“Discipline” and Best practices in hotel’s revenue and sales & marketing activities(GA 2012)
(Self-evaluation Checklist & Suggestions)
Value Drivers Management: All employees must have a clear understanding of what drives customers to use/return to the hotel. This could be; location, brand, product, facilities, service, pricing, competition, restaurants, banquets, parking, technology, reputation, fast & efficient response to customers’ needs, long serving employees, etc.
Revenue Culture: Manage by Revenue and not by expenses-cost cuttings. The whole management team must fully understand how difficult is to attract and retain a customer. (Each Excom and Department Head are assigned accounts to provide support and working together with the account sales manager responsible for the account)
Manage for Value: Value is what customers want and expect. Must understand this in full and provide it. Remember that the consumer has become less indulgent and much more in control.
Customer Centric: The customer is to be the center of the attention and of whatever the hotel does in term of attracting & retaining customers and delivering experience.
Measurable Data: All data must be measured i.e. Budget, month-season, previous year, competition, performance, market share, fair share business, cancellations, no show, length of stay, source of business, type of business, etc.
Goals & Targets: Have to be aggressive but achievable. In principle, the annual RevPAR growth should not be less than the competitive set growth.
RevPAR or RevPAC: Revenue per available room or revenue per available customer? What’s better for the hotel? (or GOPPAR? Gross operating profit per available room?)
Retaining a guest: It is a common knowledge that it costs as much as 10 times more to attract new business in the hotel vs. retain an existing guest/account. Repeat customers are easier to cultivate than new guests. Make sure you don’t forget to capture as much information as you can for each guest. Expand your database to know why they visited and what they did (conference, spa, golf, meals, room type, etc.). Then, maintain a relationship with your past guests, encouraging them to revisit by appealing to their interests.
Customer Relationship Management (CRM): A strong and caring program must be in place and practiced by all in the hotel.
Revenue Strategy Team: Hotels should have a Revenue Strategy Team consisting of Revenue Director/Manager, GM, DOSM, Director of Room, Director of F&B and FC with objective to review, assess and set strategies & action plans to maximize revenue opportunities. Meet on weekly basis. Hotel GM has to drive this.
Daily Revenue Meeting: Daily Revenue Meeting between GM, Director of Revenue, DOSM/and FO manager to review previous day, current and next three days revenue performance, strategies and action plans must take place every morning plus the GM is to assure that a similar session also takes place on weekends by duty officers (Note that this meeting is separate from the traditional Morning Operation Meeting).
Market Segmentations and Definitions: Must be clearly defined, understood by all and properly managed. (Manage the segments otherwise the hotel manages you...)
Market Mix: Must maintain a well balanced mix and of type of business and source. Very dangerous to rely too much in one single market or segment. “Rule of Thumb”; should not exceed 1/3 of total revenue from one market – source – segment.
Markets & Geographical Trends: Anticipate & quickly respond to changing source of business, potential’s of markets and spending power and trends/demands.
Competitive Set: Management must know how the hotel performs against its key competitors. In the competitive set there should be 5-6 direct competitors, half global Brands and half regional/local Brands. Use an outside consultant i.e. STR Global to measure competitive performance/market share report. (Normally the competitive set is approved by Owner and Corporate). Important to assess how the hotel market share position performed the last 3 years, this year forecast and next year target.
Database: It is imperative to develop an efficient Database System and maintain “Clean and updated records” at all times. This is fundamental for customer recognition programs. All data entry for marketing (e.g. market segment) and guest profiles must be audited for accuracy before the system is shut down for up-date every night.
Rate Integrity: Hotel must be recognized in the market place as practicing room rate integrity and rate trenchancy at all times. There must be a logical reason for every price point set that’s understood by the buyer and seller. Maintain prices and don’t discount rates as the arrival date approaches nor increase as the occupancy reaches high levels.
Rate Parity: Hotel must be consistent with all rates quoted/posted to all public distribution channels in no circumstances can price be controlled by others.
Hotel Website: Content should be reviewed and up-dated every month. Information should not be complicated, but be easy to navigate and to make bookings. Make your web “sing” and ensure that it works effectively. Use creative programs to drive links.
Inventory Control: The hotel must retain full control of the inventory at all times. In no circumstances can inventories be manipulated by others.
Search Engines: Whilst Corporate Office will make all efforts possible to ensure that search engine is optimized as much as possible, hotels must ensure that the right keywords, meta tags and content are updated weekly i.e. images, latest promotions, press/media releases, etc.
Mobile Marketing: Whilst Corporate Office will ensure that mobile applications are fully functional and efficient, hotels must conduct ‘test sell’ to ensure that room inventory and rates are updated and set correctly.
Conversion Rate Optimization: Helps marketers understand how effective their calls-to-action are on a Website.
Stagnant Rates (Dynamic Rates): Avoid stagnant rates at all cost, update as often as possible in many instances once a day is not nearly often enough. Dynamic rates are the only way to fully capitalize on the revenue-earning opportunity offered by the online channel.
Replenish your inventory online: Especially during busy seasons-periods. Update and manage the inventory at all times taking into consideration profitability and demand on each channel
Make it easy for the customer: Easy on making bookings, easy check-in & check-out, easy to locate and operate equipments, easy to ask & receive services.
Booking Conversion: System in place to record lost business and efficiency of process by ensuring that “turndown” reports are analyzed at each weekly revenue strategy meetings taking into account demand and non-demand turndowns.
Packaging: Create interesting packages to reinforce business during low periods and ensure that all Divisions in the hotel are involved in promoting them.
Cost of Distribution: Understand in full the cost/s involved.
Rate of the Day: How is managed? How often changed? (Hourly if necessary)
Forecasting: Very important (must) forecast for the following month, next 3 months, year-end and establish a 12 months rolling forecast. The hotel must be proactive at all times.
Paid Suites Occupancy: Aware of the many upgrade, discount, and of the actual suites paid occupancy? (same applies for club floors). Forced upgrades must be controlled and analyzed daily.
Seasonality: Clearly define the seasonality of the destination, set and manage pricing according to the season and demand.
Room Types: Don’t confuse customers with so many options. For OTA’s 3-4 options is sufficient and stick with basic (Standard, Deluxe, Club, Suite) while for the hotel booking website there may be need of couple more rooms type giving opportunity to upgrade with objective to increase bookings through the hotel website.
OTA’s: Create win-win situations, and balanced agreements. Must control the volume from this source and manage commission and never offer customers a lower rate through the OTA’s. Also note that the minute you wean yourself off OTAs, the better. Surely, they provide a quick fill but they drive your rate down ideally and do nothing to generate loyalty to your product. For example, one OTA deal promises a 5-star property at a 3-star price. Think about it for a moment: They are commoditizing all the work it took you to get to 5-stars relegating you to an equal with others at that level.
Loyalty Programs: As customers expects recognition, it is critical to have this in place to create repeat business. Front office and reservation staff must be fully familiar with the corporate loyalty program and benefits.
Repeat Business-Guests: Is this monitored, measured and promoted? How your hotel compares with the competitive set in percentage of repeat business? And in which segment?
Commissions: Always pay on time based on agreement-contract.
Marketing Plan and Director of Marketing Manual: Importance of monthly update and actions. Use this manual for all monthly reports, statistics and action plans.
Special Days: Mark your calendar in advance. Plan every holiday with precision. Unlike every other promotional program that you create, these “no brainer” events deserve your full attention. If you’re not full, shame on you! You have the power and the knowledge. Just do it. No excuses for missing Mother’s Day, Valentine’s Day, National Day, Christmas/New Year, etc.
Power of Advertising: The best way to find you is through your website. Advertise its presence, Create meaningful advertising campaigns that combine eye-catching imagery with calls to action. And remember to measure the campaign, not just the individual ad.
Social Media: Don’t just pay lip service to Facebook, Twitter, YouTube and others. Invest in appropriate programs to harness the energy of these outlets and fully integrate them into your marketing programs and brand strategy.
Weekdays-Weekends Potentials: Depending upon your property’s location, this typically means that business groups take precedence over leisure travel. Now examine your Sales & Marketing plan spending. Is this really accurately reflected? Also respond to the needs-demands of Weekdays vs. Weekends and price accordingly.
Company RSO’s & GSA’s: Those are to be treated as your best customers as they provide business for the hotel. Visit them as much as possible, maintain an open communication and very important to respond to their business leads/requests immediately.
Local City Potentials: Invest in your local neighbourhood. Hire and train. Promote and motivate. Donate and participate. Give back and tell everyone about it. It pays to be a friend and a community leader. Treat everyone as family, and they will return in kind.
Food, Glorious Food: Of course you have a spa, and you might have a beach or golf course, too. But, at best, a fifth of people regularly visit spas, with lower numbers for golf (resorts). However, I can guarantee you that in all type of hotels, your guests eat. Make it your business to ensure they eat with you. Create menus and venues that give your guests what they want. Incentivize them with room and food packages if need be. (A well-defined “Food & Beverage plan” covering concepts, quality, pricing, offerings, promotion, tactical advertising, etc. is to be developed and updated regularly-yearly).
Catering-Banquets-Conferences: In many Asian Hotels, the Food & Beverage revenue represents 30%-45% of the total hotel revenue and normally a good percentage of this comes from the Catering Division. Important that all Catering sales activities and control of the “Catering book” comes directly under the Hotel Director of Sales & Marketing. While the overall strategy of the hotel is to become the center of the social activities in the area it operates, strict discipline is to be implemented and followed on the blocking & confirming of catering-banquet spaces; best practices are that in principle all function rooms are to be sold in conjunction with guest rooms. Importance of conferences vs. social and proper deadlines to be set and respected. As an example, avoid blocking the best space for a mid-week social function (wedding) one year out & longer as the space can be sold to a conference with guest rooms.
Marketing: Marketing needs to start the minute your guest interacts with you. Once you have a reservation, start your engines! Remember the importance of initial experiences. A welcome packet on check-in beats a myriad of tent cards.
TripAdvisor: Encourage your guests to leave reviews on TripAdvisor and in other similar travel review portals. Manage your online reputation. Your profile on the hotel and travel review website needs to be active and dynamic. Also very important to respond to comments/reviews. Remember that millions refer to TripAdvisor and please do not post fake reviews.
Tourist Office & Convention Bureau: Maintain a positive relation with the local tourism office and find out how they can help you to promote your hotel and sell the services. You should be on top of the tourist office and convention list for group requests and for conferences and visitors.
Regional and National Press: PR has and will always be important to reach your domestic market. Make sure you build and maintain a good relationship with journalists and editors. Be on top of their list to provide travel related stories.
Cultivating Trust: Trust with customers and trust with employees. Remember that trust and engagement breed success.
Incentives / Upsell Program: Highly recommend for guest contacts and employees. Set aggressive but achievable targets and pay incentives on time.
Director of Revenue Time Allocation: “Rule of Thumb” 80% on functions/activities related to strategies & revenue optimization and 20% on administrative tasks.