Carol Verret Consulting 
and Training
Consulting
Training Seminars
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Disconnect -- Aligning the
Revenue Management and
Sales Strategies
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by Carol Verret, May 2005

It became apparent at a recent Revenue Management conference that not only is there a "disconnect" between the sales department and revenue management but at times, it manifests in outright frustration.

I was the "token" sales person at the conference. Following my presentation on Sales and the Revenue Management Strategy, it became apparent that I had touched a nerve -- that not all was well in the relationship between Revenue Management and Sales. However, the Revenue Managers in attendance expressed a sincere desire to bridge this disconnect.

The Revenue Managers' frustration stemmed from a perception that sales only wants to sell "discounted" rates at inappropriate times, doesn't understand and/or support the revenue management strategy and is primarily concerned with their "bonus" or incentives versus the revenue of the entire hotel. YIKES!

While I believe that this is not a universal sentiment -- it was sufficiently pervasive to prompt this article. The role of revenue management and the sales function should be complimentary -- the two strategies interlocking like pieces of a jigsaw puzzle. I was surprised that in so many cases this is not happening.

There are several areas of "dis-connectivity" that can be identified:

Inappropriate Discounting. It is easy to forget that until the last perhaps twelve months, the industry was pulling out of a deep recession characterized by decreased demand and heavy discounting by hotels in an effort to stimulate demand that wasn't there. This is a mind-set that is difficult to change when it has been SOP (standard operating procedure) since 9/11, almost four years ago. Couple this with meeting and travel planners who were dealing with drastically reduced travel budgets and hammering sales people to give them their best rate. As ADRs increase, those same planners are again "hammering" sales for the best deal they can cut. Discounting the rate is an easy sale to make -- building value into a rate and presenting it as a "good deal" takes a skill set where many sales people haven't been trained.
 
Bonuses and Incentives. It is easy to make a bonus when demand is high by discounting groups. It is much more difficult during periods of low demand when even discounting probably won't stimulate additional bookings. The issue however, isn't totally the sales department's fault -- it is a question of how management has structured the incentives and bonus plan. A bonus and/or incentive plan that is weighted in favor of rewarding bookings in periods of low demand and less lucrative during high demand periods can offset this issue.
 
Driving Revenue Across Multiple Profit Centers. This is a specialty that sales brings to the revenue management strategy. Hypothetically, midweek is the high demand period for higher rated corporate transient business but is slow for social and other catering functions and may be the slowest time for the spa. By discounting the room rate a few dollars, a group may bring high catering and food and beverage revenue as well as utilization of the spa during slow periods.
 
Interface of Sales and Catering Bookings and Revenue Management Strategy. Most sales and catering programs now have the revenue management metrics built into their sales and catering contact management programs. However, the potential always exists to "override" the system. It helps if the sales and catering system interfaces with the PMS system and the RM system as the evaluation can be made in "real time" rather than when the metrics were entered, perhaps months before.
 
Building and Maintaining Relationships. As most of us know, every relationship is built upon the ability to give and take -- even when it is not always convenient! This is no less true in relationships with clients than it is in personal relationships. Sales brings the strength of profitable client relationships to revenue management strategy. However, there are times when valued clients ask for special favors that may not always be in sync with the revenue management strategy. This can be a test of the relationship between revenue management and sales -- sometimes each department needs to trust that what the other department is doing is in the best interest of the hotel.
 
There is much more that can be said about this issue and much dialogue that should take place between both departments and management. These conflicts are resolvable with training, imagination and bonus structures so that each department is rewarded in the same way -- based upon the total revenue of the hotel.  



CVCT, Carol Verret Consulting and Training, offers consulting and seminars on incorporating and using e-tools to enhance productivity and functionality as well as revenue management and customer service. Our associate, Tony D'Angelo, specializes in HR consulting and seminars.

Carol Verret, in association with HotelTraining.com has an online sales training module that deals with New Business Development and developing client profiles by market segment.

Contact Carol at carol@carolverret.com and log onto the company web site www.carolverret.com. The company can be reached by phone at (303) 618-4065. Log on for info about live web casts and online training modules that also address these issues.

copyright © Carol Verret, 2002-2003 -2004 -2005


 
Contact:
Carol Verret, Consulting and Training
Carol Verret
5910 S. University #C-18, PMB 374
Greenwood Village, CO 80121
Telephone: (303) 618-4065
carol@carolverret.com
Web Site: http://www.carolverret.com/
Email: carol@carolverret.com
Also See: Independent Hotels & Resorts; Ride the Wave or Float with the Tide? / Carol Verret / March 2005
Hospitality Sales Training Companies Reach Across the Competitive Playing Field to Combine Live Seminar Expertise with  the Convenience of the Internet / Carol Verret / January 2005
Revenue Management - The Challenge for Hotel Sales / Carol Verret / January 2005
Hotel Sales Departments -- Issues in Processes and Functionality / Carol Verret / November 2004
The GM'S Role in Revenue Management / Carol Verret / October 2004
Transforming the Hotel Sales Organization; Alignment with the New Realities of Sales / Carol Verret / August 2004
The Revenue Management Strategy - The Pre-Plan Marketing Plan / Carol Verret / July 2004
Hotel Revenue Management this Summer - a Game of Skill, Art and Most of All Nerves / Carol Verett / May 2004
What Do Meeting Planners Want? Hotel Sales Managers Want to Know! / Carol Verret / May 2004
Revenue Management -- The Integration of Revenue Drivers / Carol Verret / March 2004
CYBER SALES -- Hotel Sales in an Internet World is the New Reality / Carol Verret / February 2004
The New Realities of Hotel Sales - Focus on Revenue Generation / Carol Verret / January 2004
Hotel Sales -- Innovation in the Face of Limitations / Carol Verret / November 2003
The Good News & the Bad News; Improving Economy = New Hotel Development / Carol Verret / October 2003
Leadership - General Managers Managing the Sales Process / Carol Verret  / October 2003
When the Crystal Ball is Cloudy; Marketing Plans for 2004 / Carol Verret / July 2003
Partnership of Sales and Technology; Using Tech Tools to "Sell" the Hotels / Carol Verret  / July 2003
Back to the Basics? The Basics of Hotel Sales Have Changed! / May 2003
Creating Sales "HUNTERS": The Skill Sets Required in the New Hotel Sales Environment / April 2003
Heightened Security Requires New Strategies in Hotels Sales / Carol Verret Consulting and Training / Mar 2003
Revenue Recovery - Building The ‘A’ Team in Sales / Carol Verret / January 2003
Contingency Marketing Plan – War In Iraq! / Carol Verret / November 2002
Playing the Rate Game - Positioning -- Positioning -- Positioning! / Carol Verret / October 2002
The Rate Game - Playing to Win / Carol Verret / October 2002
The Challenge of Marketing Independent Boutique Hotels / Carol Verett / August 2002
Hotel Sales in a Limited Service Environment - The Rules Have Changed / Carol Verett / August 2002
The General Manager’s Role in Sales -Chief Marketing Officer of the Hotel / Carol Verret / April 2002
100% Market Share Penetration is Not Good Enough / Carol Verett / January 2002
The Key to REVPAR Recovery –  New Business Development / Carol Verett / December  2001
Trash the 2002 Marketing Plan - And Just Start Over / Carol Verett / September 2001
How to Use Consultants Effectively –  A View From the Other Side  / Carol Verret / August 2001
How Soft Is Your Hotel's Economic Landing?  / Carol Verret / Aprl 2001
The ‘Value Proposition’: Marketing Yourself to Prospective Employees / Carol Verret / January 2001
Generation Y:  Motivating and Training a New Generation of Employees / Carol Verret / November  2000
Why Customer Service Seminars Don't Work / Carol Verret / October 2000
Creating a Culture of Customer Service / Carol Verret Consulting and Training / Sept 2000 
FAT, DUMB AND HAPPY – The Seasonal Boom and  Bust Cycle / Carol Verret / August 2000
Surf's Up - Ride the Wave or Miss the Boat -The Effective Use of Technology in Hotel Sales / Carol Verret / July 2000 
Measuring Effectiveness of  Hotel Sales Departments / Carol Verret / June 2000
Hotel Sales Training - The Need for Immediate Results / Carol Verret/ May 2000



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