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. . Market Analysis and Sales Office Audit � Look Beyond the Obvious in Turnaround Situations . |
June 29, 2010 - One of the first targets for analyzing the potential for a distressed hotel to �turn around� is the sales department and the related market reports. While this is absolutely correct, it is important to look beyond the conclusions to the basis of the data to ensure that it is not skewing the performance of the hotel and the sales department. Reporting mechanisms always carry with them implicit assumptions about the data to measure. Audits usually follow a specific check list and the verification of the items on the check lists may not tell the entire story about how the property is being marketed and its position in the comp set. For example, I was sent into a market to analyze and make recommendations on acquiring a distressed property for a franchise conversion and the potential for a turnaround. As I was combing through the report and data furnished by one of the large accounting firms, it was indicating that this was a distressed market � overbuilt with primarily economy product that produced declining ADRs and deteriorating demand. The first impression from the data was not good. On the journey from the airport to the property, the drive around of the immediate area did nothing to allay my impressions that this was a distressed market with few demand generators. T he client was looking to renovate and convert the franchise to a mid market, high visibility franchise. In the sales files the major demand generator contacts were found as well as those obtained through Economic Development and Chamber of Commerce lists. Both of these organizations take �positive pills� in addition to their daily vitamins and while we love them for that, their optimism has to be verified by data. The lists were used for focus calls to the key contacts at these demand generators. The focus calls revealed that they were will to pay much more for a mid market property and that the demand within these demand generators for mid market properties was sufficient to make that an interesting proposition. They were now booking those mid market travelers at properties in the next city as there were few if any options in the immediate area. To verify this, I commissioned a STR report that was limited to mid market properties in an expanded market area and discovered only two -- both of which showed increasing demand and ADRs over the past five years. From this data, we were able to conduct an impact analysis and projections of demand for a new upgraded franchise in this location. In terms of sales audits, we went into a property that predictably during
the recession was underperforming. They had made a decision to keep
their rates at a higher level than the comp set in most market segments.
An analysis of sales department activity showed high levels of activity
but the results were disappointing leading to discouragement and low morale
among the sales team.
Look beyond the obvious:
In any evaluation, it is imperative to be able to assess whether the sales professionals are open to change or locked into �the way we�ve always done it?� it often costs less to invest in training for open-minded existing sales professionals than to recruit new ones! Have you signed up for FREE Shots of Hotel Sales and Revenue Management Caffeine? These are short blurbs of tips and motivation that arrive in your Inbox every Monday morning. Shoot off a blank email to [email protected] to be included on the distribution list � your information will not be used for any other purpose.
Carol Verret and Associates Consulting and Training offers training services and consulting in the areas of sales, revenue management and customer service primarily but not exclusively to the hospitality industry. To find out more about the company click on www.carolverret.net. To contact Carol send her an email at [email protected] or she can be reached by cell phone (303) 618-4065. Visit www.hotelsalesblog.com. |
Carol Verret 5910 S. University #C-18, PMB 374 Greenwood Village, CO 80121 Telephone: (303) 618-4065 [email protected] Web Site: http://www.carolverret.com/ Email: [email protected] |