News for the Hospitality Executive
|Lessons from the Field
A Common Sense Approach to Success in the Hospitality Industry
|By Dr. John Hogan, CHA MHS CHE, August 4, 2009|
Hotel Common Sense –
Effective Sales Management: Short and Long-term Planning,
Forecasting, and Expense Budgeting
Part 1 of 2
|By Dr. John Hogan, CHE CHA MHS, August 4, 2009
When managers make decisions, they think forward and backward whether they know it or not. Thinking backward means looking for patterns, linking events, and searching for metaphors that explain causes and effects. Thinking forward entails weighing variables, making calculations, and preparing alternative plans. You will think backward well if you use more than one metaphor to describe a situation, resist the temptation to infer a cause from just one clue, and sometimes look for unexpected causes to explain effects…………. 1
“In complex situations, we may rely too heavily on planning and forecasting and underestimate the importance of random factors in the environment. That reliance can also lead to delusions of control.In uncertain economies such as we are facing globally today, performing long-term budget planning is often viewed as a luxury, rather than as an essential business practice. In almost every kind of economy, however, the need to anticipate financial boundaries is essential to ongoing business success. We need to know where we are going and why, be it to greater successes or to overcoming challenges.
Understanding and monitoring the inflow and outflow of cash must be a top priority for every hospitality business owner, operations manager and sales team member. Many sales teams are not given enough information on the overall business cycles and needs to allow them to be as engaged and effective as possible. Planning ahead for seasonal fluctuations and unexpected emergencies allows for dealing with challenges and at least partially reduces stress.
In a down economy, the potential for a shortfall in business resulting in diminished cash flow is of real concern. The ability to deal with this underperformance in advance will definitely help address the challenge.
The need for thoughtful and responsive planning is more significant than ever and the quote from Einhorn says it all – it takes conscientious efforts to address the situation and begin to turn the state of affairs around.
This 2 part series is very direct and applies common sense in approach.
It's not enough these days to hire a salesperson and say: "Get out there and sell." As an industry and in each particular hospitality business, we must work to do a better job communicating, developing, training, motivating, planning, organizing, directing and controlling. This applies to both people and process.
Engage in these sales guiding principles when soliciting/booking business and servicing existing accounts:
1. Mapping out Your Sales Plan
A. Acquire and use good selling knowledge. There are a series of fundamental questions that are essential for long term success. These include details on finding out who your customers are:
Another fundamental is Attentiveness To Selling Costs. In any business, spending more than you take in, of course, is dangerous. Cost effectiveness in selling for a hotel is very important. As total sales expenditures start to creep up, you must continue to expect a greater return from your sales effort. Budgeting for sales and monitoring the sales budget against results are essential. This means pricing properly, including the costs for loyalty programs and measuring the effectiveness of special advertising or marketing efforts.
B. Plan A Good Market Mix. Which there are clear differences in markets, there are also overlapping ones, such as a corporate client today that may be a vacationer tomorrow or their company might have extended stay needs that your hotel can serve. It is extremely difficult to be all things to all people all the time, which means knowing your proper customer base. While one does not want to turn away potential revenue or clients , understanding the mix of business reflects how much of what type of business you're doing.
Look at your records and daily reports and assess the following: What percentage of my total room sales comes
Now assuming you do have the above information and after you review the past 3-6 months to accurately see trends, what decisions do you need to make in your selling activities? What mix of business would be most profitable? Which mix can you actually obtain? What changes need to be made in your selling activities?
C. Innovate - try something new. Remember: most successful entrepreneurs would not be where they are today if they didn't take a chance and try new things. Come up with fresh ideas to promote business and don't be afraid to put them into action.
Hillel J. Einhorn, whose quote was in the opening section, was not a hotelier but a scholar who researched how managers made decisions. Occupancy and rate continue to stagnate in many locations globally, yet we must address both the specific and random factors Einhorn mentioned.
A. Know Your Competition and specifically your direct competitors.
I continue to read and hear more than one brand CEO warn that there
are “going to be more empty rooms at the hotel across the street from you
and they are going to be scouting your customers.” The current heavily
debated discounting by some brands globally is another challenge to be
addressed, but this is a personal battle fought at individual locations.
B. Research and qualify your multiple price policy. Selective discounting has its place in our industry. Hotels have been doing it for years, with special off-season, corporate, group, senior citizen and military rates, among others.
1 Harvard Business Publishing Decision Making: Going Forward
in Reverse by Hillel J. Einhorn, Robin M. Hogarth
I was invited by Lorman Education Services to offer a teleconference on this topic and they have agreed to offer a $50 discount for any of my readers that mention discount code Z7745121 when they register online.
Feel free to share an idea for a column at email@example.com
anytime or contact me regarding consulting, customized workshops, speaking
Autographed copies of LESSONS FROM THE FIELD – a COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES can be obtained from THE ROOMS CHRONICLE www.roomschronicle.com and other industry sources.
All rights reserved by John Hogan and this column may be included in an upcoming book on hotel management. The opinions expressed in this article are those of the author and do not necessarily reflect the views of this publication
John Hogan, a career hotelier and educator, is frequently invited to participate at franchise meetings, management company and hospitality association industry events. He is a successful senior executive with a record of accomplishment in leading hospitality industry organizations at multiple levels, with demonstrated competencies as a strong leader, relationship builder, problem solver and mentor. He conducts mystery-shopping reviews of quality in operations and marketing, including repositioning of hotels.
Expertise and Research Interest
He writes weekly columns for a number of global online services and has published more than 400 articles & columns on the hotel industry. He co-authored (with Howard Feiertag, CHA CMP) LESSONS FROM THE FIELD – a COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES, which is available from firstname.lastname@example.org, ROOMS CHRONICLE www.roomschronicle.com and other industry sources. He resides in Phoenix, Arizona and expects to publish in 2009 his 2nd book based on his dissertation – The Top 100 People of All Time Who Most Dramatically Affected the Hotel Industry.
Hogan’s professional experience includes over 35 years in hotel operations, food & beverage, sales & marketing, training, management development and asset management on both a single and multi-property basis, including service as Senior Vice President of Operations in a specialty hotel brand for six years.
He holds a number of industry certifications (CHA, CHE, MHS, ACI) and is a past recipient of the American Hotel & Lodging Association’s Pearson Award for Excellence in Lodging Journalism, as well as operational and marketing awards from international brands. He has served as President of both city and state hotel associations.
John’s background includes teaching college level courses as an adjunct professor at three different colleges and universities over a 20-year period, while managing with Sheraton, Hilton, Omni and independent hotels. He was the principal in an independent training & consulting group for more than 12 years serving associations, management groups, convention & visitors’ bureaus, academic institutions and as an expert witness. He joined Best Western International in spring of 2000, where over the next 8 years he created and developed a blended learning system as the Director of Education & Cultural Diversity for the world’s largest hotel chain.
He has served on several industry boards that deal with education and/or cultural diversity and as brand liaison to the NAACP and the Asian American Hotel Owners’ Association with his long-term involvement in the Certified Hotel Owner program. He has conducted an estimated 3,200 workshops and classes in his career.
Service to the Industry and Hospitality Education includes
working with the Educational Institute Certification Commission of the
AH&LA, the Hospitality Industry Diversity Institute, the AH&LA
Multicultural Advisory Council, the Accreditation Commission for Programs
in Hospitality Administration, the Commission for Accreditation on Hospitality
Management Programs, the AH&LA and AAHOA Education and Training Committees,
the Council of Hotel, Restaurant and Institutional Educators (CHRIE), the
International Hotel Show and the Certified Hotel Owner program for the
Asian American Hotel Owners’ Association.
Dr. John Hogan, CHA MHS CHE
|Also See:||Hotel Common Sense -Recognizing There is More than One Approach to Ongoing Success in Building Revenues / Dr John Hogan / July 2009|
|Hotel Common Sense – A New Look at Awards and Recognition / Dr John Hogan / July 2009|
|Lessons on Brands and Discounting / Dr John Hogan / July 2009|
|Hotel Common Sense Using Business Social Networks Productively / Dr John Hogan / July 2009|
|A Common Sense Review Process for Capital Investments / Dr John Hogan / July 2009|
|Understanding Values: The Challenge to Identify and Keep Them During Tough Economic Times / Dr John Hogan / June 2009|
|Personal Stories of Delivering Hospitality and Pride / Dr John Hogan / June 2009|
|What is Your Definition of Leadership? / Dr John Hogan / June 2009|
|Examining Why Do We Really Do What We Do? / Dr John Hogan / June 2009|
|Delivering Hospitality and Pride / Dr John Hogan / May 2009|
|Act As if You Are Number Two / Dr John Hogan / May 2009|
|A Baker’s Dozen of Fundamentals for Retaining Quality Staff / Dr John Hogan / May 2009|
|Customer Relationship Management Requires a Blending of High Tech and High Touch for Optimal Results / Dr John Hogan / May 2009|
|Do You Know Where Your Customer Is? Or Knowing Where Your Business Originates / Dr John Hogan / April 2009|
|Understanding what we measure and making it count! Strategies for Hotel Controllers / Dr John Hogan / April 2009|
|“A Bakers Dozen” of Strategies for Hotel Controllers / Dr John Hogan / April 2009|
|A Different Appraisal of Our Biggest Challenges in 2009 / Dr John Hogan / April 2009|
|Reflections: Mentors and Friends - Vermont Hoteliers Borden and Louise Avery and their Son Allen / Dr John Hogan / March 2009|
|Remember to Embrace the Essentials in Sales; Revenue and net profits can often depend on how one of the most fundamental practices in sales- how incoming phone calls are handled / Dr. John Hogan / March 2009|
|Getting the Most Out of Your Hotel Franchise Investment; Working With Your Hotel Franchisor for Everyone’s Success / Dr. John Hogan / March 2009|
|Getting the Most Out of Your Hotel Franchise Investment; Evaluating the franchise business model as a potential franchisee / Dr. John Hogan / March 2009|
|Getting the Most Out of Your Hotel Franchise Investment / Dr. John Hogan / Dr. John Hogan / March 2009|
|Four Steps: How to Make More Sales Calls than Any Other Way Or Trade Shows Can Be Invaluable If. . . / Dr. John Hogan / February 2009|
|A Baker’s Dozen of Strategies for Hotel Chief Engineers / Dr. John Hogan / February 2009|
|"A Baker's Dozen" of Strategies for Hotel Banquet Managers / Dr. John Hogan / February 2009|
|Making New Year's Sales and Marketing Resolutions Real and Practical / Dr. John Hogan / January 2009|
|Planning in a Challenging Economy - Probing Hotel Expenses / Dr. John Hogan / December 2008|
|Planning in a Challenging Economy - Fundamentals of Hotel Sales Planning / Dr. John Hogan / December 2008|
|A Message for Hoteliers: Giving Thanks - and Not Just One Day Each Year! / Dr John Hogan / November 2008|
|Hoteliers Must Remember the Lessons of Reasonable Care! / John Hogan / November 2008|
|Enthusiastic and Sincere Attitudes Will Pay Off For Hotel Salespeople / Hotel Common Sense / John Hogan / November 2008|
|Unleash the Potential! Recognize the True Value of Your Front Line Sales People / Hotel Common Sense / John Hogan / November 2008|
|Defining Hospitality - Readers Respond with their Insights / Hotel Common Sense / John Hogan / October 2008|
|Understanding the Value and Power of Breakfast / Hotel Common Sense / John Hogan / October 2008|
|A Bakers Dozen of Strategies for Hotel Restaurant Managers / Hotel Common Sense / John Hogan / October 2008|
|A Bakers Dozen of Strategies for Hotel Food and Beverage Directors / Hotel Common Sense / John Hoganv/ September 2008|
|My Definition of Hospitality. What’s Yours? / Dr. John Hogan / September 2008|
|Principles for Success as a Hotel Manager: 6 Observations on Finding and Employing Problem Solvers / Dr. John Hogan / September 2008|
|10 Hotel Sales Action Steps to Succeed in Today’s Competitive Marketplace / Dr. John Hogan / September 2008|
|10 Hotel Sales Mistakes to Avoid in Today’s Competitive Marketplace / Dr. John Hogan / August 2008|
|Ways to Identify and Build Repeat Guests / Dr John Hogan / August 2008|
|Principles for Success As a Hotel Manager - Maintaining Relationships Throughout the Organization / Dr John Hogan / August 2008|
|Principles for Success As a Hotel Manager - Part four: Communicating with Clarity and Candor / Dr. John Hogan / July 2008|
|Principles for Success As a Hotel Manager - Part three: Using your management style effectively / Dr. John Hogan / July 2008|
|Principles for Success As a Hotel Manager - Part Two: Motivating the Team / Dr. John Hogan / July 2008|
|Principles for Success As a Hotel Manager Part One: Understanding the Organization / Dr. John Hogan / July 2008|
|Updating Hotel Marketing and Sales Strategies Mid Year NOW Is Essential / Dr. John Hogan / June 2008|
|Don’t Underestimate the Impact of the Hotel Sales Office / Dr. John Hogan / June 2008|
|Factors for Successful Interviewing Potential Hotel Sales Candidates / Dr. John Hogan / June 2008|
|The Importance of Meaningful Sales Team Job Descriptions / Dr. John Hogan / May 2008|
|For Hotels with Limited Service, Fewer than 100 Rooms - How Do You Determine if You Need a Person Dedicated to Selling / Dr. John Hogan / May 2008|
|Extending Your Sales Team or Make Travel Agents A Regular Part of Your Sales Programs / Dr. John Hogan / May 2008|
|Finding Business Leads Can Be Easier Than You Think / Dr. John Hogan / May 2008|
|Understanding the Differences Between Marketing and Sales / Dr. John Hogan / April 2008|
|Identifying Your Customers / Lessons from the Field A Common Sense Approach to Success in the Hospitality Industry / Dr. John Hogan / April 2008|