arrivals for 2009 were Canada (18 million), Mexico (13.2 million) the United Kingdom (3.9 million), Japan (2.9 million), Germany (1.7 million), France (1.2 million), Brazil (893,000), Italy (753,000) South Korea (744,000), and Australia (724,000). These 10 countries accounted for 80 percent of U.S. international visitors.
“With the softening of the economy in Q4 of 2008 and into 2009, our industry saw an end to our six-year streak of increased profitability,” said AH&LA President/CEO Joe McInerney. “The industry suffered a one-two punch between the fallout from the 2007credit crisis and the Lehman Bros collapse in September 2008, with financing for hotel construction and renovation going by the wayside. After two years of streamlining budgets, cutting staffs, and revising service protocols, the industry is lean and ready for recovery and 2010 is being billed a transition year.”
Other facts found in the LIP:
•A detailed breakdown of the 50,800 U.S. hotels by room number, size, location, and nightly rate;
•The travel and tourism industry pays $186 billion in travel-related wages and salaries and employs 1.7 million hotel property workers;
•Profiles of the typical lodging consumer’s leisure stay (60 percent of all travelers’ stays; categorized by two adults ages 35-54, who spend an average of one night paying a rate of $105) vs. a typical business travelers stay (40 percent of all travelers’ stays; most likely to be spent by a sole male age 35-54, for three or more nights at a rate of $123).
AH&LA’s LIP provides a comprehensive, easy-to-read list of these and other significant facts about the lodging, travel, and tourism industries, including employment impact; international travel statistics; and property and room breakdowns by location, rate, and size. The complete 2010 AH&LA Lodging Industry Profile is available on AH&LA’s Information Center Webpage.
Information contained in the LIP is based on 2009 data provided by D.K. Shifflet & Associates, Ltd.; STR; U.S. Travel Association; U.S. Department of Commerce, International Trade Administration, Office of Travel and Tourism Industries, Bureau of Economic Analysis; and Statistics Canada. Figures for year-end 2010 will be available in fall 2011.
Monday, July 26, 2010
In Search of Service - The Rule of 10 & 5
People are always trying to overcomplicate service, and the end result is often that staff are so confused about the 10 or more “minimum standards” that they are supposed to be using at every guest interaction that their service seems rehearsed.
For example, I used to love it when an employee responded to a guest inquiry with an “it’s my pleasure.” And I could be wrong, but I believe that Ritz Carlton were the first to use it as a standard response for their team members.
Now, everyone is saying it, at most every Hotel company, so you have to ask yourself, is it really their pleasure? Of course not, and as a result of its over-use, it no longer has much of an impact on me at all, except when I can tell it is voiced by someone who truly embodies the service culture that we all strive to create.
I would like to see more companies focus on the basics, first, and do them well, CONSISTENTLY.
Take the 10 and 5 rule, remember that one?
When a guest comes within ten feet (10) of a team member(s), the team member(s) should cease their conversation to acknowledge the approaching guest by making eye contact. At approximately five (5) feet team members should acknowledge the guest(s) with a warm greeting, whenever appropriate.
When is the last time a Hotel company spent any time on this during their new team members’ orientation?
I don’t know about you, but at the end of the day, I still want to feel welcome when I stay at a Hotel, and valued as a customer, not looked down upon by staff members who appear disgruntled by the fact that you have interrupted their discussion of what they did on their days off, to ask for their assistance or directions.
A Hotel is supposed to be a home away from home, an oasis, in the middle of the concrete jungle.
In my home, I make people feel welcome, I acknowledge them when they enter a room, I approach them, rather than waiting to be approached, I use their name, and I let them know that I appreciate them coming to visit.
Isn’t that what it’s all about?
Isn’t that what makes people want to come back, again and again?
Nobody sits around their dining room table talking about how much they want to go back and visit their surly Uncle Frank.
It’s all about the basics, do those well, and then you can dazzle me with all of your other special attributes designed to make me want to stay at your Hotel, but if I don’t feel welcome, I won’t be back.
For example, I used to love it when an employee responded to a guest inquiry with an “it’s my pleasure.” And I could be wrong, but I believe that Ritz Carlton were the first to use it as a standard response for their team members.
Now, everyone is saying it, at most every Hotel company, so you have to ask yourself, is it really their pleasure? Of course not, and as a result of its over-use, it no longer has much of an impact on me at all, except when I can tell it is voiced by someone who truly embodies the service culture that we all strive to create.
I would like to see more companies focus on the basics, first, and do them well, CONSISTENTLY.
Take the 10 and 5 rule, remember that one?
When a guest comes within ten feet (10) of a team member(s), the team member(s) should cease their conversation to acknowledge the approaching guest by making eye contact. At approximately five (5) feet team members should acknowledge the guest(s) with a warm greeting, whenever appropriate.
When is the last time a Hotel company spent any time on this during their new team members’ orientation?
I don’t know about you, but at the end of the day, I still want to feel welcome when I stay at a Hotel, and valued as a customer, not looked down upon by staff members who appear disgruntled by the fact that you have interrupted their discussion of what they did on their days off, to ask for their assistance or directions.
A Hotel is supposed to be a home away from home, an oasis, in the middle of the concrete jungle.
In my home, I make people feel welcome, I acknowledge them when they enter a room, I approach them, rather than waiting to be approached, I use their name, and I let them know that I appreciate them coming to visit.
Isn’t that what it’s all about?
Isn’t that what makes people want to come back, again and again?
Nobody sits around their dining room table talking about how much they want to go back and visit their surly Uncle Frank.
It’s all about the basics, do those well, and then you can dazzle me with all of your other special attributes designed to make me want to stay at your Hotel, but if I don’t feel welcome, I won’t be back.
Up-selling at the Front Desk
Since we upsell in Restaurants and have our staff implement it, , Why not our Front Desk Staff..
With the increasingly dominant role of technology, methods for making travel plans have changed dramatically over the past decade.
(with contributions from Eydie Shapiro and Barbara Fischhof)
With the increasingly dominant role of technology, methods for making travel plans have changed dramatically over the past decade. It is now possible to book a flight, rent a car and reserve a hotel room -- all while sitting in a movie theater or even in a car wash. This means that the first person-to-person interaction guests may experience with a hotel, is probably with the front desk agent. While it is common practice for hotels to sell and oversell the Best Available Rate (BAR) online to book more reservations, up-selling is more likely in the hands of the front desk agent today, rather than the reservations agent as in years gone by.
Now, with the front desk positioned to assist in creating more revenue, the following are suggestions on how to motivate your staff to up-sell:
•Create opportunities for the front desk to sell upgrades. This can create more revenue for the property and more avenues for guest satisfaction. Upgrades include rooms with views, different bed types, square footage, added meeting space, and access to VIP Lounge areas.
•Achieve higher ADR. A property can potentially profit more from a lower occupancy with a higher Average Daily Rate (ADR) because of the reduced amount in labor and hotel resources used. For example, if a property has an occupancy of 85%, only 85% of the rooms have to be cleaned, only 85% will use electricity and water, and only 85% will need assistance from front of the house. If a large amount of upgrades were sold to that 85%, it could potentially generate the equivalent rooms revenue as a sold-out property at BAR.
•Consider a commission program for front desk staff. The front desk staff can have a major impact on the revenue that a property generates so it is important to motivate them to work toward raising the ADR. It is not uncommon for a front desk agent to think “Sure, I’m making money for the hotel, but what’s in it for me?” A commission program is becoming more common practice among hotels to create incentive for the front desk. For example, a 5% commission paid to the desk agent for every upgrade sold can give the front desk something to show for their hard work and motivate them to upsell. A 5% commission would be equivalent to $1 for every $20 upgrade sold. This will give agents a bonus without putting a large dent in your upgrade revenue.
•Train front desk staff to negotiate. Giving desk agents the freedom to negotiate, within reason of course, could be the difference in selling the upgrade or not. It may be necessary to look at availability and hold a short daily meeting with agents to provide guidelines, but maintain flexibility for agents to negotiate upon arrival.
Train your front desk staff to:
•Know the property
•Know the selling points and highlights of each room type and what type of travel/number of travelers the room type is best suited for. For example, if a family of four comes to the front desk and they have booked a room with one king bed and pull-out couch, that would be the time to suggest they upgrade to a room with two queen beds and pull-out couch for an additional $30 per night because they would be more comfortable.
•Know availability. Before each shift, check availability and see if there are any room types that are oversold and would be given complimentary upgrades in order to balance room inventory. Also, check to see if some of the more exclusive room types are sold out as to not oversell a room type that cannot be fixed. Make sure that if a guest wants to upgrade for their entire stay, that the room type is available before upgrading them.
•Ask every arrival. View every arrival as an opportunity to create more revenue for the hotel and for yourself. Some guests may not understand all of the room types so it is beneficial to inform them of the different options. For example, if a guest arrives and they are not booked in an ocean view room but you do have one available, you could inform them that you have rooms with preferred views available.
•Negotiate, don’t haggle or annoy. If a guest does not wish to purchase an upgrade, do not push the issue. Remember, guest satisfaction comes first. If a guest does consider an upgrade, remain professional during negotiations.
The basics of up-selling have not changed. What has changed is the increased opportunity for front desk personnel to affect your bottom line through greater understanding of your room inventory, motivation and the use of more sophisticated property management systems. Up-selling has the potential to generate more revenue with each reservation, and surely deserves attention by management and frontline staff.
With the increasingly dominant role of technology, methods for making travel plans have changed dramatically over the past decade.
(with contributions from Eydie Shapiro and Barbara Fischhof)
With the increasingly dominant role of technology, methods for making travel plans have changed dramatically over the past decade. It is now possible to book a flight, rent a car and reserve a hotel room -- all while sitting in a movie theater or even in a car wash. This means that the first person-to-person interaction guests may experience with a hotel, is probably with the front desk agent. While it is common practice for hotels to sell and oversell the Best Available Rate (BAR) online to book more reservations, up-selling is more likely in the hands of the front desk agent today, rather than the reservations agent as in years gone by.
Now, with the front desk positioned to assist in creating more revenue, the following are suggestions on how to motivate your staff to up-sell:
•Create opportunities for the front desk to sell upgrades. This can create more revenue for the property and more avenues for guest satisfaction. Upgrades include rooms with views, different bed types, square footage, added meeting space, and access to VIP Lounge areas.
•Achieve higher ADR. A property can potentially profit more from a lower occupancy with a higher Average Daily Rate (ADR) because of the reduced amount in labor and hotel resources used. For example, if a property has an occupancy of 85%, only 85% of the rooms have to be cleaned, only 85% will use electricity and water, and only 85% will need assistance from front of the house. If a large amount of upgrades were sold to that 85%, it could potentially generate the equivalent rooms revenue as a sold-out property at BAR.
•Consider a commission program for front desk staff. The front desk staff can have a major impact on the revenue that a property generates so it is important to motivate them to work toward raising the ADR. It is not uncommon for a front desk agent to think “Sure, I’m making money for the hotel, but what’s in it for me?” A commission program is becoming more common practice among hotels to create incentive for the front desk. For example, a 5% commission paid to the desk agent for every upgrade sold can give the front desk something to show for their hard work and motivate them to upsell. A 5% commission would be equivalent to $1 for every $20 upgrade sold. This will give agents a bonus without putting a large dent in your upgrade revenue.
•Train front desk staff to negotiate. Giving desk agents the freedom to negotiate, within reason of course, could be the difference in selling the upgrade or not. It may be necessary to look at availability and hold a short daily meeting with agents to provide guidelines, but maintain flexibility for agents to negotiate upon arrival.
Train your front desk staff to:
•Know the property
•Know the selling points and highlights of each room type and what type of travel/number of travelers the room type is best suited for. For example, if a family of four comes to the front desk and they have booked a room with one king bed and pull-out couch, that would be the time to suggest they upgrade to a room with two queen beds and pull-out couch for an additional $30 per night because they would be more comfortable.
•Know availability. Before each shift, check availability and see if there are any room types that are oversold and would be given complimentary upgrades in order to balance room inventory. Also, check to see if some of the more exclusive room types are sold out as to not oversell a room type that cannot be fixed. Make sure that if a guest wants to upgrade for their entire stay, that the room type is available before upgrading them.
•Ask every arrival. View every arrival as an opportunity to create more revenue for the hotel and for yourself. Some guests may not understand all of the room types so it is beneficial to inform them of the different options. For example, if a guest arrives and they are not booked in an ocean view room but you do have one available, you could inform them that you have rooms with preferred views available.
•Negotiate, don’t haggle or annoy. If a guest does not wish to purchase an upgrade, do not push the issue. Remember, guest satisfaction comes first. If a guest does consider an upgrade, remain professional during negotiations.
The basics of up-selling have not changed. What has changed is the increased opportunity for front desk personnel to affect your bottom line through greater understanding of your room inventory, motivation and the use of more sophisticated property management systems. Up-selling has the potential to generate more revenue with each reservation, and surely deserves attention by management and frontline staff.
Friday, July 23, 2010
The Worker or The Tools..
(Caroline Cooper writes some good articles and has great insight.)
The saying goes "a bad workman always blames his tools". But is it always the workmen that are at fault?
Today I had a delivery, and the poor driver was getting extremely frustrated with his hand held scanner. He had to reset it twice before it showed the delivery for me to sign. Now how much of this was down to operator error I can't say, but one thing was for sure, he was not happy about it. Neither was I for that matter as I was left standing on the doorstep for 10 minutes while this was going on, when frankly I had better things to do!
But it made me reflect on how well we provide the right resources and tools for our staff to do their jobs, and then give them the necessary training to utilise them to the full. Failure to do so is frustrating for the employee, and inevitably has a knock on effect on the customer experience, as was evident today.
Equipment
The most obvious is the provision of the right equipment. This might be as simple as the right accessories for your vacuum cleaners, right the way through to your heavy kitchen or laundry equipment. Equipment that is unreliable or fails to do the job for which it was designed can be a huge source of frustration for staff.
Consult with those who will using the equipment before making investments. Skimping on inferior quality equipment might help the initial cash flow, but in the end seldom pays off. However ask whether or not you need the all singing all dancing model, or just the basic. Why pay for extra features if they are seldom, if ever, needed?
Have a system in place for maintenance, whether this is done in house or with a contractor. And have a reporting process if there are problems; maybe when the equipment doesn't appear to be functioning on all four cylinders, or gets damaged. Failure to report and deal with problems promptly not only leads to staff frustrations, and later accusations of who's fault it is, but could cost you dearly in the long run if it causes long-term damage.
Then ensure your team get the full training they need to get best use out of the equipment. Talk to your suppliers to support with this training. And ensure they understand the maintenance required and can spot quickly when there are faults that need reporting. Remember too the equipment that your customers will be using - irons in rooms, LCD projectors in meeting rooms, gym equipment. It's easy for these to get overlooked.
Products and consumables
In the kitchen is obvious to have the right products, as the end result is so evident if the correct ingredients have not been sourced. But this extends to all areas of the hotel - the appropriate cleaning products for the job, the correct grade of printer ink and paper, the quality of toiletries- each will have an impact on the finished result and how easy they are to use or work with, and whether they deliver what is required to the right standard. Simple little things can have a huge impact on the amount of effort needed from your team and on the quality of the end result.
Time
Not having enough time to do the job to standard can be very sole destroying for people, particularly when they want to do a good job, but they just don’t have the time to do that effectively. Spend time with your staff to assess how long a task should take. And if it is taking longer than it should, assess what is causing the extra time. It may be down to the equipment, products or systems causing a bottleneck, or again it may be down to lack of training on the best approach to complete the task.
If you give a member of staff additional responsibilities or duties, be realistic; unless you are increasing their hours something else will need to give to make way for this. Spend some time now identifying how that time can be made up. If you're not careful they could end up cutting corners on the most critical tasks rather than cutting out low priority ones.
People
What happens when a member of staff leaves, or goes on holiday? What impact does that have on the rest of the team? The effects may be felt in other departments too, if they are dependant on this person for information or ordering, for example.
Are there skills shortages in certain areas, which only affect you once in a while (e.g. certain types of events, or when people are on holiday) but when they do, they put pressure on the whole team?
The more flexibility you have in your team the better. This does not mean you make everyone a jack of all trades, but ensure there is always more than just one person who is able to perform each task, so there is an element of cover, and the whole place does not fall apart, just because one person is off sick.
Systems
Having systems and procedures is usually a good thing. Having systems in place for when things go wrong is key if staff are to take responsibility for putting things right without having to come running to you all the time e.g. dealing with customer complaints, wrong deliveries, faulty equipment.
Give people training in the systems. If they don’t know what the system is, or, just as importantly understand why you have it, they wont follow it. And I include in here IT systems. How often have you seen someone doing something longhand because they don’t know how to do it on a computer system in which you've invested £'000s?
Ensure that everyone works by the same set of 'rules' or systems; there is nothing more frustrating than seeing someone else do something that you are 'not allowed to do'. But, don’t be so bound by red tape that people can't use their initiative and take control of situations when needed.
It's important to review your systems from time to time. Are they achieving what they set out to do, or are they leading to frustration and bottlenecks? Talk to the people who actually use the systems to check this, as often you may not be aware of any issues. Staff will normally come up with the best way to resolve it, if you allow them.
So next time we feel like blaming the workman, just reflect for a moment. - Is it the workman that's at fault, or is it down to a lack of the right resources - equipment, products, time, people or systems. Or do you have the right resources and the right people, but failed to provide the right training to get the best from each other?
The saying goes "a bad workman always blames his tools". But is it always the workmen that are at fault?
Today I had a delivery, and the poor driver was getting extremely frustrated with his hand held scanner. He had to reset it twice before it showed the delivery for me to sign. Now how much of this was down to operator error I can't say, but one thing was for sure, he was not happy about it. Neither was I for that matter as I was left standing on the doorstep for 10 minutes while this was going on, when frankly I had better things to do!
But it made me reflect on how well we provide the right resources and tools for our staff to do their jobs, and then give them the necessary training to utilise them to the full. Failure to do so is frustrating for the employee, and inevitably has a knock on effect on the customer experience, as was evident today.
Equipment
The most obvious is the provision of the right equipment. This might be as simple as the right accessories for your vacuum cleaners, right the way through to your heavy kitchen or laundry equipment. Equipment that is unreliable or fails to do the job for which it was designed can be a huge source of frustration for staff.
Consult with those who will using the equipment before making investments. Skimping on inferior quality equipment might help the initial cash flow, but in the end seldom pays off. However ask whether or not you need the all singing all dancing model, or just the basic. Why pay for extra features if they are seldom, if ever, needed?
Have a system in place for maintenance, whether this is done in house or with a contractor. And have a reporting process if there are problems; maybe when the equipment doesn't appear to be functioning on all four cylinders, or gets damaged. Failure to report and deal with problems promptly not only leads to staff frustrations, and later accusations of who's fault it is, but could cost you dearly in the long run if it causes long-term damage.
Then ensure your team get the full training they need to get best use out of the equipment. Talk to your suppliers to support with this training. And ensure they understand the maintenance required and can spot quickly when there are faults that need reporting. Remember too the equipment that your customers will be using - irons in rooms, LCD projectors in meeting rooms, gym equipment. It's easy for these to get overlooked.
Products and consumables
In the kitchen is obvious to have the right products, as the end result is so evident if the correct ingredients have not been sourced. But this extends to all areas of the hotel - the appropriate cleaning products for the job, the correct grade of printer ink and paper, the quality of toiletries- each will have an impact on the finished result and how easy they are to use or work with, and whether they deliver what is required to the right standard. Simple little things can have a huge impact on the amount of effort needed from your team and on the quality of the end result.
Time
Not having enough time to do the job to standard can be very sole destroying for people, particularly when they want to do a good job, but they just don’t have the time to do that effectively. Spend time with your staff to assess how long a task should take. And if it is taking longer than it should, assess what is causing the extra time. It may be down to the equipment, products or systems causing a bottleneck, or again it may be down to lack of training on the best approach to complete the task.
If you give a member of staff additional responsibilities or duties, be realistic; unless you are increasing their hours something else will need to give to make way for this. Spend some time now identifying how that time can be made up. If you're not careful they could end up cutting corners on the most critical tasks rather than cutting out low priority ones.
People
What happens when a member of staff leaves, or goes on holiday? What impact does that have on the rest of the team? The effects may be felt in other departments too, if they are dependant on this person for information or ordering, for example.
Are there skills shortages in certain areas, which only affect you once in a while (e.g. certain types of events, or when people are on holiday) but when they do, they put pressure on the whole team?
The more flexibility you have in your team the better. This does not mean you make everyone a jack of all trades, but ensure there is always more than just one person who is able to perform each task, so there is an element of cover, and the whole place does not fall apart, just because one person is off sick.
Systems
Having systems and procedures is usually a good thing. Having systems in place for when things go wrong is key if staff are to take responsibility for putting things right without having to come running to you all the time e.g. dealing with customer complaints, wrong deliveries, faulty equipment.
Give people training in the systems. If they don’t know what the system is, or, just as importantly understand why you have it, they wont follow it. And I include in here IT systems. How often have you seen someone doing something longhand because they don’t know how to do it on a computer system in which you've invested £'000s?
Ensure that everyone works by the same set of 'rules' or systems; there is nothing more frustrating than seeing someone else do something that you are 'not allowed to do'. But, don’t be so bound by red tape that people can't use their initiative and take control of situations when needed.
It's important to review your systems from time to time. Are they achieving what they set out to do, or are they leading to frustration and bottlenecks? Talk to the people who actually use the systems to check this, as often you may not be aware of any issues. Staff will normally come up with the best way to resolve it, if you allow them.
So next time we feel like blaming the workman, just reflect for a moment. - Is it the workman that's at fault, or is it down to a lack of the right resources - equipment, products, time, people or systems. Or do you have the right resources and the right people, but failed to provide the right training to get the best from each other?
Thursday, July 22, 2010
Train The Trainer: Effectively Reaching Today’s Adult Learners
While the US unemployment rate dipped to 9.5 percent in June 2010 (the lowest level since July 2009 compared to 9.7 percent in May 2010), the report showed 125,000 jobs were lost during the month, driven by the end of temporary census positions. The June figures estimated private sector job creation was 83,000 , marking the sixth-straight month of job growth among private firms, but government and financial market expectations.
In the United Kingdom, Canada and Australia, job numbers began to rebound in the spring, but have since flattened. Financial markets around the world continue to jitter over concerns that the recession may return and only get worse. The oil leaks in the Gulf of Mexico and China are prompting major stock market fluctuations. Analysts are not consistent in their projections and many still say it could be late 2010 or early 2011 before businesses will once again be adding 200,000 jobs in a month in the US, a figure that is considered a positive growth.
A upbeat sign that our hospitality industry does appear to be rebounding was the posting of 20+ senior training positions I noted on one of the industry leading employment sites on July 16. With listings globally in hospitality businesses of varying sizes, the emergence of recovery levels of business means that hotels and hospitality businesses must re-hire the training positions they either eliminated or left vacant, Organizational Development and Associate Training are increasingly complex areas in the global hospitality field, and this is becoming more dramatic with four generations now working together. Many industries in developed countries have permanently shut down job categories and will not likely replace them, which means additional people of all ages will be entering our industry for the first time.
This article addresses the professionals who will be influencing those people entering our job markets and it offers some of what I call “hotel common sense” in effectively reaching the adult learners of today.
When we were in school, from elementary to university levels, many of us tended to have similar characteristics with most of our classmates. We were likely to be comparable in age, socio-economic background, physical characteristics and other similarities that might have included religion, political persuasion and many attitudes and life experiences.
We have learned in the past twenty years of the needs for continuous education. Today, “relearning” skills and developing new competencies regardless of age or past successes has become the norm and is expected. The “adult” student of 2011 can range dramatically in many of these former shared attributes. As an employer, manager or trainer, we need to stop and recognize the differences of today’s “student” attending a public workshop or a company sponsored training seminar.
As someone who has conducted an estimated 3,200 classes and/or workshops in my career to date, I am offering some characteristics that I have found in many of the programs I have facilitated. Understanding the “adult” learner’s perspective in recent years means using caution, as today’s diverse work force is not the same as it was less than a generation ago.
In the United Kingdom, Canada and Australia, job numbers began to rebound in the spring, but have since flattened. Financial markets around the world continue to jitter over concerns that the recession may return and only get worse. The oil leaks in the Gulf of Mexico and China are prompting major stock market fluctuations. Analysts are not consistent in their projections and many still say it could be late 2010 or early 2011 before businesses will once again be adding 200,000 jobs in a month in the US, a figure that is considered a positive growth.
A upbeat sign that our hospitality industry does appear to be rebounding was the posting of 20+ senior training positions I noted on one of the industry leading employment sites on July 16. With listings globally in hospitality businesses of varying sizes, the emergence of recovery levels of business means that hotels and hospitality businesses must re-hire the training positions they either eliminated or left vacant, Organizational Development and Associate Training are increasingly complex areas in the global hospitality field, and this is becoming more dramatic with four generations now working together. Many industries in developed countries have permanently shut down job categories and will not likely replace them, which means additional people of all ages will be entering our industry for the first time.
This article addresses the professionals who will be influencing those people entering our job markets and it offers some of what I call “hotel common sense” in effectively reaching the adult learners of today.
When we were in school, from elementary to university levels, many of us tended to have similar characteristics with most of our classmates. We were likely to be comparable in age, socio-economic background, physical characteristics and other similarities that might have included religion, political persuasion and many attitudes and life experiences.
We have learned in the past twenty years of the needs for continuous education. Today, “relearning” skills and developing new competencies regardless of age or past successes has become the norm and is expected. The “adult” student of 2011 can range dramatically in many of these former shared attributes. As an employer, manager or trainer, we need to stop and recognize the differences of today’s “student” attending a public workshop or a company sponsored training seminar.
As someone who has conducted an estimated 3,200 classes and/or workshops in my career to date, I am offering some characteristics that I have found in many of the programs I have facilitated. Understanding the “adult” learner’s perspective in recent years means using caution, as today’s diverse work force is not the same as it was less than a generation ago.
Tuesday, July 20, 2010
Boost Your Group Sales with Professional Business Development
In recent years a downturn in group sales has been the cause of our industry’s greatest pain. Massive numbers of meeting rooms, crucial to generating room nights in some of the largest and most marquee properties in our industry, sit empty. Waves of layoffs and hiring freezes have washed over hotels all across North America and beyond. Previously profitable hotels fall into receivership every day. Organizations of all types have been canceling group events at an astounding rate.
According to a study conducted by Smith Travel Research, group occupancy performance dropped more than 18 percent in 2009, with between 5 and 7 million fewer rooms sold during every month. Let me repeat that, five to seven million fewer rooms per month! Call it the AIG affect. Call it a consequence of our times. But the real fact of the matter is a downturn in group sales is the cause of our industry’s greatest pain.
It can also be the answer. Hotel sales teams are hurting for new business. They are desperate to stop the drop in revenue and increase future bookings. Yet often the focus is put almost entirely on re-booking old business. Proactive sales activities becomes an ongoing chore of responding to low probability leads that are mass distributed to dozens of hotels from traditional lead sources or trolling meetings management tools to re-call old clients. What they should be doing is finding new business. Contacting high probability sales leads with a methodical and repeatable process. Hotel sales teams need to embrace proactive sales activities and create a culture of professional business development.
Business Development Defined. In this five-part series, I’ll be discussing the Knowland four-step process for cultivating professional business development in the hospitality industry. What do I mean by a culture of professional business development? A systematic, measurable, and repeatable process to generate group bookings for any hotel or conference center. Business development doesn’t mean waiting for the phone to ring. It means picking up the phone and calling the right meeting planner with the correct sales pitch. It doesn’t mean counting on past bookings to fill your hotel and generate your revPAR. It means creating processes that can be counted on to drive group room nights, even in a weak or recovering economy.
Professional business development occurs every day across dozens of industries; it should be adopted for hotel group sales! With true, professional B-to-B (business-to-business) business development, sales managers are required to actively schedule and contact prospects. They are given high probability sales leads based on past purchasing activity and empowered with competitive value propositions and great sales training. Their activity is tracked in customer relationship management (CRM) or sales force automation (SFA) tools so managers can quickly spot problems and tweak productivity. This allows for the generation of a reliable, measurable and repeatable sales funnel.
True professional business development can be broken down into four simple steps. Within these steps a universe of strategies and plans can be developed for each unique hotel and property. Obviously the strategies for a 1,500-room resort hotel are going to be vastly different than for a limited service airport property. But they all require the same basic methodology and tools. When repeated over time, this four-step process can dramatically increase group sales for any hotel or conference center.
Look for the next in this five-part series on business development, “Step One: Determine your universe of potential business.” In the meantime, learn more by contacting the Knowland Group at 410.860.2270, online at www.KnowlandGroup.com, or on Twitter @KnowlandGroup.
About The Knowland Group
The Knowland Group is a proven innovator, developing intuitive marketing products and services that streamline and support event and group sales in the hospitality industry. The company, headquartered in McLean, VA serves over 2,000 hotel clients and 17,000 users globally. Recently featured on the Inc. Fast 500 List, The Knowland Group is the second fastest growing company in the travel industry. For more information, visit www.KnowlandGroup.com, call 410-860-2270 or follow us on Twitter @knowlandgroup.
Michael K. McKean is the CEO and Director of New Product Development for The Knowland Group. He is a hotel business development and group sales expert and regular columnist for Hotel Business Review and Hotel News Now. Contact him at mmckean@knowlandgroup.com or on Twitter @MikeAtKnowland.
According to a study conducted by Smith Travel Research, group occupancy performance dropped more than 18 percent in 2009, with between 5 and 7 million fewer rooms sold during every month. Let me repeat that, five to seven million fewer rooms per month! Call it the AIG affect. Call it a consequence of our times. But the real fact of the matter is a downturn in group sales is the cause of our industry’s greatest pain.
It can also be the answer. Hotel sales teams are hurting for new business. They are desperate to stop the drop in revenue and increase future bookings. Yet often the focus is put almost entirely on re-booking old business. Proactive sales activities becomes an ongoing chore of responding to low probability leads that are mass distributed to dozens of hotels from traditional lead sources or trolling meetings management tools to re-call old clients. What they should be doing is finding new business. Contacting high probability sales leads with a methodical and repeatable process. Hotel sales teams need to embrace proactive sales activities and create a culture of professional business development.
Business Development Defined. In this five-part series, I’ll be discussing the Knowland four-step process for cultivating professional business development in the hospitality industry. What do I mean by a culture of professional business development? A systematic, measurable, and repeatable process to generate group bookings for any hotel or conference center. Business development doesn’t mean waiting for the phone to ring. It means picking up the phone and calling the right meeting planner with the correct sales pitch. It doesn’t mean counting on past bookings to fill your hotel and generate your revPAR. It means creating processes that can be counted on to drive group room nights, even in a weak or recovering economy.
Professional business development occurs every day across dozens of industries; it should be adopted for hotel group sales! With true, professional B-to-B (business-to-business) business development, sales managers are required to actively schedule and contact prospects. They are given high probability sales leads based on past purchasing activity and empowered with competitive value propositions and great sales training. Their activity is tracked in customer relationship management (CRM) or sales force automation (SFA) tools so managers can quickly spot problems and tweak productivity. This allows for the generation of a reliable, measurable and repeatable sales funnel.
True professional business development can be broken down into four simple steps. Within these steps a universe of strategies and plans can be developed for each unique hotel and property. Obviously the strategies for a 1,500-room resort hotel are going to be vastly different than for a limited service airport property. But they all require the same basic methodology and tools. When repeated over time, this four-step process can dramatically increase group sales for any hotel or conference center.
Look for the next in this five-part series on business development, “Step One: Determine your universe of potential business.” In the meantime, learn more by contacting the Knowland Group at 410.860.2270, online at www.KnowlandGroup.com, or on Twitter @KnowlandGroup.
About The Knowland Group
The Knowland Group is a proven innovator, developing intuitive marketing products and services that streamline and support event and group sales in the hospitality industry. The company, headquartered in McLean, VA serves over 2,000 hotel clients and 17,000 users globally. Recently featured on the Inc. Fast 500 List, The Knowland Group is the second fastest growing company in the travel industry. For more information, visit www.KnowlandGroup.com, call 410-860-2270 or follow us on Twitter @knowlandgroup.
Michael K. McKean is the CEO and Director of New Product Development for The Knowland Group. He is a hotel business development and group sales expert and regular columnist for Hotel Business Review and Hotel News Now. Contact him at mmckean@knowlandgroup.com or on Twitter @MikeAtKnowland.
Mastering Your Telephone Sales Mystery Shopping Program
With most hotels and call centers seeing an increase in inquiry calls as demand rebounds in markets, it is more important than ever for your frontline sales representatives to maximize their call conversions and total revenue sold vs. goal. Depending on the type of lodging operation or call center, and of course your targeted market segments, this might include group sales managers, reservations agents, or even front desk staff.
One great tool for maximizing your team’s overall sales effectiveness is to implement an ongoing mystery shopping assessment and coaching program. When properly organized and implemented, mystery shopping reports can help all telephone sales agents provide a less transactional, more conversational, caller-focused sales experience.
Unfortunately too many mystery shopping programs fall short of actualizing their potential as an assessment and coaching tool and instead actually reinforce a culture of transactional selling in an effort to meet an outmoded checklist criteria. Often this is the result of the organizer of the mystery shopper, whether in-house training department or an outside service, fails to overcome the many challenges and potential pitfalls of this service. Below are training tips and suggestions I’ve learned, often the hard way, for overcoming some common obstacles in the hotel mystery shopping business:
•“I just knew it was a mystery shop call.” Hotel sales and reservations agents often report that they were figured out they were field a test call while it was in progress. Interestingly, this comment often comes from the agents who are scoring very low on their call reports. As a manager the first reaction should be, “If you knew it was a shop call, why didn’t you try to perform more effectively?” (What we really want to say is “So, you wanted to get a low score then?”)
The reality is that it is more of a challenge than ever these days to avoid being detected as a mystery shopper. Over the years KTN and other mystery shopping providers have taken steps such as these to minimize this from happening:
◦Use a variety of mystery shopping callers to avoid voice detection.
◦Use mystery shopping callers of various ages, genders, and with a diversity of accents.
◦Prepare in advance with caller profiles that match your market segment. For example, if you have primarily a drive market, mystery shoppers should most often indicate they are calling from nearby regions.
◦Prepare call stories that match the real reasons guests travel to your hotel.
◦Block caller ID if necessary.
Even with the best effort to avoid detection sometimes a good agent will still be able to figure it out before the call ends. This is especially true when shopping corporate hotel salespeople, who often ask for company names and check line while they are on the phone. In these cases when everything else has been done to minimize detection, just remind the salespeople that this is their chance to shine and to show how well they can use the sales strategies. Encourage them to view it as a role playing opportunity.
•“Real callers wouldn’t ask that.” Another frequent complaint of agents is that their real callers don’t ask questions; they don’t want all of that information; most of them just want the price.” Again this is often a legitimate issue, especially with untrained mystery callers who ask too many questions, or questions that are obviously ridiculous. Yet once again it seems the agents who score the lowest often raise this as an issue. On the other hand, I have frequently heard stories where a salesperson “just knew” they were being mystery shopped because someone was asking a lot of strange questions, but then it later turned out to be a real booking. To minimize this as a challenge, make sure your mystery shopping provider takes time to learn about what real callers are asking in today’s world of over-informed, multitasking callers who have more often than not researched online before calling.
It should be noted that many organizations are increasingly implementing call recording systems, which then solves the above two pitfalls and instead allows for real calls from real callers to be used for assessment and coaching purposes. Call centers have numerous systems such as NICE, WITNESS, and OAISYS, all of which are becoming more affordable as a capital investment, especially when they can also be used for guest honesty verification. Even individual hotels and resorts can now use inexpensive, web-based recording systems that require no additional equipment; instead calls are recorded directly from your inbound 800 numbers running through their systems. Hotels can secure it directly from providers such as Guest Direct or eStara
•“You didn’t reach all my agents.” Depending on the size of your staff and your telephone configurations, this is often the biggest “non controllable” mystery shoppers encounter. It’s a bit easier in a group sales or catering office, where salespeople cover set market segments or can even be asked for by name without sending out a red flag. However most reservations offices and call centers all the calls go into a random queue from the ACD (Automatic Call Distribution) system. Still you can help your mystery shopping provider by sending them updated schedules during which they have the greatest chance of reaching the agent being targeted. The fewer the number of sales agents on at one time, the better chance your provider will have at reaching everyone.
•“Please don’t shop my new people.” Mystery shopping companies frequently get this request from our clients, often because the manager is trying to avoid having the new person bring down their monthly overall score so they can achieve a departmental incentive or contest. Yet when you think about it, it’s these new agents that need the feedback from the mystery shopping reports the most in order to improve. A good middle ground we have found is to go ahead and shop the new agents as we do all others whom the guest might reach by dialing the number, but to later delete these reports (after they are sent) from the overall monthly departmental score.
•“Please only shop us on these certain days of week (or times of day) when we are slow.” Again this is a frequent request us mystery shopping companies receive, but to comply would skew the results and make the team look as if they are performing more effectively. It is more effective to have the mystery shopping calls made randomly throughout the day, just as the real calls arrive. When real-world callers have a sub-par experience they certainly don’t stop to think “well they must be busy right, I guess that’s why the service was so bad.”
•“I don’t want to tell the sales team in advance that they are being mystery shopped.” When launching a program, many managers prefer not to notify their staff in advance. This might be fine for one month, in order for managers to assess their overall operation. However it is generally best to notify the staff in advance that such a program is being launched as a pro-active, positive training tool for our sales team to use to get the additional business we really need right now. The worst thing that might happen is that salespeople treat every incoming call is if “this might be the one!”
•“I don’t want to make the results public.” Many managers only show the results to each individual sales agent. Although it is not a good idea to embarrass anyone, especially when programs are just being launched, over time it is best that all mystery shopping scores are posted (or otherwise distributed) to everyone. This way the under-performers can see that others can and do achieve the criteria and those who want to learn can mirror the top-performers.
Besides the above considerations, it is important to properly use the reports to coach the agents. It is not enough just to hand them a checklist and expect improvements. Here are suggestions for coaching the agents:
◦Schedule for the right location and time. Avoid coaching agents on the fly, as mystery shopping reports arrive randomly. Avoid coaching them at their own workspace. Instead, schedule regular blocks of times for coaching and let the agents know in advance. Conduct the coaching in an office or better yet a meeting room.
◦Play the audio recording first before showing them the mystery shopping report. The experience of hearing one’s self on the phone will certainly raise their awareness of how they sound to callers. For example, if they need to speak with more enthusiasm, to speak more slowly or clearly.
◦Ask them to complete a blank checklist to score their own call. Then present the official report.
◦Discuss what was done well and what could have been done more effectively. Avoid language speaking to what was done wrong.
Finally, while it is a good idea to reward those who perform well on their mystery shopping reports with an incentive or prize, it is important that this not be the only incentive. Better to have the main incentive in place being based on other metrics, such as total revenue sold vs. goal, or where it can be measured empirically via technology, have the main incentive based on call conversion ratio. The mystery shopping program should be a secondary incentive or prize, reinforcing that it is simply a tool for helping our sales representatives achieve their revenue goals.
By working in partnership with your mystery shopping provider, whether internally or externally, you can ensure that your investment in telephone sales mystery shopping achieves a ROI many times over. You can also ensure that your sales staff will have every opportunity to learn and incorporate contemporary sales strategies and tactics for today’s confused, multi-tasking callers who have looked at too much information online.
One great tool for maximizing your team’s overall sales effectiveness is to implement an ongoing mystery shopping assessment and coaching program. When properly organized and implemented, mystery shopping reports can help all telephone sales agents provide a less transactional, more conversational, caller-focused sales experience.
Unfortunately too many mystery shopping programs fall short of actualizing their potential as an assessment and coaching tool and instead actually reinforce a culture of transactional selling in an effort to meet an outmoded checklist criteria. Often this is the result of the organizer of the mystery shopper, whether in-house training department or an outside service, fails to overcome the many challenges and potential pitfalls of this service. Below are training tips and suggestions I’ve learned, often the hard way, for overcoming some common obstacles in the hotel mystery shopping business:
•“I just knew it was a mystery shop call.” Hotel sales and reservations agents often report that they were figured out they were field a test call while it was in progress. Interestingly, this comment often comes from the agents who are scoring very low on their call reports. As a manager the first reaction should be, “If you knew it was a shop call, why didn’t you try to perform more effectively?” (What we really want to say is “So, you wanted to get a low score then?”)
The reality is that it is more of a challenge than ever these days to avoid being detected as a mystery shopper. Over the years KTN and other mystery shopping providers have taken steps such as these to minimize this from happening:
◦Use a variety of mystery shopping callers to avoid voice detection.
◦Use mystery shopping callers of various ages, genders, and with a diversity of accents.
◦Prepare in advance with caller profiles that match your market segment. For example, if you have primarily a drive market, mystery shoppers should most often indicate they are calling from nearby regions.
◦Prepare call stories that match the real reasons guests travel to your hotel.
◦Block caller ID if necessary.
Even with the best effort to avoid detection sometimes a good agent will still be able to figure it out before the call ends. This is especially true when shopping corporate hotel salespeople, who often ask for company names and check line while they are on the phone. In these cases when everything else has been done to minimize detection, just remind the salespeople that this is their chance to shine and to show how well they can use the sales strategies. Encourage them to view it as a role playing opportunity.
•“Real callers wouldn’t ask that.” Another frequent complaint of agents is that their real callers don’t ask questions; they don’t want all of that information; most of them just want the price.” Again this is often a legitimate issue, especially with untrained mystery callers who ask too many questions, or questions that are obviously ridiculous. Yet once again it seems the agents who score the lowest often raise this as an issue. On the other hand, I have frequently heard stories where a salesperson “just knew” they were being mystery shopped because someone was asking a lot of strange questions, but then it later turned out to be a real booking. To minimize this as a challenge, make sure your mystery shopping provider takes time to learn about what real callers are asking in today’s world of over-informed, multitasking callers who have more often than not researched online before calling.
It should be noted that many organizations are increasingly implementing call recording systems, which then solves the above two pitfalls and instead allows for real calls from real callers to be used for assessment and coaching purposes. Call centers have numerous systems such as NICE, WITNESS, and OAISYS, all of which are becoming more affordable as a capital investment, especially when they can also be used for guest honesty verification. Even individual hotels and resorts can now use inexpensive, web-based recording systems that require no additional equipment; instead calls are recorded directly from your inbound 800 numbers running through their systems. Hotels can secure it directly from providers such as Guest Direct or eStara
•“You didn’t reach all my agents.” Depending on the size of your staff and your telephone configurations, this is often the biggest “non controllable” mystery shoppers encounter. It’s a bit easier in a group sales or catering office, where salespeople cover set market segments or can even be asked for by name without sending out a red flag. However most reservations offices and call centers all the calls go into a random queue from the ACD (Automatic Call Distribution) system. Still you can help your mystery shopping provider by sending them updated schedules during which they have the greatest chance of reaching the agent being targeted. The fewer the number of sales agents on at one time, the better chance your provider will have at reaching everyone.
•“Please don’t shop my new people.” Mystery shopping companies frequently get this request from our clients, often because the manager is trying to avoid having the new person bring down their monthly overall score so they can achieve a departmental incentive or contest. Yet when you think about it, it’s these new agents that need the feedback from the mystery shopping reports the most in order to improve. A good middle ground we have found is to go ahead and shop the new agents as we do all others whom the guest might reach by dialing the number, but to later delete these reports (after they are sent) from the overall monthly departmental score.
•“Please only shop us on these certain days of week (or times of day) when we are slow.” Again this is a frequent request us mystery shopping companies receive, but to comply would skew the results and make the team look as if they are performing more effectively. It is more effective to have the mystery shopping calls made randomly throughout the day, just as the real calls arrive. When real-world callers have a sub-par experience they certainly don’t stop to think “well they must be busy right, I guess that’s why the service was so bad.”
•“I don’t want to tell the sales team in advance that they are being mystery shopped.” When launching a program, many managers prefer not to notify their staff in advance. This might be fine for one month, in order for managers to assess their overall operation. However it is generally best to notify the staff in advance that such a program is being launched as a pro-active, positive training tool for our sales team to use to get the additional business we really need right now. The worst thing that might happen is that salespeople treat every incoming call is if “this might be the one!”
•“I don’t want to make the results public.” Many managers only show the results to each individual sales agent. Although it is not a good idea to embarrass anyone, especially when programs are just being launched, over time it is best that all mystery shopping scores are posted (or otherwise distributed) to everyone. This way the under-performers can see that others can and do achieve the criteria and those who want to learn can mirror the top-performers.
Besides the above considerations, it is important to properly use the reports to coach the agents. It is not enough just to hand them a checklist and expect improvements. Here are suggestions for coaching the agents:
◦Schedule for the right location and time. Avoid coaching agents on the fly, as mystery shopping reports arrive randomly. Avoid coaching them at their own workspace. Instead, schedule regular blocks of times for coaching and let the agents know in advance. Conduct the coaching in an office or better yet a meeting room.
◦Play the audio recording first before showing them the mystery shopping report. The experience of hearing one’s self on the phone will certainly raise their awareness of how they sound to callers. For example, if they need to speak with more enthusiasm, to speak more slowly or clearly.
◦Ask them to complete a blank checklist to score their own call. Then present the official report.
◦Discuss what was done well and what could have been done more effectively. Avoid language speaking to what was done wrong.
Finally, while it is a good idea to reward those who perform well on their mystery shopping reports with an incentive or prize, it is important that this not be the only incentive. Better to have the main incentive in place being based on other metrics, such as total revenue sold vs. goal, or where it can be measured empirically via technology, have the main incentive based on call conversion ratio. The mystery shopping program should be a secondary incentive or prize, reinforcing that it is simply a tool for helping our sales representatives achieve their revenue goals.
By working in partnership with your mystery shopping provider, whether internally or externally, you can ensure that your investment in telephone sales mystery shopping achieves a ROI many times over. You can also ensure that your sales staff will have every opportunity to learn and incorporate contemporary sales strategies and tactics for today’s confused, multi-tasking callers who have looked at too much information online.
Monday, July 19, 2010
Dealing with default: What’s next?
The recession may be over from an empirical standpoint, but that doesn’t mean lenders have stopped pressuring owners. Now is the time when the aftereffects of the downturn are really taking hold, leaving many owners struggling to hang on by their fingertips.
But there are alternatives to mailing in the keys, according to panelists during a session titled “Hotels In Default: What’s Next?” at the Midwest Lodging Investment Summit this week.
The dominant strategy thus far has been to extend and pretend, when a lender gives temporary financial respite to a borrower. And though the technique doesn’t address the financial hit needed to get back to a healthy state of lending, it does give owners the chance to live to fight another day, said Steve Van, president and CEO of Prism Hotels.
“Why would we quit extending and pretending because no one wants to say, ‘Hey remember that loan we made for (US)$100 million? It’s worth (US)$40 million,’” he said.
The “workout mentality” has begun to take hold for some lenders, however, said Biff Hawkey, senior VP of development for Hostmark Hospitality Group, but the volume of defaulted properties is so great that it’s taking incredibly long to make a dent in the distress.
Van has even gone so far as to tell some clients to avoid engaging lenders altogether despite looming debt payments. Financial institutions often are so backed up that owners might be able to hold out for two or three years—which might be enough time for things to turn around.
Rules of engagement
But not all owners will abide by this wait-and-see approach. For those wishing to engage lenders, they must think of what each party wants, said Rick Takach, Jr., president and CEO of Vesta Hospitality.
If the asset shows promise, the lender and owner are far more willing to restructure the deal than if it were a money pit, for example.
But regardless of what either side wants, owners have to bring their checkbooks—better yet, a new partner’s checkbook—to the table.
“I have found that I cannot get anybody to do anything without putting new cash into the deal,” Takach said.
“From the lender’s perspective, you’re not ready to restructure unless you’re doing something with new capital,” added Scott Steilen, principal with Warnick Company.
Exit strategies
If you’re looking for a Resolution Trust Corporation 2.0 to unclog the transaction markets, don’t get your hopes up, Van said. While the government-run program worked great 20 years ago, the sheer scale of the current conundrum can’t be dealt with in the same way.
“Last time it was a (US)$200-billion problem,” Van explained. “Today it’s a (US)$2-trillion, (US)$3-trillion problem,” adding that if a RTC-like mechanism did force the industry to liquidate its pool of distressed assets, the hit would have sent many into a full-scale depression.
And even if every distressed asset came to market, there’s not enough financing available to purchase them, Steilen said.
“Most of the finance opportunities that exist today are for fairly stable assets, reasonably performing assets, and (loan-to-value) in that 50-65 (percent) range,” he said.
We’re in the ditch, Van said, and we’ll be here for a long time. “We might as well learn to make a living at it.”
The good news is that industry fundamentals have turned the corner. Occupancy is up, and rate soon might follow suit, Hawkey said. That might get us through the necessary five to seven years of market corrections.
Or, if owners preferred, they can sell. Van said now might be the best time for many owners to unload their assets. With a lot of equity chasing a few quality assets, some buyers are even overpaying.
It depends on your asset, of course, Hawkey reminded attendees.
“The truth is there have always been pockets of prosperity in the United States,” he said. “… If you’ve got an asset in one of those cities … you have to give a lot of consideration to it.”
Wait too long, however, and your asset might come to market with a swell of other distressed properties. Despite previously erroneous claims for a flood of buying opportunities, the time is coming—eventually, the panelists agreed.
Many key franchisors have said they have more delinquencies today than ever before, which means more product than ever before will be coming to market, Takach said.
But there are alternatives to mailing in the keys, according to panelists during a session titled “Hotels In Default: What’s Next?” at the Midwest Lodging Investment Summit this week.
The dominant strategy thus far has been to extend and pretend, when a lender gives temporary financial respite to a borrower. And though the technique doesn’t address the financial hit needed to get back to a healthy state of lending, it does give owners the chance to live to fight another day, said Steve Van, president and CEO of Prism Hotels.
“Why would we quit extending and pretending because no one wants to say, ‘Hey remember that loan we made for (US)$100 million? It’s worth (US)$40 million,’” he said.
The “workout mentality” has begun to take hold for some lenders, however, said Biff Hawkey, senior VP of development for Hostmark Hospitality Group, but the volume of defaulted properties is so great that it’s taking incredibly long to make a dent in the distress.
Van has even gone so far as to tell some clients to avoid engaging lenders altogether despite looming debt payments. Financial institutions often are so backed up that owners might be able to hold out for two or three years—which might be enough time for things to turn around.
Rules of engagement
But not all owners will abide by this wait-and-see approach. For those wishing to engage lenders, they must think of what each party wants, said Rick Takach, Jr., president and CEO of Vesta Hospitality.
If the asset shows promise, the lender and owner are far more willing to restructure the deal than if it were a money pit, for example.
But regardless of what either side wants, owners have to bring their checkbooks—better yet, a new partner’s checkbook—to the table.
“I have found that I cannot get anybody to do anything without putting new cash into the deal,” Takach said.
“From the lender’s perspective, you’re not ready to restructure unless you’re doing something with new capital,” added Scott Steilen, principal with Warnick Company.
Exit strategies
If you’re looking for a Resolution Trust Corporation 2.0 to unclog the transaction markets, don’t get your hopes up, Van said. While the government-run program worked great 20 years ago, the sheer scale of the current conundrum can’t be dealt with in the same way.
“Last time it was a (US)$200-billion problem,” Van explained. “Today it’s a (US)$2-trillion, (US)$3-trillion problem,” adding that if a RTC-like mechanism did force the industry to liquidate its pool of distressed assets, the hit would have sent many into a full-scale depression.
And even if every distressed asset came to market, there’s not enough financing available to purchase them, Steilen said.
“Most of the finance opportunities that exist today are for fairly stable assets, reasonably performing assets, and (loan-to-value) in that 50-65 (percent) range,” he said.
We’re in the ditch, Van said, and we’ll be here for a long time. “We might as well learn to make a living at it.”
The good news is that industry fundamentals have turned the corner. Occupancy is up, and rate soon might follow suit, Hawkey said. That might get us through the necessary five to seven years of market corrections.
Or, if owners preferred, they can sell. Van said now might be the best time for many owners to unload their assets. With a lot of equity chasing a few quality assets, some buyers are even overpaying.
It depends on your asset, of course, Hawkey reminded attendees.
“The truth is there have always been pockets of prosperity in the United States,” he said. “… If you’ve got an asset in one of those cities … you have to give a lot of consideration to it.”
Wait too long, however, and your asset might come to market with a swell of other distressed properties. Despite previously erroneous claims for a flood of buying opportunities, the time is coming—eventually, the panelists agreed.
Many key franchisors have said they have more delinquencies today than ever before, which means more product than ever before will be coming to market, Takach said.
3 Changes We Will See In Hotel Marketing In 2011
Neil Salerno writes
In the last two years, the economy has taken a severe toll on our industry and its resources. In the resulting scramble to stay afloat, many hotels turned to every marketing and operational technique they could uncover. Some of those techniques helped, some didn't. Many hoteliers searched for that one unique tactic which would turn everything around; only to find that it doesn't exist.
Experimentation is always expensive in terms of time and human resources. The simple fact is that the basic tactics of hotel sales and marketing still work. My impression is that, in recent years, many hoteliers have drifted away from the basics, in favor of new technology and the many unrealistic promises about the use of non-travel related social media. This type of social media has not yet made any impact for individual hotels.
Beginning in 2011 or sooner, I believe that we will see many hotels return to a more balanced marketing strategy. More hotels will return to the time-proven tactics of creating more personal contacts and a resolute effort to develop longer lasting business relationships. The climate is ripe for a return to customer relations management after several years of the de-personalization of relationships inherit with the Internet.
I believe that more hotels will begin prioritizing tactics within their marketing strategy to eliminate wasted efforts and maximize time spent on those things that actually produce business. The Internet and other forms of electronic marketing should supplement and enhance your property sales efforts, not replace it. I believe that the Internet can have a significant impact on a hotel's marketing coverage and resultant revenue income, but it is not the only way to market a hotel.
Less Multi-Tasking, More Specialization
During the economic crisis, many hotels were forced to eliminate, or simply not replace, some key positions, which forced the remaining staff to take-on additional tasks and responsibilities; multi-tasking has become the norm in many hotels. As the business climate improves, I see a growing trend to return to hiring sales specialists to create new contacts and build hotel sales.
There is a growing trend for hotels to out-source Internet and electronic marketing in order to free-up time and dollars to be re-directed toward the property sales effort. Outsourcing these tasks allows hotels to concentrate on their core marketing tactics to build long-term business the way we did before the Internet.
On the other hand, many more hotel site designers need to take-on full responsibility for the marketing and sales production of the websites they design. Hotel website designers who design a hotel website, publish it, and "forget it" need to rethink their positions. I believe that our industry will see many more productive sites if site designers begin to accept the responsibility for the reservation and sales results of the sites they design.
This will force website designers to build sites which produce sales and not simply design sites which look attractive, but are dysfunctional from a search and sales stand-point. More site designers are also beginning to realize that there is much more to marketing on the Internet than simply using search engine optimization. A relatively new term for hotels "Search Engine Marketing" needs to be adopted by site designers.
Search engine marketing includes destination marketing, which is so vital for search; creating online packages and promotions, using social media to build in-bound links, using online blogs, application of site analytics results, and blast email mailings; all necessary to the search and sales success of a hotel website.
A Stronger Focus on Creating Profitable Revenue
During the economic crisis, hotel revenue management experienced a resurgence of interest among hoteliers. The reduction in sales volume forced many hoteliers to "sell smarter"., not just harder. Revenue management was created to build net income while maximizing occupancy through rate and inventory management.
Revenue management takes the focus off of just selling rooms to concentrating on building net income. Many of those hotels which drastically dropped their rates during the recession will find it extremely difficult to bring them back to more profitable levels as the recession recedes. Unfortunately, many of these hoteliers resorted to drastically reducing rates because they just didn't know what else to do.
In 2011, it is my hope that more hotels will get on the revenue management band-wagon. There are many forms of RM and most of them will work to build income and reduce the tendency to leave revenue on the table, sell more rooms, but produce less profit.
In the last two years, the economy has taken a severe toll on our industry and its resources. In the resulting scramble to stay afloat, many hotels turned to every marketing and operational technique they could uncover. Some of those techniques helped, some didn't. Many hoteliers searched for that one unique tactic which would turn everything around; only to find that it doesn't exist.
Experimentation is always expensive in terms of time and human resources. The simple fact is that the basic tactics of hotel sales and marketing still work. My impression is that, in recent years, many hoteliers have drifted away from the basics, in favor of new technology and the many unrealistic promises about the use of non-travel related social media. This type of social media has not yet made any impact for individual hotels.
Beginning in 2011 or sooner, I believe that we will see many hotels return to a more balanced marketing strategy. More hotels will return to the time-proven tactics of creating more personal contacts and a resolute effort to develop longer lasting business relationships. The climate is ripe for a return to customer relations management after several years of the de-personalization of relationships inherit with the Internet.
I believe that more hotels will begin prioritizing tactics within their marketing strategy to eliminate wasted efforts and maximize time spent on those things that actually produce business. The Internet and other forms of electronic marketing should supplement and enhance your property sales efforts, not replace it. I believe that the Internet can have a significant impact on a hotel's marketing coverage and resultant revenue income, but it is not the only way to market a hotel.
Less Multi-Tasking, More Specialization
During the economic crisis, many hotels were forced to eliminate, or simply not replace, some key positions, which forced the remaining staff to take-on additional tasks and responsibilities; multi-tasking has become the norm in many hotels. As the business climate improves, I see a growing trend to return to hiring sales specialists to create new contacts and build hotel sales.
There is a growing trend for hotels to out-source Internet and electronic marketing in order to free-up time and dollars to be re-directed toward the property sales effort. Outsourcing these tasks allows hotels to concentrate on their core marketing tactics to build long-term business the way we did before the Internet.
On the other hand, many more hotel site designers need to take-on full responsibility for the marketing and sales production of the websites they design. Hotel website designers who design a hotel website, publish it, and "forget it" need to rethink their positions. I believe that our industry will see many more productive sites if site designers begin to accept the responsibility for the reservation and sales results of the sites they design.
This will force website designers to build sites which produce sales and not simply design sites which look attractive, but are dysfunctional from a search and sales stand-point. More site designers are also beginning to realize that there is much more to marketing on the Internet than simply using search engine optimization. A relatively new term for hotels "Search Engine Marketing" needs to be adopted by site designers.
Search engine marketing includes destination marketing, which is so vital for search; creating online packages and promotions, using social media to build in-bound links, using online blogs, application of site analytics results, and blast email mailings; all necessary to the search and sales success of a hotel website.
A Stronger Focus on Creating Profitable Revenue
During the economic crisis, hotel revenue management experienced a resurgence of interest among hoteliers. The reduction in sales volume forced many hoteliers to "sell smarter"., not just harder. Revenue management was created to build net income while maximizing occupancy through rate and inventory management.
Revenue management takes the focus off of just selling rooms to concentrating on building net income. Many of those hotels which drastically dropped their rates during the recession will find it extremely difficult to bring them back to more profitable levels as the recession recedes. Unfortunately, many of these hoteliers resorted to drastically reducing rates because they just didn't know what else to do.
In 2011, it is my hope that more hotels will get on the revenue management band-wagon. There are many forms of RM and most of them will work to build income and reduce the tendency to leave revenue on the table, sell more rooms, but produce less profit.
Wednesday, July 14, 2010
Evolution of Hotel Pricing..
Today we decided to take a look back at the history and evolution of pricing in hotels and distribution. A lot, really a lot has changed in hotel revenue management over the last 10 years. It’s funny how quickly we have adapted to all new developments like it has been like this for ever…..
The growth of internet distribution has had the deepest impact on our rate strategies. With rates being distributed publicly on such a large scale, even corporate and consortia contracts are being pushed to become more dynamic and competitive. It is a pure natural development.
Of course this couple with the wide spread implementation of revenue management cultures and yield strategies in hotels. No longer are we working with static seasonal rates, even in many resorts.
Here an overview of some historical highlights in the evolution of hotel pricing:
•1998 - Priceline introduces Opaque rates
•2003 - Industry wide acceptance of the Rate Parity concept
•2003 - Marriott and AMEX change fixed prices to dynamic pricing
•2003 - Opaque rates grow, as Expedia scoops up Hotwire
•2004 - Hilton and Intercontinental stop using fixed rates with Consortia
•2004 - Wholesalers and FIT’s start publishing offline rates online
•2004 - Introduction of Dynamic Rate Rules (stay 4 pay 3 discounts) by OTA in order to get more competitive rates, and break rate parity
•2005 - Accor moves to dynamic pricing model and reduces allotments
•2005 - Hyatt and Starwood introduce flexible pricing models to selected corporate accounts
•2006 - Introduction of B.A.R (Best Available Rate)
•2006 - Introduction of Non-Refundable and Pre-Paid rates on hotel’s own websites
•2007 - LRA - Last Room Availability on corporate contracts being questioned
•2008 - More acceptance by corporate accounts of rate derived from a Floating BAR
•2008 - Meta-search websites like Kayak and HotelsCombined offer price transparency across the web.
•2008 - OTA’s launch hidden or secret hotel program to compete with Opaque rates
•2009 - Resort Hotels moving more and more away from seasonal into dynamic pricing
•2009 - OTA add value added promotion packages, at preset rates. By adding value and masking the rate, hotels feel that their price integrity stays intact
•2009 - Direct PMS interfaces make OTA give up guaranteed allotment for Last Room Availability
•2009 - Wide spread publication of Opaque and Wholesale / FIT rates, breaking the Rate Parity strategies of hotels.
•2010 - Flash Sales introduced by OTA's = temporary discount, even for just one hour to pick up a few extra occupancy points.
•2010 - Google is testing to display rates in hotel listing on Google Maps
I am not sure if we got all the years exactly right, but that is beside the point. Important fact is that in a few years time decades of hotel pricing strategies became outdated.
Don’t be surprised if overnight new developments come about. The OTA and Travel Websites continue looking for creative ways to obtain more competitive offers than their competition. Best Rate is still the name of the game in online sales.
With the move of Google into meta-search this month, the rate parity struggle by hotels and competitive battle between OTA will only intensify. And with the social media and networks changing consumer internet behavior we certainly have interesting times ahead of us.
The growth of internet distribution has had the deepest impact on our rate strategies. With rates being distributed publicly on such a large scale, even corporate and consortia contracts are being pushed to become more dynamic and competitive. It is a pure natural development.
Of course this couple with the wide spread implementation of revenue management cultures and yield strategies in hotels. No longer are we working with static seasonal rates, even in many resorts.
Here an overview of some historical highlights in the evolution of hotel pricing:
•1998 - Priceline introduces Opaque rates
•2003 - Industry wide acceptance of the Rate Parity concept
•2003 - Marriott and AMEX change fixed prices to dynamic pricing
•2003 - Opaque rates grow, as Expedia scoops up Hotwire
•2004 - Hilton and Intercontinental stop using fixed rates with Consortia
•2004 - Wholesalers and FIT’s start publishing offline rates online
•2004 - Introduction of Dynamic Rate Rules (stay 4 pay 3 discounts) by OTA in order to get more competitive rates, and break rate parity
•2005 - Accor moves to dynamic pricing model and reduces allotments
•2005 - Hyatt and Starwood introduce flexible pricing models to selected corporate accounts
•2006 - Introduction of B.A.R (Best Available Rate)
•2006 - Introduction of Non-Refundable and Pre-Paid rates on hotel’s own websites
•2007 - LRA - Last Room Availability on corporate contracts being questioned
•2008 - More acceptance by corporate accounts of rate derived from a Floating BAR
•2008 - Meta-search websites like Kayak and HotelsCombined offer price transparency across the web.
•2008 - OTA’s launch hidden or secret hotel program to compete with Opaque rates
•2009 - Resort Hotels moving more and more away from seasonal into dynamic pricing
•2009 - OTA add value added promotion packages, at preset rates. By adding value and masking the rate, hotels feel that their price integrity stays intact
•2009 - Direct PMS interfaces make OTA give up guaranteed allotment for Last Room Availability
•2009 - Wide spread publication of Opaque and Wholesale / FIT rates, breaking the Rate Parity strategies of hotels.
•2010 - Flash Sales introduced by OTA's = temporary discount, even for just one hour to pick up a few extra occupancy points.
•2010 - Google is testing to display rates in hotel listing on Google Maps
I am not sure if we got all the years exactly right, but that is beside the point. Important fact is that in a few years time decades of hotel pricing strategies became outdated.
Don’t be surprised if overnight new developments come about. The OTA and Travel Websites continue looking for creative ways to obtain more competitive offers than their competition. Best Rate is still the name of the game in online sales.
With the move of Google into meta-search this month, the rate parity struggle by hotels and competitive battle between OTA will only intensify. And with the social media and networks changing consumer internet behavior we certainly have interesting times ahead of us.
Hotel Lawyer with a critical update on the state of the industry
Hotel Lawyer with a critical update on the state of the industry
Today, the JW Marriott Los Angeles, we got an update on the state of the lodging industry from two of my favorite industry leaders: Mark Woodworth, President of Hospitality Research, and Mark Lomanno, President of Smith Travel Research.
Today, the JW Marriott Los Angeles, we got an update on the state of the lodging industry from two of my favorite industry leaders: Mark Woodworth, President of Hospitality Research, and Mark Lomanno, President of Smith Travel Research.
Tuesday, July 13, 2010
The Hybrid Theory Manifesto: The Future of Marketing, Advertising, and Communications Part One
Hybrid Theory
ˈhīˌbrid thee-uh-ree
: The fusion of creative and communications, combining earned and paid media to enliven ideas, unite communities, amplify stories and spark desired outcomes.
Part One of Three…
Marketing, advertising, service, communications, and business dynamics in general is undergoing incredible transformation. The innovation transpiring across the board however, wasn’t ushered out of vision as much as it was pressured through the democratization of content and the equalization of influence. After years of the socialized media changing how individuals find, create, consume, and share information, we are approaching the cusp of following markets to leading them.
Business and its supporting branches of information dissemination, connection, and contact, are no longer practical in the era of interactive media. A new philosophy and methodology is required to effectively shed the perpetual cycle of catching up to consumer behavior. Doing so will position us for prominence and influence to guide experiences, direction, and earn presence through not only traditional media, but also through the opinions, thoughts, and ultimately public validations of our influencers and influential consumers. But it will take more than ideas, creative approaches, or simply “showing up” to the conversation. A new skill set is required to effectively compete for attention, mindshare and ultimately affinity. Hybrid Theory introduces a workforce of cross-breeds , experts who master an array of marketing artistry, social sciences such as psychology and sociology, creative vision, business dynamics, service, and communications. These individuals do not displace the authorities in their respective disciplines, they simply extend their capabilities into new media and corresponding domains and markets.
Social Media Upsets the Balance
In social networks, attention is earned and engagement is a privilege. But instead of innovating or identifying opportunities for meaningful internal and external collaboration and engagement, many organizations and the teams that support them, debate over who owns social media on behalf of the brand. The answer to the question of “who owns social media” is not representative of the opportunity that seemingly eludes most organizations.
In its sixth Communication and Public Relations Generally Accepted Practices (GAP) study produced by the Strategic and Public Relations Center at the USC Annenberg School for Communication & Journalism, it appeared as though a clear winner was crowned in the tug of war for social media governorship. According to the report, more than 25% of companies placed between 81 to 100 percent of budgetary control over social medias compared to only 12.6 percent going to marketing. In addition, one quarter of respondents claimed that PR held strategic control over social media as a whole within their organizations and only 9 percent was bestowed upon marketing. An interesting point of note is that just over 25 percent stated that marketing held zero budgetary control and 22 percent said marketing maintained no strategic control whatsoever.
Jerry Swerling, Director of the Strategic and Public Relations Center explained the results, “[Social media] require a relatively non-commercial approach; they entail dialogue rather than monologue; they often convey objective information rather than product features; and they tend to be free-form in nature, which is just the opposite of the highly controlled world of marketing.”
If you believe the information contained within this study, PR is a clear beneficiary of the strategies and purse strings that drive corporate social media. But to say that it is the industry standard or even the right or only answer, is far from reality. While Public Relations may not operate with commercial motives, it doesn’t operate without its own bias and agenda. It is only one part of the overall marketing mix and it too, is in need of reinvention.
The truth is that while we control the top down aspects of branding, it is the people who define our stature in social media today. Their views are emanated through the impressions, perceptions, and opinions they not only harbor, but also share via word of mouth in the real world and in the networks that connect us socially. The web has a long memory and the words of customers enjoy the same visibility, if not sometimes greater, through the SEO and SMO that we employ in our marketing efforts.
So in the great debate as to social media ownership, for the time being, it appears as though it’s not created, but co-created. As such, our best interests are served in the investment of time and energy in identifying the missing elements that currently prevent our business from embodying a true 360 approach in all we do. Doing so opens the doors to identify and apply specific value and resources to where it’s most critical and to specifically match capabilities with needs.
The socialization of media begets an approach that’s reverse engineered in order to affect the culture of our organization to inspire relevance in our markets and in turn, socialize the outbound efforts that connect products, services, and communications across every impacted branch of our business. In the process, we’ll find that the only thing that changes in terms of ownership of social today is the introduction of shared equality and equity in the engagement of our stakeholders through the evolved mechanics of:
- PR
- Marketing
- Advertising
- HR
- Finance
- Sales
- Service
- Product
- R&D
- Strategic Alliances
- Et al
A hybrid approach is required to ensure that engagement is focused and genuine in order to meet the needs and expectations of today’s social consumer.
The Five P’s of the Marketing Mix
Social networks and the prevailing cultures within each foster interaction and reward active contributors with visibility and connectedness. As individuals in online networks earn prominence, it’s clear that their authority and influence is only expanding. As we’re learning, people and their actions and words, are now critical ingredients in business. Therefore, a 360 approach is only complete through the integration of a fifth “P” to the marketing mix, people.
We’re familiar with the Four P’s of the marketing mix. For those who need or perhaps would enjoy a refresher, the term “marketing mix” stepped into the spotlight when Neil H. Borden published, The Concept of the Marketing Mix in 1964. In the late 1940’s, Borden adopted the term in his teachings inspired by James Culliton who had described the marketing manager as a “mixer of ingredients.” Borden grouped the ingredients of the marketing mix in 13 parts, product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, fact finding and analysis. Years later, E. Jerome McCarthy grouped these ingredients into what we now refer to as e 4 P’s of marketing:
1. Product
2. Price
3. Place
4. Promotion
Source: NetMBA.com
The Four P’s represent the variables controlled by a marketing manager as dictated by the internal and external dynamics of the market ecosystem. Originally, the 4 Ps were designed to create the perception of value in order to drive activity and in a positive and profitable direction.
In the era of social media, the 4 Ps require a new tenant in order to make its rent. Now in 2010, social media upset the balance of top down communication. Whereas organizations thrived on the governed dissemination of information as of a form of control nowadays, many of the intermediaries and individuals they hope to reach are now far more influential than we may realize.
As content production and dissemination is democratized and influence is equalized accordingly, a new “P” is necessary to ensure the integrity of the existing 4 P’s.
People = The Fifth Element
Connect with Brian Solis on Twitter, LinkedIn, Tumblr, Google Buzz, Facebook
ˈhīˌbrid thee-uh-ree
: The fusion of creative and communications, combining earned and paid media to enliven ideas, unite communities, amplify stories and spark desired outcomes.
Part One of Three…
Marketing, advertising, service, communications, and business dynamics in general is undergoing incredible transformation. The innovation transpiring across the board however, wasn’t ushered out of vision as much as it was pressured through the democratization of content and the equalization of influence. After years of the socialized media changing how individuals find, create, consume, and share information, we are approaching the cusp of following markets to leading them.
Business and its supporting branches of information dissemination, connection, and contact, are no longer practical in the era of interactive media. A new philosophy and methodology is required to effectively shed the perpetual cycle of catching up to consumer behavior. Doing so will position us for prominence and influence to guide experiences, direction, and earn presence through not only traditional media, but also through the opinions, thoughts, and ultimately public validations of our influencers and influential consumers. But it will take more than ideas, creative approaches, or simply “showing up” to the conversation. A new skill set is required to effectively compete for attention, mindshare and ultimately affinity. Hybrid Theory introduces a workforce of cross-breeds , experts who master an array of marketing artistry, social sciences such as psychology and sociology, creative vision, business dynamics, service, and communications. These individuals do not displace the authorities in their respective disciplines, they simply extend their capabilities into new media and corresponding domains and markets.
Social Media Upsets the Balance
In social networks, attention is earned and engagement is a privilege. But instead of innovating or identifying opportunities for meaningful internal and external collaboration and engagement, many organizations and the teams that support them, debate over who owns social media on behalf of the brand. The answer to the question of “who owns social media” is not representative of the opportunity that seemingly eludes most organizations.
In its sixth Communication and Public Relations Generally Accepted Practices (GAP) study produced by the Strategic and Public Relations Center at the USC Annenberg School for Communication & Journalism, it appeared as though a clear winner was crowned in the tug of war for social media governorship. According to the report, more than 25% of companies placed between 81 to 100 percent of budgetary control over social medias compared to only 12.6 percent going to marketing. In addition, one quarter of respondents claimed that PR held strategic control over social media as a whole within their organizations and only 9 percent was bestowed upon marketing. An interesting point of note is that just over 25 percent stated that marketing held zero budgetary control and 22 percent said marketing maintained no strategic control whatsoever.
Jerry Swerling, Director of the Strategic and Public Relations Center explained the results, “[Social media] require a relatively non-commercial approach; they entail dialogue rather than monologue; they often convey objective information rather than product features; and they tend to be free-form in nature, which is just the opposite of the highly controlled world of marketing.”
If you believe the information contained within this study, PR is a clear beneficiary of the strategies and purse strings that drive corporate social media. But to say that it is the industry standard or even the right or only answer, is far from reality. While Public Relations may not operate with commercial motives, it doesn’t operate without its own bias and agenda. It is only one part of the overall marketing mix and it too, is in need of reinvention.
The truth is that while we control the top down aspects of branding, it is the people who define our stature in social media today. Their views are emanated through the impressions, perceptions, and opinions they not only harbor, but also share via word of mouth in the real world and in the networks that connect us socially. The web has a long memory and the words of customers enjoy the same visibility, if not sometimes greater, through the SEO and SMO that we employ in our marketing efforts.
So in the great debate as to social media ownership, for the time being, it appears as though it’s not created, but co-created. As such, our best interests are served in the investment of time and energy in identifying the missing elements that currently prevent our business from embodying a true 360 approach in all we do. Doing so opens the doors to identify and apply specific value and resources to where it’s most critical and to specifically match capabilities with needs.
The socialization of media begets an approach that’s reverse engineered in order to affect the culture of our organization to inspire relevance in our markets and in turn, socialize the outbound efforts that connect products, services, and communications across every impacted branch of our business. In the process, we’ll find that the only thing that changes in terms of ownership of social today is the introduction of shared equality and equity in the engagement of our stakeholders through the evolved mechanics of:
- PR
- Marketing
- Advertising
- HR
- Finance
- Sales
- Service
- Product
- R&D
- Strategic Alliances
- Et al
A hybrid approach is required to ensure that engagement is focused and genuine in order to meet the needs and expectations of today’s social consumer.
The Five P’s of the Marketing Mix
Social networks and the prevailing cultures within each foster interaction and reward active contributors with visibility and connectedness. As individuals in online networks earn prominence, it’s clear that their authority and influence is only expanding. As we’re learning, people and their actions and words, are now critical ingredients in business. Therefore, a 360 approach is only complete through the integration of a fifth “P” to the marketing mix, people.
We’re familiar with the Four P’s of the marketing mix. For those who need or perhaps would enjoy a refresher, the term “marketing mix” stepped into the spotlight when Neil H. Borden published, The Concept of the Marketing Mix in 1964. In the late 1940’s, Borden adopted the term in his teachings inspired by James Culliton who had described the marketing manager as a “mixer of ingredients.” Borden grouped the ingredients of the marketing mix in 13 parts, product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, fact finding and analysis. Years later, E. Jerome McCarthy grouped these ingredients into what we now refer to as e 4 P’s of marketing:
1. Product
2. Price
3. Place
4. Promotion
Source: NetMBA.com
The Four P’s represent the variables controlled by a marketing manager as dictated by the internal and external dynamics of the market ecosystem. Originally, the 4 Ps were designed to create the perception of value in order to drive activity and in a positive and profitable direction.
In the era of social media, the 4 Ps require a new tenant in order to make its rent. Now in 2010, social media upset the balance of top down communication. Whereas organizations thrived on the governed dissemination of information as of a form of control nowadays, many of the intermediaries and individuals they hope to reach are now far more influential than we may realize.
As content production and dissemination is democratized and influence is equalized accordingly, a new “P” is necessary to ensure the integrity of the existing 4 P’s.
People = The Fifth Element
Connect with Brian Solis on Twitter, LinkedIn, Tumblr, Google Buzz, Facebook
Hotel Labor Lawyer Alert: U.S. Department of Labor targets the hospitality industry
Hotel Lawyer with an alert about the DOL's historic action targeting hotels.
The U.S. Department of Labor (DOL) is taking historic action. With a huge increase in funding and staffing, the DOL is specifically targeting audits and enforcement actions for every hotel, motel, and resort in the U.S. The program will search for violations of overtime rules, minimum wage, and classification of exempt and non-exempt positions. In addition, one of the primary focal points of these audits will be employers with workers holding H-2B visas.
But lodging employers are at risk regardless of whether they have any H-2B employees. We expect the DOL compliance audits and enforcement actions to cover every Federal labor wage and hour regulation.
Hotel labor lawyer Marta Fernandez in today's Alert gives us "4 things that you should do now --before it is too late."
For other articles on hotel labor law issues, please go to www.HotelLawBlog.com, click on the "HOTEL LAW TOPICS" tab at the top of the home page, and then select "Labor & Employment"
The U.S. Department of Labor (DOL) is taking historic action. With a huge increase in funding and staffing, the DOL is specifically targeting audits and enforcement actions for every hotel, motel, and resort in the U.S. The program will search for violations of overtime rules, minimum wage, and classification of exempt and non-exempt positions. In addition, one of the primary focal points of these audits will be employers with workers holding H-2B visas.
But lodging employers are at risk regardless of whether they have any H-2B employees. We expect the DOL compliance audits and enforcement actions to cover every Federal labor wage and hour regulation.
Hotel labor lawyer Marta Fernandez in today's Alert gives us "4 things that you should do now --before it is too late."
For other articles on hotel labor law issues, please go to www.HotelLawBlog.com, click on the "HOTEL LAW TOPICS" tab at the top of the home page, and then select "Labor & Employment"
It's A Tall Order Opening A New Hotel
(I've opened several hotels in my career...These are great points...)
Opening a new hotel is no joke. In theory, every effort should be made so no stone is left unturned to ensure operations from front and back of the house are flawless. In practice, perfection is difficult to achieve but a reasonable semblance of it should not be a difficult task
Opening a new hotel is no joke. In theory, every effort should be made so no stone is left unturned to ensure operations from front and back of the house are flawless. In practice, perfection is difficult to achieve but a reasonable semblance of it should not be a difficult task
Travelers Prefer Green Hotels
Not only are green hotels better for the environment, travelers overwhelmingly prefer them. This week Travelocity announced that eco-friendly hotels get higher consumer reviews than their non-green counterparts. To celebrate this, the company has kicked off the It’s Good to Be Green sale with special deals on green hotels that have great reviews.
Travelocity allows consumers to rate its hotels on a scale of 1-5 smiley faces. When the company studied the reviews for green hotels, a fascinating trend emerged. Consumers gave 83 percent of non-green hotels three smiley faces or more--but they gave a whopping 94 percent of green hotels three smiley faces or more. “This data confirms something we’ve long suspected,” says Alison Presley, manager of Travelocity’s Travel for Good® program. “Our eco-friendly hotels care deeply about the entire experience they provide and that attention to detail translates into an awesome stay overall.”
The company has more than 2,000 hotels in its Green Hotel Directory and the company works with an elite group of certification programs to ensure that each hotel in its program is making significant strides in sustainability. Travelocity is the only major online travel company that flags green hotels site-wide with an eco-friendly tag and the company holds the line against “greenwashing” by not accepting “self-certified” hotels. For the It’s Good to Be Green sale, travelers can save up to 30 percent on more than 160 eco-friendly hotels around the world that have an average rating of 3.5 smiley faces or higher.
Travelocity allows consumers to rate its hotels on a scale of 1-5 smiley faces. When the company studied the reviews for green hotels, a fascinating trend emerged. Consumers gave 83 percent of non-green hotels three smiley faces or more--but they gave a whopping 94 percent of green hotels three smiley faces or more. “This data confirms something we’ve long suspected,” says Alison Presley, manager of Travelocity’s Travel for Good® program. “Our eco-friendly hotels care deeply about the entire experience they provide and that attention to detail translates into an awesome stay overall.”
The company has more than 2,000 hotels in its Green Hotel Directory and the company works with an elite group of certification programs to ensure that each hotel in its program is making significant strides in sustainability. Travelocity is the only major online travel company that flags green hotels site-wide with an eco-friendly tag and the company holds the line against “greenwashing” by not accepting “self-certified” hotels. For the It’s Good to Be Green sale, travelers can save up to 30 percent on more than 160 eco-friendly hotels around the world that have an average rating of 3.5 smiley faces or higher.
Record-low U.S. RevPAR of US$53.53 in 2009 | STR
Each of the three key performance metrics, including occupancy, average daily rate and revenue per available room, reported decreases during every month of 2009. RevPAR fell 16.7 percent to US$53.53, the worst decline recorded since STR started tracking the industry in 1987.
Friday, July 9, 2010
HospitalityEducators.com | Born on the Fourth of July!
Not the movie, not the song lyric, but the launch of www.HospitalityEducators.com, a new global resource for the hospitality industry is the celebration. HospitalityEducators.com offers insights and best practices to help individual hoteliers and groups of hotels improve their market penetration, deliver service excellence and increase their profitability.
http://www.hospitalityeducators.com/ differs from other information and membership sites in that it is a consortium of successful corporate and academic professionals, committed to delivering focused and affordable counsel in solving specific challenges facing the hospitality industry.
The members of the consortium collectively have more than 150 years of operational, learning and teaching/educating experience. They will serve a wide spectrum of hospitality businesses, ranging from small family-owned operations to convention centers. This range includes independent hotels and restaurants, boutique hotels, small hospitality brands and associations, management companies, country inns and bed & breakfasts. "Our group is in an exceptional position, in that we can serve independent hoteliers and hospitality businesses of all sizes, and simultaneously support branded companies and properties with a tremendous number of best practices, proven strategies, and support material", said co-founder Dr. John Hogan, principal of HoganHospitality.com.
http://www.hospitalityeducators.com/ differs from other information and membership sites in that it is a consortium of successful corporate and academic professionals, committed to delivering focused and affordable counsel in solving specific challenges facing the hospitality industry.
The members of the consortium collectively have more than 150 years of operational, learning and teaching/educating experience. They will serve a wide spectrum of hospitality businesses, ranging from small family-owned operations to convention centers. This range includes independent hotels and restaurants, boutique hotels, small hospitality brands and associations, management companies, country inns and bed & breakfasts. "Our group is in an exceptional position, in that we can serve independent hoteliers and hospitality businesses of all sizes, and simultaneously support branded companies and properties with a tremendous number of best practices, proven strategies, and support material", said co-founder Dr. John Hogan, principal of HoganHospitality.com.
Thursday, July 8, 2010
Looking at the Box... From Inside and Out
I’ve done a fair bit of traveling the past months, including national industry trade shows, and it’s clear that while the hotel and restaurant industries seem to be, thankfully, in a better position than 18 months ago, there’s still a huge level of uncertainty.
How strong will the recovery be? Is it here to stay, or is there the significant likelihood of a double dip recession? How will continuing uncertainties in economic and financial markets impact the bottom lines of hotel owners and operators in the short term and intermediate term?
We cannot know the answers to these questions with any certainty. But what is clear is that everyone – owners, operators, suppliers and lenders – are looking for an edge that produces optimum profitability in each and every component of a business. That means looking at a hotel in new and different ways, maximizing revenue, resources and expenditures at every turn.
Doing so requires different perspectives and sometimes looking at the box from angles you have never considered before. Here are a few examples to spur some thought.
Stepping Outside the Box
It always amazed me that most hotel owners never consider the fact that at least half of the customers who enter an upscale or luxury hotel never sleep there. They probably never will.
Consider your daily foot traffic – meetings conducted over meals at your restaurants; business and leisure guests who get together to chat in the lobby or bar; local events that utilize your meeting space.
Few of these guests stay overnight, but it is clear that each one forms an opinion of your hotel – its physical features, staff and service. Those opinions build on themselves, become the prevailing marketplace opinion. Before you know it, they quickly become your reputation or your brand in the local marketplace.
It goes without saying that brand reputation has a huge impact on long-term revenues from overnight stays, meetings and events, etc.
Here is a suggestion: Look at your hotel’s public spaces as a retail operation. How do you like to be greeted when you walk into a high end department store or restaurant? Make sure your bellmen, front desk clerks and valets are trained to greet all guests, even those just passing though, in the same way.
What kinds of feelings or emotions induce you to frequent a retail establishment, make a purchase or become a fan of the retail brand? The design and décor in your lobby should aim for many of the same ends.
The location, style and positioning of your restaurant should be an inducement for guests to enter off the sidewalk and sample something special, something new and different – not a bland representation of what some in the industry woefully describe as a “three meal restaurant.” Could there be a less exciting or interesting way to describe a venue that is supposed to provide diners with memorable experiences?
The point is that to really interest guests in your brand and to provide them with an experience that makes them loyal, owners and operators need to look at the hotel through the consumer’s eyes. This means stepping outside one’s comfort zone – separating oneself from Hotel 101 and re-introducing yourself to the basics of consumer marketing.
Production Without Process
On the restaurant side, I am often surprised at how little structured process guides the content, preparation, plating, delivery and clean up.
Can anything consistently be produced without specifications, linear process, quality control, planned cost of goods and labor factors? Why should there be any less detail to every aspect of preparing and serving a meal at a restaurant – which is an inherently more complex, interactive, variable and difficult process.
At Morrissey Hospitality Companies, we have a training manual that literally runs into the thousands of pages, presenting detailed processes for everything from steps involved in preparing and presenting silverware, to
the proper grooming and requisite personal presentation of wait staff, to the location and positioning of food on the table itself. Since demand and consumption are spontaneous, the need for measurable process is even more critical as there are few final checks before the customer begins rating their satisfaction. Details, discipline and measurement are absolute needs in highly variable processes. Failure rates are difficult to monitor after the guest leaves and begins your marketing opportunity or nightmare known as word of mouth. Your staff is your means of production and must be well maintained and monitored if you want your success rate in the 90% or better range. Would you visit a dentist who advertises or accepts that 80% of their treatments are accurate?
The logic is straightforward. Along with rooms and meeting space, a luxury hotel depends on its restaurant to deliver a superior guest experience and to drive revenue. Often, a lack of preparation and process, create a loss leader in what should be a hotel profit center.
Bringing “Outside the Box” Back to the Inside
We often encourage our kids – as I’ve encouraged mine – to get a diversity of experiences in their younger years, studying different subjects in school, traveling to different places and generally widening their comfort zone.
One could make the same sort of recommendation to hotel owners and operators. For example, on the strength of our hotel and restaurant management experience in Minneapolis and Saint Paul, a few years ago we were approached to manage premium catering operations for the new Xcel Energy Center, home of the NHL’s Minnesota Wild.
We jumped at the chance and quickly became the catering manager of the operation. More importantly, we developed skills sets and outside perspectives, which we have translated into the hotel and F&B contexts to our and the guest’s benefit. We learned our four walls are confining; grow your business outside them.
The same kinds of perspectives and skills can be developed in myriad ways; hotel operators, managers and personnel at all levels should be alert to every one of them, and ready to seize opportunities when and where they present themselves.
So go ahead, step outside the box.
You’ll find the atmosphere refreshing – and profitable.
How strong will the recovery be? Is it here to stay, or is there the significant likelihood of a double dip recession? How will continuing uncertainties in economic and financial markets impact the bottom lines of hotel owners and operators in the short term and intermediate term?
We cannot know the answers to these questions with any certainty. But what is clear is that everyone – owners, operators, suppliers and lenders – are looking for an edge that produces optimum profitability in each and every component of a business. That means looking at a hotel in new and different ways, maximizing revenue, resources and expenditures at every turn.
Doing so requires different perspectives and sometimes looking at the box from angles you have never considered before. Here are a few examples to spur some thought.
Stepping Outside the Box
It always amazed me that most hotel owners never consider the fact that at least half of the customers who enter an upscale or luxury hotel never sleep there. They probably never will.
Consider your daily foot traffic – meetings conducted over meals at your restaurants; business and leisure guests who get together to chat in the lobby or bar; local events that utilize your meeting space.
Few of these guests stay overnight, but it is clear that each one forms an opinion of your hotel – its physical features, staff and service. Those opinions build on themselves, become the prevailing marketplace opinion. Before you know it, they quickly become your reputation or your brand in the local marketplace.
It goes without saying that brand reputation has a huge impact on long-term revenues from overnight stays, meetings and events, etc.
Here is a suggestion: Look at your hotel’s public spaces as a retail operation. How do you like to be greeted when you walk into a high end department store or restaurant? Make sure your bellmen, front desk clerks and valets are trained to greet all guests, even those just passing though, in the same way.
What kinds of feelings or emotions induce you to frequent a retail establishment, make a purchase or become a fan of the retail brand? The design and décor in your lobby should aim for many of the same ends.
The location, style and positioning of your restaurant should be an inducement for guests to enter off the sidewalk and sample something special, something new and different – not a bland representation of what some in the industry woefully describe as a “three meal restaurant.” Could there be a less exciting or interesting way to describe a venue that is supposed to provide diners with memorable experiences?
The point is that to really interest guests in your brand and to provide them with an experience that makes them loyal, owners and operators need to look at the hotel through the consumer’s eyes. This means stepping outside one’s comfort zone – separating oneself from Hotel 101 and re-introducing yourself to the basics of consumer marketing.
Production Without Process
On the restaurant side, I am often surprised at how little structured process guides the content, preparation, plating, delivery and clean up.
Can anything consistently be produced without specifications, linear process, quality control, planned cost of goods and labor factors? Why should there be any less detail to every aspect of preparing and serving a meal at a restaurant – which is an inherently more complex, interactive, variable and difficult process.
At Morrissey Hospitality Companies, we have a training manual that literally runs into the thousands of pages, presenting detailed processes for everything from steps involved in preparing and presenting silverware, to
the proper grooming and requisite personal presentation of wait staff, to the location and positioning of food on the table itself. Since demand and consumption are spontaneous, the need for measurable process is even more critical as there are few final checks before the customer begins rating their satisfaction. Details, discipline and measurement are absolute needs in highly variable processes. Failure rates are difficult to monitor after the guest leaves and begins your marketing opportunity or nightmare known as word of mouth. Your staff is your means of production and must be well maintained and monitored if you want your success rate in the 90% or better range. Would you visit a dentist who advertises or accepts that 80% of their treatments are accurate?
The logic is straightforward. Along with rooms and meeting space, a luxury hotel depends on its restaurant to deliver a superior guest experience and to drive revenue. Often, a lack of preparation and process, create a loss leader in what should be a hotel profit center.
Bringing “Outside the Box” Back to the Inside
We often encourage our kids – as I’ve encouraged mine – to get a diversity of experiences in their younger years, studying different subjects in school, traveling to different places and generally widening their comfort zone.
One could make the same sort of recommendation to hotel owners and operators. For example, on the strength of our hotel and restaurant management experience in Minneapolis and Saint Paul, a few years ago we were approached to manage premium catering operations for the new Xcel Energy Center, home of the NHL’s Minnesota Wild.
We jumped at the chance and quickly became the catering manager of the operation. More importantly, we developed skills sets and outside perspectives, which we have translated into the hotel and F&B contexts to our and the guest’s benefit. We learned our four walls are confining; grow your business outside them.
The same kinds of perspectives and skills can be developed in myriad ways; hotel operators, managers and personnel at all levels should be alert to every one of them, and ready to seize opportunities when and where they present themselves.
So go ahead, step outside the box.
You’ll find the atmosphere refreshing – and profitable.
Wednesday, July 7, 2010
A revenue-management road map
Now that hotel executives have realized the importance of revenue management, directors filling that role must focus on a top-level strategy that includes revenue optimization for the entire hotel and all its revenue streams.
“Everybody needs to make sure that they do a revenue strategy. Too many dive into revenue management without thinking big picture, without sitting down and creating a plan. Without a strategic plan, how do we know what we should be doing?” Kathleen Cullen told attendees at the HSMAI Revenue Management & Internet Marketing Strategy Conference last month.
During a breakout session titled “Building Your Own Revenue Management Road Map,” Cullen, who is partner of consulting firm inspire resources, presented findings of her HSMAI-sponsored report, “The Evolving Dynamics of Revenue Management: A comprehensive revenue optimization road map for hotel owners, operators and practitioners.”
What follows are highlights of those findings—a road map for revenue managers to guide them to the next level of revenue generation:
Fostering a RM culture
“The first part is the most important—you have to make sure that everyone understands the culture of revenue management,” Cullen said.
There’s more to revenue management than generating room revenue. The practice now touches nearly every aspect of the hotel. Thus, revenue managers must be in a position in the managerial hierarchy where they can influence key decisions.
For each property, revenue managers should report directly to the GM—not the director of sales and marketing, Cullen said. They should also be part of the executive committee.
“It’s very important this person is responsible for the overall revenues of the hotel, so we need to make sure they’re exposed to the proper conversations,” Cullen said.
Revenue managers should expose others to the proper conversation as well. Successful revenue optimization requires a team approach. Managers must report on their efforts and enlist the help of other key stakeholders through regular and structured meetings.
Understanding the market
“It’s very important to make sure that we understand the market—not just the local market but also overall, the bigger picture. What is it the industry is doing?” Cullen said.
There are four key areas to understand:
1. Internal and external influencers—What is happening in the market? Are there new flags, products or construction?
2. Market trends (industry and local)—How are consumers behaving? Are there any new competitive trends? What about pricing trends?
3. Demand indicators—What are some of the behaviors or events, both positive and negative, that will have a direct impact on business?
4. Competition—What is the competitive set? What are the strengths, weaknesses, opportunities and threats?
Forecasting
Forecasting is a crucial aspect of revenue management that allows managers to implement successful strategies and measure performance, Cullen said.
There are four types of forecasting:
1. Demand
Revenue managers must understand the unconstrained demand for their hotels. In other words, how many reservations could they accept if they had an infinite number of rooms?
Kathleen Cullen, partner, inspire resources
“This is one of the most important forecasts that a hotel should be doing, but it’s one that is done the least,” Cullen said.
2. Strategic
A strategic forecast examines demand within the context of a manager’s strategies. How would current or planned initiatives, for example, impact unconstrained demand?
3. Revenue
The most realistic picture of forecasted performance, this is the forecast commonly in practice today—the one that should be shared with ownership.
4. Operational
Used for operational purposes, this is the “working” forecast used to set day-to-day pricing.
Strategizing pricing
Like any good plan, a revenue-management strategy must be documented in great detail, Cullen said. The strategy should be developed with key stakeholders during the course of a single meeting—or several. The plan then must be communicated to team members, with actionable items assigned to promote accountability.
The plan also should include a detailed pricing strategy, with attention paid to every distribution channel for every customer segment for every product. Some elements managers should consider are: market position, seasonal demand, strategic benchmarking, day-of-the-week demand, customer segmentation, special-needs periods, channel strategies, room costs, price fencing, and education for the sales and reservations teams on the process and approach of selling prices outlined in the revenue strategy.
Revenue managers also should develop a strategy around discounting. While Cullen refrained from advising against the practice in its entirety, she did remind attendees that when a hotel realizes revenue growth through rates, 95 percent flows to the bottom line, and if the growth comes through occupancy, approximately 50 percent flows to the bottom line.
In other words: Use caution. Cullen offered the following considerations:
1. If booking pace is slow, do not assume rate is the problem. It may be something else, in which case a price cut is not the answer.
2. Be sure the sales team, including reservations, is asking good questions about customer needs. Qualifying the customer helps reduce the necessity to discount.
3. Ensure the offer is focused on the value, not the price. Educate the reservations team on making the offer, asking for the sale and overcoming objectives.
4. Make the connection between the product offering and what the customer wants.
5. Be sure to do a break-even analysis. With each discount, how many more reservations do you need to capture to achieve the same revenue goal?
6. Discounting will only create demand when it is tied directly with some type of marketing initiative. What type of marketing plan will be put into place to target and capture the right amount of additional reservations?
7. Why is the competitive set decreasing its rate? Following others’ lead without understand the reason behind it is not a good strategy.
“Everybody needs to make sure that they do a revenue strategy. Too many dive into revenue management without thinking big picture, without sitting down and creating a plan. Without a strategic plan, how do we know what we should be doing?” Kathleen Cullen told attendees at the HSMAI Revenue Management & Internet Marketing Strategy Conference last month.
During a breakout session titled “Building Your Own Revenue Management Road Map,” Cullen, who is partner of consulting firm inspire resources, presented findings of her HSMAI-sponsored report, “The Evolving Dynamics of Revenue Management: A comprehensive revenue optimization road map for hotel owners, operators and practitioners.”
What follows are highlights of those findings—a road map for revenue managers to guide them to the next level of revenue generation:
Fostering a RM culture
“The first part is the most important—you have to make sure that everyone understands the culture of revenue management,” Cullen said.
There’s more to revenue management than generating room revenue. The practice now touches nearly every aspect of the hotel. Thus, revenue managers must be in a position in the managerial hierarchy where they can influence key decisions.
For each property, revenue managers should report directly to the GM—not the director of sales and marketing, Cullen said. They should also be part of the executive committee.
“It’s very important this person is responsible for the overall revenues of the hotel, so we need to make sure they’re exposed to the proper conversations,” Cullen said.
Revenue managers should expose others to the proper conversation as well. Successful revenue optimization requires a team approach. Managers must report on their efforts and enlist the help of other key stakeholders through regular and structured meetings.
Understanding the market
“It’s very important to make sure that we understand the market—not just the local market but also overall, the bigger picture. What is it the industry is doing?” Cullen said.
There are four key areas to understand:
1. Internal and external influencers—What is happening in the market? Are there new flags, products or construction?
2. Market trends (industry and local)—How are consumers behaving? Are there any new competitive trends? What about pricing trends?
3. Demand indicators—What are some of the behaviors or events, both positive and negative, that will have a direct impact on business?
4. Competition—What is the competitive set? What are the strengths, weaknesses, opportunities and threats?
Forecasting
Forecasting is a crucial aspect of revenue management that allows managers to implement successful strategies and measure performance, Cullen said.
There are four types of forecasting:
1. Demand
Revenue managers must understand the unconstrained demand for their hotels. In other words, how many reservations could they accept if they had an infinite number of rooms?
Kathleen Cullen, partner, inspire resources
“This is one of the most important forecasts that a hotel should be doing, but it’s one that is done the least,” Cullen said.
2. Strategic
A strategic forecast examines demand within the context of a manager’s strategies. How would current or planned initiatives, for example, impact unconstrained demand?
3. Revenue
The most realistic picture of forecasted performance, this is the forecast commonly in practice today—the one that should be shared with ownership.
4. Operational
Used for operational purposes, this is the “working” forecast used to set day-to-day pricing.
Strategizing pricing
Like any good plan, a revenue-management strategy must be documented in great detail, Cullen said. The strategy should be developed with key stakeholders during the course of a single meeting—or several. The plan then must be communicated to team members, with actionable items assigned to promote accountability.
The plan also should include a detailed pricing strategy, with attention paid to every distribution channel for every customer segment for every product. Some elements managers should consider are: market position, seasonal demand, strategic benchmarking, day-of-the-week demand, customer segmentation, special-needs periods, channel strategies, room costs, price fencing, and education for the sales and reservations teams on the process and approach of selling prices outlined in the revenue strategy.
Revenue managers also should develop a strategy around discounting. While Cullen refrained from advising against the practice in its entirety, she did remind attendees that when a hotel realizes revenue growth through rates, 95 percent flows to the bottom line, and if the growth comes through occupancy, approximately 50 percent flows to the bottom line.
In other words: Use caution. Cullen offered the following considerations:
1. If booking pace is slow, do not assume rate is the problem. It may be something else, in which case a price cut is not the answer.
2. Be sure the sales team, including reservations, is asking good questions about customer needs. Qualifying the customer helps reduce the necessity to discount.
3. Ensure the offer is focused on the value, not the price. Educate the reservations team on making the offer, asking for the sale and overcoming objectives.
4. Make the connection between the product offering and what the customer wants.
5. Be sure to do a break-even analysis. With each discount, how many more reservations do you need to capture to achieve the same revenue goal?
6. Discounting will only create demand when it is tied directly with some type of marketing initiative. What type of marketing plan will be put into place to target and capture the right amount of additional reservations?
7. Why is the competitive set decreasing its rate? Following others’ lead without understand the reason behind it is not a good strategy.
The Irresistibility of the Obvious | How a new trend in revenue management and metrics is missing the point
The first is profit management, a term for a management practice that focuses on profit generation, not revenue. The second, a metric for the efficacy of “profit management” is GOPPAR, or gross operating profit per available room, something our company has commented on before. Both of these represent variations on a theme, namely that profit, and not revenue, should be the focus of any revenue or yield management strategy. Some analysts have gone so far as to say that profit management ought to replace revenue management in hotels.
This trend is not so disturbing as it is completely mystifying.
Straightforward…but narrow
The fact that the trend is so simple- and so obvious-seeming- is what is driving its repetition, in my opinion. Not that it is particularly innovative, groundbreaking, or effective, mind you… just obvious. There’s a seductiveness to an idea that aligns so perfectly with conventional wisdom; in the end, though, that doesn’t make it right.
Such is the case with GOPPAR and profit management. There is nothing inherently wrong with tailoring a management strategy to maximize profit; in fact, this is the ultimate goal of any management strategy.
But to exclude established metrics and practices in favor of more all-encompassing measures and methods is to lose some valuable nuance. More importantly, some of the theoretical points of “profit management” don’t apply universally, and may not be as effective for many hotels as a traditional revenue management strategy.
Tradition for tradition’s sake?
Far be it from me to defend established practices simply for being established. The only way to be successful in the hotel business is to be an envelope-pusher; for instance, I wholeheartedly believe in leveraging the very latest in revenue management technology and technique to achieve revenue maximization results, and I believe that some conventional revenue management tactics like historical pricing are real barriers to hotels’ success. But there is a reason revenue management and RevPAR have become pillars of the industry. There is a reason a generation of hotel owners and managers have staked their livelihoods to the revenue their properties generate per available room, and to strategies designed to consistently grow this revenue.
And the reason is simple: It works.
The same cannot be said for “profit management”. Take a hypothetical example that would seem to reinforce profit management as a preferred strategy: two hotels have equivalent RevPAR figures, one by posting 84% occupancy at an average daily rate of $87, the other with 78% occupancy at an ADR of $94. The argument is that while the RevPARs remain approximate, the cost of goods sold associated with higher occupancy makes the second scenario preferable from a profit management standpoint. Obvious, right? Makes perfect sense.
This theory misses three important points. One, an $8 increase to average daily rate is likely to have a much greater impact than a 7% decline in occupancy. With the amount of price transparency in a given hotel market, such a rate hike would probably have a much more significant effect on occupancy, nullifying the profit gains earned through the elevated ADR. Second, this calculus does not apply to all classes of hotels equally. To a luxury property, this may hold true, but a majority of hotels encounter a higher degree of price elasticity than luxury properties. Demand falls off much more sharply with rate increases in this segment, a result that is magnified by the instant availability of competitors’ rates provided by online travel agencies and other booking sites.
Third, and this is the mystifying aspect of the profit management trend, is that it actually doesn’t account for many aspects of hotel operations that most owners and operators will recognize as truly important. Yes, in certain situations higher occupancy implies a higher ration of expenses to revenue. But it also guarantees more individual guest impressions of the hotel, which can translate to more future bookings. Higher occupancy also usually correlates to higher ancillary sales, including food and beverage, retail, spa services, in-room F&B, among others. Granted, many ancillary revenue sources carry a higher cost of sales that hotel rooms, but under the right circumstances, the amount a guest might spend on ancillaries could exceed the room rate itself, as we often saw during the recession.
“Profit management”, with its emphasis on ADR, oversimplifies the delicate equilibrium between hoteliers who want to consistently present higher rates (for profit maximization or to position themselves as luxury) and consumers who- at every level- are seeking value. There are, however, both a metric and management that do account for this equilibrium, and when executed at the highest levels, achieve it to great benefit. That metric, of course, is RevPAR, and the management strategy defined as revenue management.
The belief that as occupancy goes up so should rates is a myth that has cost many hotel owners and operators a lot of money. Profit management is a good idea, but it rests too firmly upon this assumption. Revenue management remains the best way to maximize profits for the vast majority of hotels, and RevPAR remains the best measurement for revenue management performance. And to make sure that your property’s revenue management tactics are the most effective ones possible, it is important to continually search for innovation and embrace forward-thinking strategies. Because good revenue management tactics will never be replaced.
It’s just that simple.
This trend is not so disturbing as it is completely mystifying.
Straightforward…but narrow
The fact that the trend is so simple- and so obvious-seeming- is what is driving its repetition, in my opinion. Not that it is particularly innovative, groundbreaking, or effective, mind you… just obvious. There’s a seductiveness to an idea that aligns so perfectly with conventional wisdom; in the end, though, that doesn’t make it right.
Such is the case with GOPPAR and profit management. There is nothing inherently wrong with tailoring a management strategy to maximize profit; in fact, this is the ultimate goal of any management strategy.
But to exclude established metrics and practices in favor of more all-encompassing measures and methods is to lose some valuable nuance. More importantly, some of the theoretical points of “profit management” don’t apply universally, and may not be as effective for many hotels as a traditional revenue management strategy.
Tradition for tradition’s sake?
Far be it from me to defend established practices simply for being established. The only way to be successful in the hotel business is to be an envelope-pusher; for instance, I wholeheartedly believe in leveraging the very latest in revenue management technology and technique to achieve revenue maximization results, and I believe that some conventional revenue management tactics like historical pricing are real barriers to hotels’ success. But there is a reason revenue management and RevPAR have become pillars of the industry. There is a reason a generation of hotel owners and managers have staked their livelihoods to the revenue their properties generate per available room, and to strategies designed to consistently grow this revenue.
And the reason is simple: It works.
The same cannot be said for “profit management”. Take a hypothetical example that would seem to reinforce profit management as a preferred strategy: two hotels have equivalent RevPAR figures, one by posting 84% occupancy at an average daily rate of $87, the other with 78% occupancy at an ADR of $94. The argument is that while the RevPARs remain approximate, the cost of goods sold associated with higher occupancy makes the second scenario preferable from a profit management standpoint. Obvious, right? Makes perfect sense.
This theory misses three important points. One, an $8 increase to average daily rate is likely to have a much greater impact than a 7% decline in occupancy. With the amount of price transparency in a given hotel market, such a rate hike would probably have a much more significant effect on occupancy, nullifying the profit gains earned through the elevated ADR. Second, this calculus does not apply to all classes of hotels equally. To a luxury property, this may hold true, but a majority of hotels encounter a higher degree of price elasticity than luxury properties. Demand falls off much more sharply with rate increases in this segment, a result that is magnified by the instant availability of competitors’ rates provided by online travel agencies and other booking sites.
Third, and this is the mystifying aspect of the profit management trend, is that it actually doesn’t account for many aspects of hotel operations that most owners and operators will recognize as truly important. Yes, in certain situations higher occupancy implies a higher ration of expenses to revenue. But it also guarantees more individual guest impressions of the hotel, which can translate to more future bookings. Higher occupancy also usually correlates to higher ancillary sales, including food and beverage, retail, spa services, in-room F&B, among others. Granted, many ancillary revenue sources carry a higher cost of sales that hotel rooms, but under the right circumstances, the amount a guest might spend on ancillaries could exceed the room rate itself, as we often saw during the recession.
“Profit management”, with its emphasis on ADR, oversimplifies the delicate equilibrium between hoteliers who want to consistently present higher rates (for profit maximization or to position themselves as luxury) and consumers who- at every level- are seeking value. There are, however, both a metric and management that do account for this equilibrium, and when executed at the highest levels, achieve it to great benefit. That metric, of course, is RevPAR, and the management strategy defined as revenue management.
The belief that as occupancy goes up so should rates is a myth that has cost many hotel owners and operators a lot of money. Profit management is a good idea, but it rests too firmly upon this assumption. Revenue management remains the best way to maximize profits for the vast majority of hotels, and RevPAR remains the best measurement for revenue management performance. And to make sure that your property’s revenue management tactics are the most effective ones possible, it is important to continually search for innovation and embrace forward-thinking strategies. Because good revenue management tactics will never be replaced.
It’s just that simple.
Tuesday, July 6, 2010
Hotel housekeepers can lose in 'optional housekeeping' hotel trend
By Barbara De Lollis, USA TODAY
File photo shows housekeeping supervisor Maria Nunez cleans a mirror in the bathroom of one of the rooms at the Westin Kierland Resort & Spa in Phoenix on Tuesday, June 22, 2010. The hotel is among a small but growing group who have taken their in-room CAPTIONBy Michael Schennum, AP Photo/The Arizona RepublicHousekeepers have much to lose as more hotel chains make daily, full-room housekeeping an optional service - and some customers decide they don't want a lengthy cleaning, so Sunday's article by the Province paper of Vancouver caught my eye. The piece looks at Starwood's "Make a Green Choice" optional housekeeping program and its impact on some Toronto housekeepers.
TWITTER: Hotel Check-In
ALSO ONLINE: Stretch your hotel stay to 30 hours
ALSO ONLINE: Arizona hotels subsidize state PR campaign
Starwood last summer rolled out the program at 140 hotels last summer, inviting guests to "conserve natural resources" by declining housekeeping in exchange for loyalty points or vouchers for food and beverages.
Housekeeper Brigida Ruiz - a Sheraton Centre Toronto attendant for 18 years - tells the paper that reducing daily room cleaning isn't as green as people might think. After guests opt out of daily room cleaning, she says that giving the room a proper cleaning when the guest checks out takes more time, electricity, water and cleaning chemicals.
"Can you imagine how a room gets after one week without cleaning service?" Ruiz tells the paper. "It's dirty, filthy. Really stinky."
The towels alone are "like a mountain," and since the rooms take longer to clean, workers are forced to rush the job in order to meet their daily quota, the article says. Guests are officially allowed to go three consecutive days without a room cleaning, but guests sometimes go without for longer periods, the piece says.
The optional housekeeping program also has implications for housekeepers that extend beyond how hard they need to work. If 45 rooms opt out of housekeeping in a day, three housekeepers lose shifts, the story says.
"This has been a real problem for housekeepers for the hotels," Michelle Travis of Unite Here Local 40 tells the paper. The union chapter represents 8,000 hotel workers in British Columbia.
The Sheraton Centre Toronto hotel, meanwhile, defended the program to the paper, saying that it helps the hotel save energy and reduce water and chemical use. About 5% of the Westin Bayshore hotel's customers opt to participate in "Make a Green Choice," vs. 8% companywide, the hotel spokesman told the paper.
The conversation about the new housekeeping trend extends beyond one hotel.
Speaking to bigger picture, Rachel Dodds, associate professor of hospitality at Ryerson University in Toronto, told the paper that hotels should be commended for trying to reduce their environmental footprint. After all, she said, hotels are just behind hospitals as the most wasteful and consumptive buildings - and yet, there is a social impact that's not being considered by hotels. She sees it as the latest example of a travel industry trend in reducing services offered to consumers in exchange for lower costs.
Last week, I asked hotel consultant Michael Juell, a 30-year hospitality veteran who has run hotel housekeeping departments, to share some of his insights on the topic.
Hotels, he said, today a typical, mid-priced hotel will budget about $40 to clean a single hotel room - outside of New York City, the USA's most expensive market. The actual price will depend on other factors including the hotel's location, room size, bed linens and furniture, housekeeper wages and labor union representation, he said. Housekeepers are expected to clean between about 17 and 19 rooms per day, Juell says.
File photo shows housekeeping supervisor Maria Nunez cleans a mirror in the bathroom of one of the rooms at the Westin Kierland Resort & Spa in Phoenix on Tuesday, June 22, 2010. The hotel is among a small but growing group who have taken their in-room CAPTIONBy Michael Schennum, AP Photo/The Arizona RepublicHousekeepers have much to lose as more hotel chains make daily, full-room housekeeping an optional service - and some customers decide they don't want a lengthy cleaning, so Sunday's article by the Province paper of Vancouver caught my eye. The piece looks at Starwood's "Make a Green Choice" optional housekeeping program and its impact on some Toronto housekeepers.
TWITTER: Hotel Check-In
ALSO ONLINE: Stretch your hotel stay to 30 hours
ALSO ONLINE: Arizona hotels subsidize state PR campaign
Starwood last summer rolled out the program at 140 hotels last summer, inviting guests to "conserve natural resources" by declining housekeeping in exchange for loyalty points or vouchers for food and beverages.
Housekeeper Brigida Ruiz - a Sheraton Centre Toronto attendant for 18 years - tells the paper that reducing daily room cleaning isn't as green as people might think. After guests opt out of daily room cleaning, she says that giving the room a proper cleaning when the guest checks out takes more time, electricity, water and cleaning chemicals.
"Can you imagine how a room gets after one week without cleaning service?" Ruiz tells the paper. "It's dirty, filthy. Really stinky."
The towels alone are "like a mountain," and since the rooms take longer to clean, workers are forced to rush the job in order to meet their daily quota, the article says. Guests are officially allowed to go three consecutive days without a room cleaning, but guests sometimes go without for longer periods, the piece says.
The optional housekeeping program also has implications for housekeepers that extend beyond how hard they need to work. If 45 rooms opt out of housekeeping in a day, three housekeepers lose shifts, the story says.
"This has been a real problem for housekeepers for the hotels," Michelle Travis of Unite Here Local 40 tells the paper. The union chapter represents 8,000 hotel workers in British Columbia.
The Sheraton Centre Toronto hotel, meanwhile, defended the program to the paper, saying that it helps the hotel save energy and reduce water and chemical use. About 5% of the Westin Bayshore hotel's customers opt to participate in "Make a Green Choice," vs. 8% companywide, the hotel spokesman told the paper.
The conversation about the new housekeeping trend extends beyond one hotel.
Speaking to bigger picture, Rachel Dodds, associate professor of hospitality at Ryerson University in Toronto, told the paper that hotels should be commended for trying to reduce their environmental footprint. After all, she said, hotels are just behind hospitals as the most wasteful and consumptive buildings - and yet, there is a social impact that's not being considered by hotels. She sees it as the latest example of a travel industry trend in reducing services offered to consumers in exchange for lower costs.
Last week, I asked hotel consultant Michael Juell, a 30-year hospitality veteran who has run hotel housekeeping departments, to share some of his insights on the topic.
Hotels, he said, today a typical, mid-priced hotel will budget about $40 to clean a single hotel room - outside of New York City, the USA's most expensive market. The actual price will depend on other factors including the hotel's location, room size, bed linens and furniture, housekeeper wages and labor union representation, he said. Housekeepers are expected to clean between about 17 and 19 rooms per day, Juell says.
Saturday, July 3, 2010
Revenue management and the role of technology
Their goal is to help the hotel yield the most important amount of profit.
What's so different about your hotel, then?
Some can rely on their location, or the building, or history. But what if your hotel has none of that?
One way of capturing the interests of your guest or prospects is to imagine your perfect guest sharing some of the same passions, values or interests as you. It's a lot easier to sell something you have an interest in, you are passionate about or that’s important to you. If you don’t love what you do, or feel it’s important, it will show. It will be very hard for you to deliver a good service if you are dealing with people with whom you share no values, interests or enthusiasm.
Anyone who knows me will know that I love my garden, and love visiting other gardens. So if it was my hotel an obvious target market would be other garden lovers. This would not only allow me to attract guests who share my interest and passions, it provides a theme, which can be built on. Such as - sharing knowledge of local historical or famous gardens, forming joint ventures with a local plant nursery, garden designer, gardening author, manufacturer of garden products, or market gardener (or all of these); designing menus planned around locally grown produce. I could tie in with any specific gardening events happening locally, such as RHS flower shows, Gardeners’ Question Time, etc. Or host my own Gardeners’ Question Time calling upon local gardening celebrities. I might include talks from experts, transport and free entry to a number of local gardens of interest (maybe as exclusive guests of the owner). You get the idea……
To take another example, Hotel TerraVina in the New Forest, where Nina and Gérard Bassett used Gérard's knowledge and passion for wine - Gérard is the only person in the world to hold the combined titles of Master of Wine, Master Sommelier, Wine MBA and, as of April 2010, World's Best Sommelier. (And I am very honoured to be interviewing Nina and Gérard as part of my tele seminar series running from 5th - 16th July - How to Give Your Hotel a Competitive Edge.) As a result Hotel TerraVina attracts both hotel guests and restaurant diners who have an interest in wine, and Gérard is happy as he has an opportunity to cater for people who are interested in what he's offering. By employing others who share this interest and knowledge Nina and Gérard are able to be consistent. And all this provides them with great PR opportunities.
One way of capturing the interests of your guest or prospects is to imagine your perfect guest sharing some of the same passions, values or interests as you. It's a lot easier to sell something you have an interest in, you are passionate about or that’s important to you. If you don’t love what you do, or feel it’s important, it will show. It will be very hard for you to deliver a good service if you are dealing with people with whom you share no values, interests or enthusiasm.
Anyone who knows me will know that I love my garden, and love visiting other gardens. So if it was my hotel an obvious target market would be other garden lovers. This would not only allow me to attract guests who share my interest and passions, it provides a theme, which can be built on. Such as - sharing knowledge of local historical or famous gardens, forming joint ventures with a local plant nursery, garden designer, gardening author, manufacturer of garden products, or market gardener (or all of these); designing menus planned around locally grown produce. I could tie in with any specific gardening events happening locally, such as RHS flower shows, Gardeners’ Question Time, etc. Or host my own Gardeners’ Question Time calling upon local gardening celebrities. I might include talks from experts, transport and free entry to a number of local gardens of interest (maybe as exclusive guests of the owner). You get the idea……
To take another example, Hotel TerraVina in the New Forest, where Nina and Gérard Bassett used Gérard's knowledge and passion for wine - Gérard is the only person in the world to hold the combined titles of Master of Wine, Master Sommelier, Wine MBA and, as of April 2010, World's Best Sommelier. (And I am very honoured to be interviewing Nina and Gérard as part of my tele seminar series running from 5th - 16th July - How to Give Your Hotel a Competitive Edge.) As a result Hotel TerraVina attracts both hotel guests and restaurant diners who have an interest in wine, and Gérard is happy as he has an opportunity to cater for people who are interested in what he's offering. By employing others who share this interest and knowledge Nina and Gérard are able to be consistent. And all this provides them with great PR opportunities.
A Hotel Checklist for the Leisure Market
Back in golden times, I frequently took spontaneous trips to recharge my batteries, even if only for the weekend. My favourite spots were Las Vegas, Aruba, or cruising the Caribbean. I did all three at least once every year between 2000 and 2008. I’ve done none of them since.
This isn’t for lack of marketing efforts from the destinations and cruise companies. I’m blasted with email and even snail mail solicitations daily, all with genuinely fantastic deals if I’d just pick up the phone or click the “commit” button online. There was a time when I would have been all over these, but like most of us, I’m more cautious with the indulgences today. I may occasionally see an offer I can’t refuse and jump on it, but I no longer make the effort to search for specific dates or a destination. If you want my business, you’re going to have to come and find me for it.
Based on what I’ve witnessed in the hotel industry, my change in leisure buying habits reflects that of the general population. It isn’t enough to put together a great offer and trust that it will be found on the hotel’s website. To attract today’s leisure traveler, you have to put together compelling offers (note the plural), and spoon feed them to prospective buyers using any and all means necessary. You can have by far the best deal in your marketplace. It won’t do anything if you expect the buyers to find it on their own. They no longer have to bother actively searching for the deals.
If your hotel has found itself struggling in the war for leisure business, consider the following strategies organized by timeframe of impact.
Always and Forever: It doesn’t matter what the market conditions are, independent hotels must remain focused on the following at all times.
•Search Engine Optimization (SEO): Independent hotels need to have their marketing teams all over this. There is a wide array of services available to assist and if starting from zero, any number of online classes to get you going. Attracting leisure travel is a wired game, print ads and promotions with a limited audience will get you limited results.
•Website Optimization: Where are your compelling offers so enticing I absolutely must check into them? Maximizing SEO may get buyers to your site, but you have only seconds to grab their attention and keep them there. If your marketing platform has been built on understated elegance, you may want to consider an overhaul. Spoon feed your audience. Make it as easy as possible for leisure travel to see the offers you have available.
•Direct Booking Incentives: Wish your leisure business would book directly with the hotel instead of through expensive OTAs or other channels? Of course! Have an offer in place to incent buyers to book directly on your website? Maybe. Telling anyone about it? Something front and center on your website highlighting why buyers should book directly on your site rather than checking other channels is critical to reducing your distribution costs over time and building customer loyalty. At the very least, if the rates on your website are as good or better than you are offering through any other public channel, say so! Just because you know you guarantee the best rates doesn’t mean Joe Vacationer is aware he doesn’t need to waste time checking around. If you are able to toss in an added perk that can’t be attained through booking the same rate on another website, do so. Hotels may not have the marketing dollars of the big OTAs, but you can still educate the customers that they can’t go wrong by booking directly on your site.
•Take Another Look: Is your hotel pet friendly? Check out participation on the major pet friendly hotel websites. And don’t forget to include any relevant information (e.g. required deposits) on your HOD and all OTA descriptions. Are you targeting gay travel? Try joining the International Gay and Lesbian Travel Association (IGLTA) which not only gives you marketing opportunities but also exposure on the gay destination pages of major OTAs. In short, keeping your hotel information up to date through existing channels is just as critical as locating new ones.
Budgeting Timeframe: If your market is expecting big gains within the next 12 – 18 months, skip this section. It will take up to six months before you see measurable returns and by that time you may not need it.
•Wholesale: They’re baaaack. They never actually left, but you may have forgotten about them during the good times or decided they weren’t the effort. This channel is not limited to senior travellers, and moreover has specialized to the point where you can target specific markets and find wholesalers that can help you gain share in a hurry. There are still the drawbacks of block allocations and largely manual reservations processes, but the big wholesalers that dominate the majority of the share are well worth talking to.
•Consortia: In the past ten years many hotels opted out of giving discounted rates to consortia, but you may want to snoop around within your comp set to see if anyone has begun wooing back consortia business. An easy place to start is the Radius Travel website. Go to www.radiushotels.com/DVLogin.asp, enter any company name you like, enter your location and you will find a list of all hotels in the marketplace participating in Radius’ Global Hotel Program along with the rates they contracted for the current year. Bear in mind your competitors may revise their offers within the year to come in below their contracted agreement. If you subscribe to Travelclick’s Hotelligence report, you can get a quick idea of how much business the various consortia are putting into your market.
•Loyalty Rewards Program: If your branded competitors are buying your business with their popular loyalty rewards programs, you may now be able to fight back. Stash Hotel Rewards was launched in May and is quickly enrolling an impressive portfolio of luxury independent hotels who are working together to provide independent travelers with a competitive points program. Developed by self-described “OTA refugees”, Stash’s objective is to steal share back from OTAs by issuing loyalty rewards in a manner similar to the big brands, but those points aren’t available if the room is purchased through an OTA. Check out www.stashrewards.com for more info.
•Premium Room Types: I know, I know, your front desk is all over it and you’ve never lost the opportunity to upsell at check-in. But have you done the analysis to ensure your premium room categories are achieving the same or higher RevPAR than your base categories? Often they aren’t, because they run at significantly lower occupancy or frequently end up being used for free upgrades instead of revenue generating upsells. One solution is NOR1 and its E-standby Upgrade Program (www.nor1.com/?page=upgrade) that offers guests the option to pre-purchase an upgrade at a discounted rate if the room category is available at check in. Similar products are in development, check with your distribution provider to see if they have a standby upgrade program in the works before making any commitments.
Short Term Fixes: These may boost revenues for the immediate future but should not be tackled without long term plans in place to ensure you don’t become dependent on them forever. These are “give a man a fish” strategies. They can definitely help but are not going to be your long term solution.
•Private Sales: Checked out jetsetter.com or vacationist.com lately? I have. And so have millions of other buyers in that demographic we all drool over. Just because they’re high income doesn’t mean they’ll buy your rack rate without a thought. The best way to introduce your product to a huge base of wealthy travelers in a hurry is participation in a private sale.
•OTAs: Discussed to death? Sure. But when it comes to marketing, they have it all over their product suppliers. Because of their costly margins and high maintenance requirements, they shouldn’t be your first choice but they are certainly the fastest fix if emergency measures are required to increase share. You may want to work with your OTA market managers to maximize sales through promotions while working on your longer term solutions. Once you’re firing on all cylinders, you’ll be able to trim back the promos and get the majority of your share gains from other sources.
Bottom Line: The days of building it and they will come are over, at least for now. Although leisure travel is beginning to rebound, the buying habits have changed. Focus at least as much attention to how you’re going to get the offer in front of the buyer as to what you’re putting in it.
This isn’t for lack of marketing efforts from the destinations and cruise companies. I’m blasted with email and even snail mail solicitations daily, all with genuinely fantastic deals if I’d just pick up the phone or click the “commit” button online. There was a time when I would have been all over these, but like most of us, I’m more cautious with the indulgences today. I may occasionally see an offer I can’t refuse and jump on it, but I no longer make the effort to search for specific dates or a destination. If you want my business, you’re going to have to come and find me for it.
Based on what I’ve witnessed in the hotel industry, my change in leisure buying habits reflects that of the general population. It isn’t enough to put together a great offer and trust that it will be found on the hotel’s website. To attract today’s leisure traveler, you have to put together compelling offers (note the plural), and spoon feed them to prospective buyers using any and all means necessary. You can have by far the best deal in your marketplace. It won’t do anything if you expect the buyers to find it on their own. They no longer have to bother actively searching for the deals.
If your hotel has found itself struggling in the war for leisure business, consider the following strategies organized by timeframe of impact.
Always and Forever: It doesn’t matter what the market conditions are, independent hotels must remain focused on the following at all times.
•Search Engine Optimization (SEO): Independent hotels need to have their marketing teams all over this. There is a wide array of services available to assist and if starting from zero, any number of online classes to get you going. Attracting leisure travel is a wired game, print ads and promotions with a limited audience will get you limited results.
•Website Optimization: Where are your compelling offers so enticing I absolutely must check into them? Maximizing SEO may get buyers to your site, but you have only seconds to grab their attention and keep them there. If your marketing platform has been built on understated elegance, you may want to consider an overhaul. Spoon feed your audience. Make it as easy as possible for leisure travel to see the offers you have available.
•Direct Booking Incentives: Wish your leisure business would book directly with the hotel instead of through expensive OTAs or other channels? Of course! Have an offer in place to incent buyers to book directly on your website? Maybe. Telling anyone about it? Something front and center on your website highlighting why buyers should book directly on your site rather than checking other channels is critical to reducing your distribution costs over time and building customer loyalty. At the very least, if the rates on your website are as good or better than you are offering through any other public channel, say so! Just because you know you guarantee the best rates doesn’t mean Joe Vacationer is aware he doesn’t need to waste time checking around. If you are able to toss in an added perk that can’t be attained through booking the same rate on another website, do so. Hotels may not have the marketing dollars of the big OTAs, but you can still educate the customers that they can’t go wrong by booking directly on your site.
•Take Another Look: Is your hotel pet friendly? Check out participation on the major pet friendly hotel websites. And don’t forget to include any relevant information (e.g. required deposits) on your HOD and all OTA descriptions. Are you targeting gay travel? Try joining the International Gay and Lesbian Travel Association (IGLTA) which not only gives you marketing opportunities but also exposure on the gay destination pages of major OTAs. In short, keeping your hotel information up to date through existing channels is just as critical as locating new ones.
Budgeting Timeframe: If your market is expecting big gains within the next 12 – 18 months, skip this section. It will take up to six months before you see measurable returns and by that time you may not need it.
•Wholesale: They’re baaaack. They never actually left, but you may have forgotten about them during the good times or decided they weren’t the effort. This channel is not limited to senior travellers, and moreover has specialized to the point where you can target specific markets and find wholesalers that can help you gain share in a hurry. There are still the drawbacks of block allocations and largely manual reservations processes, but the big wholesalers that dominate the majority of the share are well worth talking to.
•Consortia: In the past ten years many hotels opted out of giving discounted rates to consortia, but you may want to snoop around within your comp set to see if anyone has begun wooing back consortia business. An easy place to start is the Radius Travel website. Go to www.radiushotels.com/DVLogin.asp, enter any company name you like, enter your location and you will find a list of all hotels in the marketplace participating in Radius’ Global Hotel Program along with the rates they contracted for the current year. Bear in mind your competitors may revise their offers within the year to come in below their contracted agreement. If you subscribe to Travelclick’s Hotelligence report, you can get a quick idea of how much business the various consortia are putting into your market.
•Loyalty Rewards Program: If your branded competitors are buying your business with their popular loyalty rewards programs, you may now be able to fight back. Stash Hotel Rewards was launched in May and is quickly enrolling an impressive portfolio of luxury independent hotels who are working together to provide independent travelers with a competitive points program. Developed by self-described “OTA refugees”, Stash’s objective is to steal share back from OTAs by issuing loyalty rewards in a manner similar to the big brands, but those points aren’t available if the room is purchased through an OTA. Check out www.stashrewards.com for more info.
•Premium Room Types: I know, I know, your front desk is all over it and you’ve never lost the opportunity to upsell at check-in. But have you done the analysis to ensure your premium room categories are achieving the same or higher RevPAR than your base categories? Often they aren’t, because they run at significantly lower occupancy or frequently end up being used for free upgrades instead of revenue generating upsells. One solution is NOR1 and its E-standby Upgrade Program (www.nor1.com/?page=upgrade) that offers guests the option to pre-purchase an upgrade at a discounted rate if the room category is available at check in. Similar products are in development, check with your distribution provider to see if they have a standby upgrade program in the works before making any commitments.
Short Term Fixes: These may boost revenues for the immediate future but should not be tackled without long term plans in place to ensure you don’t become dependent on them forever. These are “give a man a fish” strategies. They can definitely help but are not going to be your long term solution.
•Private Sales: Checked out jetsetter.com or vacationist.com lately? I have. And so have millions of other buyers in that demographic we all drool over. Just because they’re high income doesn’t mean they’ll buy your rack rate without a thought. The best way to introduce your product to a huge base of wealthy travelers in a hurry is participation in a private sale.
•OTAs: Discussed to death? Sure. But when it comes to marketing, they have it all over their product suppliers. Because of their costly margins and high maintenance requirements, they shouldn’t be your first choice but they are certainly the fastest fix if emergency measures are required to increase share. You may want to work with your OTA market managers to maximize sales through promotions while working on your longer term solutions. Once you’re firing on all cylinders, you’ll be able to trim back the promos and get the majority of your share gains from other sources.
Bottom Line: The days of building it and they will come are over, at least for now. Although leisure travel is beginning to rebound, the buying habits have changed. Focus at least as much attention to how you’re going to get the offer in front of the buyer as to what you’re putting in it.
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