Chapter 10 Sales Marketing Hotel Operations Management 1e

Chapter 10: Sales & Marketing Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Roles of Sales & Marketing Sales Marketing Activities related directly to servicing consumer demand & booking clients Activities designed to increase consumer awareness & demand by promoting & advertising hotel Roles of Director of Sales & Marketing Identify and cultivate clients Manage hotel’s marketing efforts Set rates to maximize Rev. Par Negotiate sales contracts on behalf of hotel Serve as a leader to hotel’s sales & marketing team The Front Office Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Roles of Sales & Marketing: In the Hotel Front office Influence Transient rooms Sales & Marketing Influence Group sale Tasks of Sales & Marketing staff with their group sales focus Planning hotel’s sales and marketing strategy Preparing and issuing sales contracts in timely manner Maintaining accurate sales records, forecast and histories Coordinating and communicating special client requests with affected hotel departments Hosting clients during their stay Conducting site tours Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Roles of Sales & Marketing: In the Community Two sales opportunities Promotion opportunities When DOSM and Sales team are active members of the business community (e. g. , local Chamber of Commerce), disseminating info about hotel’s products and services is allowed. Networking opportunities Development of personal relationships for business -related purposes will result in increased numbers of sales calls. - Convention and Visitors Bureau Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Segmentation of the Sales & Marketing Dept. Segmentation based on: By product(s) sold product designations becoming sales specialty areas By market (market segment) type of guests (clients) who buy the product By distribution network “how” the hotel’s sales (products) are made (distributed) Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Segmentation of the Sales & Marketing Dept. Catered event Group guest rooms Conferences By product sold Meetings Conventions Weddings and special events Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Segmentation of the Sales & Marketing Dept. Corporate Business travelers (who pay highest room rates) Leisure Vacations, weddings, visits by friends and family, or non-work related reasons Heavy reliance on travel By market agents’ advice (market segmentation) SMERF & Others Long-term stay Guaranteed occupancy, ease of cleaning their rooms, relatively uncomplicated billing Rooms often sold at very low daily rates Hotel Operations Management, 1/e Hayes/Ninemeier Social, military, educational, religious, or fraternal organizations © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Segmentation of the Sales & Marketing Dept. Meeting planners Travel agents Representative of corporations, groups and organizations Using comparison-shopping techniques By Influence on hotel’s reputation distribution Retailers, wholesalers or both Using Global Distribution System Receiving commission (5 – 20 %) from hotel networking Consortia Largest customers of many hotels Negotiated rate / blackout dates / pick-up Internet Fastest growing distribution channel Creating homepages and linking them to other sites Drop-ins Potential guest who arrives at hotel without an appointment Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Sales Efforts Sales & marketing committee Harmonizes efforts across department lines Engages in long-term planning Ensures cooperation of all in sales and marketing process Hotel Operations Management, 1/e Hayes/Ninemeier Trace systems Maintain record (e. g. , demographic data) of hotel’s past, current and prospective clients Help department maintain its sales records, meet deadlines, and plan future activities © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Sales Efforts The sales cycle Pre-sale phase Invite client to a site tour Submit a bid Sales phase Complete “Request for Proposal” and submit on time Establish room rates Prepare group contract (attrition and cancellation policy) Forward Direct Bill application to Group Establish group block Detail client’s contracted requirements Monitor client’s block Attend pre-event sales meeting of hotel staff Post sale phase Write thank you note to each group Review the final bill Include that group in the hotel’s preferred client database File all written reports Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Sales Efforts Sales lead – effective DOSM should discuss the followings: New leads uncovered since last meeting Realistic sales potential of these leads Who in the department is following up on leads How leads will be pursued What, if anything, G. M. can do to help cultivate prospect Any sales resulting from leads discussed previously Reserve adequate time for cold calling! Make a sales visit / presentation to potential client without having previously set an appointment to do so Visit / call quality prospective clients for hotel’s rooms / services Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Sales Efforts Client appreciation activities Goals Solidify business relationship with current clients (allow hotel to express gratitude to clients for current business) Communicate to potential clients the seriousness with which the hotel views the hotel / client relationship Hotel Operations Management, 1/e Hayes/Ninemeier Examples Gala client appreciation event Golfing, sporting events, concerts, theater tickets Gift giving © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Sales Efforts Marketing plan development: format of marketing plan A review of market competition Occupancy trends /ADR trends / performance of own hotel Competitive analysis of your competitor Strengths / weaknesses / price structure Competitive analysis of your own hotel Strengths / weaknesses / price structure Forecast of future market conditions Estimated market growth or contraction / performance goals and objectives for own hotel / timeline for achieving these goals and objectives Determination of specific marketing strategies & activities Advertising / public relations / promotions Preparation of a marketing budget Development of measurement & evaluation tools Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Sales Efforts Advertising Types of advertising Exterior signage In-hotel and in-room signage and materials Radio or television commercials Direct mailing Internet banners E-mail message Yellow pages Franchiser-supplied advertising vehicles (directories, co-ops, etc. ) Billboards Personal contact Hotel Operations Management, 1/e Hayes/Ninemeier Effective advertising Eye or ear catching Memorable Sell the hotel’s features Cost effective Does not become quickly outdated Reflect positively on hotel’s image Can be easily directed to the hotel’s core client groups © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Sales Efforts Promotion Publicity Public Relations (PR) “Special” packaging of products or services Promoted and disseminated by advertising and publicity Information about hotel, media-distributed free of charge Costs the hotel nothing May be either good or bad Activities ensuring hotel has a positive public image (good citizen of the community) Hosting charity events, contributing cash or in-kind services, donation of hotel staff time for worthy cause Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Internet Sales & Marketing Online reservation system Teaming of GDS with Internet Impact Travel agents: check availability, compare prices and book hotel on-line Online booking sites are fastest growing source of reservations in hotel industry Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Sales & Marketing Activities: Websites Effective hotel websites should: be easy to navigate. have some level of interactivity. be linked to appropriate companion sites (demand generator). allow for online booking. balance guest privacy needs with hotel’s desire to build a customer base. update and revise room rates easily on the website. include a virtual tour of the property. complement other marketing efforts. be in language(s) of potential clients. have website address easy to remember. Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Internet Sales & Marketing : E-mail Systems Traditional communication methods Direct mailing, telephone, fax Emerging communication methods E-mail system Advantages of e-mail systems Inexpensive to send to many current and potential clients. Has attachment feature function to move documents quickly. Automatically updates user database Can disseminate special rate, promotion, new hotel feature to its client list The Front Office Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Evaluating Sales & Marketing Department: Pace Report Pace report Is a document summarizing confirmed (group) sales made by Sales and Marketing dept. Can be prepared based on number of rooms sold, value (in dollars) of sales made, or both Can also include any period of time in the future Tells hotel’s owner and management the potential sales volume generated by Sales and Marketing department However, does not indicate what actual sales volume should be (STAR report does!) Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Evaluating Sales & Marketing Department: Sample Pace Report Waldo Hotel Group Rooms Pace Report for January, 200 x Sold this month Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 25 450 550 650 875 1, 100 1, 350 1, 700 500 300 850 200 Total 8, 550 Hotel Operations Management, 1/e Hayes/Ninemeier Total sold YTD Sold same month last year Total sold last YTD 750 1, 550 1, 175 1, 400 2, 250 2, 900 700 800 1, 150 550 150 250 330 550 650 800 1, 100 1, 500 750 550 300 125 550 1, 250 1, 350 1, 050 1, 700 2, 150 1, 900 1, 750 1, 050 600 225 14, 775 7, 055 13, 575 © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Evaluating Sales & Marketing Department: The Smith Travel Accommodations Report (STAR) STAR working process and preparation Hotel voluntarily submits financial data to Smith maintains confidentiality of all individual hotel data Combine operating data submitted by selected competitors An individual hotel’s operating performance is compared to that of its competitive set (understanding the competitive set is key component of understanding STAR!) Who are the STAR interest groups? Hotel owners, management companies, property management, franchisers, appraisers, financial community Hotel Operations Management, 1/e Hayes/Ninemeier © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458

Evaluating Sales & Marketing Department: The Smith Travel Accommodations Report (STAR) Operating comparison criteria Goals Hotel Operations Management, 1/e Hayes/Ninemeier Occupancy, ADR, Rev. Par, market share, historical trends, to-date performance, state or region Assess performance of Sales & Marketing department as well as the entire property Know the strength of hotel and Sales and Marketing staff’s sales results, in comparison with selected competitors. © 2004 Pearson Education Pearson Prentice Hall Upper Saddle River, NJ 07458