| By Jay Delerno, September 2001
Have you ever heard the expression "If you can�t raise the bridge lower the river"? Well, if you have been in the hospitality industry as long as I have, you have heard it more than once when someone wanted you to increase profitability. The expression is used to convey the need to improve profitability either through increasing revenues or lowering expenses. More often than not, departmental profits in the hospitality industry are increased by pursuing one or the other of these directives but not both simultaneously on the same line item. However, with the advent of Internet Based Training (IBT), the opportunity to �raise the bridge� while at the same time �lowering the river� is possible. We will begin by pointing out the advantages of IBT when compared to on-site or classroom style training. Next we will review the cost associated with the two different delivery methods. We will examine the return on investment (ROI) which can be achieved and also demonstrate that training, in particular IBT, can be cost justified. In conclusion we will examine two examples IBT, a reservations training workshop for participants delivered via the Internet, and the implementation, by WorldRes.com, of an Internet based tutorial for their clients. Classroom versus IBT In the classroom environment all participants must be available at a predetermined date and time and in a specific location. This places a burden on management to cover the positions that would normally be manned by the training participants. In most instances, the time required to deliver the training is predetermined regardless of the ability of the participant to grasp and understand the material. The result is the training moves too quickly for some and too slowly for others. IBT, in an asynchronous format, is available twenty-four hours a day, seven days a week to all participants. Therefore, the need to remove participants from their normally scheduled shifts for hours, or even days, is eliminated. Participants can be given access to IBT before, during, or after their regularly scheduled shifts. Participants can learn new material in small digestible pieces rather than being force-fed large amounts of new material. The participants are able to learn at their own pace whenever and wherever access to the Internet is available. IBT is consistent and never varies, what one participant experiences is the same as what every other participant experiences. In a classroom instructor led setting, the delivery of training will vary according to the instructor and their abilities. Studies have shown that interactive IBT can improve learning by increasing retention by as much as sixty percent. Now that we have reviewed some of the features and benefits of Internet Based Training, let's answer the question, �What's in it for me?" and discuss some of the finical benefits. Participant Training On-site training for a hotel reservations department will include such costs as the instructor's travel expenses, sustenance while at the hotel and the cost of the training course itself. The total cost can range from $6,000 to more than $10,000 for two or three days of training. This scenario for on-site delivery assumes that only the instructor will incur travel expenses. If the course will be taught in a cluster format, all of the participants will incur travel expenses with the exception of the participants from the host hotel. Because the on-site training is a one-time event, and the turnover rate in the front office/reservations area is approximately fifty percent annually, additional money will need to be spent in the future if new hires are to be trained. Internet delivery of a reservations training program is being done for less than fifty percent of the on-site training cost .� and it�s available to participants for 365 days. When we examine the ROI for an Internet based reservations training workshop we find that the additional profits can be exceptional, even when using the most conservative estimates. For the sake of this exercise we�ll use a hotel in a suburban location that attracts predominately individual corporate travelers. The hotel's individual traveler average rate is $70.00 and the average length of stay is 1.5 nights. This would mean that for every additional reservation request that was converted to a reservation, the hotel would receive $105 in new revenue. If the hotel's rooms department profit was 75%, the additional realized rooms profit would be approximately $78.75. If we now estimate, as a result of the training, that just one additional reservation request will be converted per day, the new revenues would be $38,325 per year and the additional rooms profit would be $28,744 per year. This additional rooms profit represents a return on investment of almost ten times the cost of an Internet based reservations training workshop costing $245 per month. Quality assurance shopping reports of untrained reservations and front desk staffs show that in over half of the calls, the potential guest is not even asked if they want to make the reservation. Training will help to insure that every call received will, at a minimum, be asked to make the reservation. One additional reservation per day is a very conservative estimate.
Should you not be convinced that an opportunity exists for the hotel to
convert more reservations, consider one additional thought. If approximately
thirty percent of a hotel's occupied rooms are generated by a franchise
reservations system, and twenty percent of it's occupied rooms are generated
by the group sales department, the remaining fifty percent of occupied
rooms are generated by the front desk and reservations department at the
hotel.
Let us now consider the training challenge presented by WorldRes.com. The challenge was to educate their new clients how to enter their property's rates and inventory information into the WorldRes.com system. Enrollment specialists had been assisting the new client hotels over the telephone in order to facilitate the enrollment process. With both the enrollment specialist and the property contact simultaneously accessing the sample database, and conversing over the telephone, the enrollment specialist would walk the property contact through the test database so that the contact could become familiar with the system and the required information. The time to accomplish this initial tour and overview was, on average approximately ninety minutes. The contact was then provided with the access information for their property's database and was on their own to enter their information. WorldRes.com assistance was available at any time via the phone or e-mail should the property need assistance. This time consuming process severely limited the number of new properties that an enrollment specialist could assist on a given day. As the backlog of new clients needing to have their properties' information entered into the system became larger, the issue of how to alleviate the situation became paramount. The solution was provided through Internet Based Training. A tutorial was created that addressed both existing and new clients. Existing clients could refer to the tutorial when it came time to update their rates, inventory and package information. The new WorldRes.com clients used the tutorial to learn about the intricacies of the system and also to enroll their hotel and enter their hotel's information. The result was quicker and easier enrollment of new clients which, in turn, resulted in faster revenue realizations not only for WorldRes.com but also for the new clients. Another significant benefit of the online tutorial was in the area of cost reduction due to a reduced dependence on the enrollment and help desk staffs. The reservations training example demonstrates that new revenues and profits can be created at a lower cost by delivering training over the Internet. The ROI for this training becomes even more significant when consideration is given to the very conservative additional reservations to be converted. The WorldRes.com example demonstrates how IBT can be used to create new revenues more quickly while at the same time reducing cost and providing new services to your clients. In short, IBT does afford the opportunity to simultaneously �Raise the Bridge and Lower the River�.
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