By
Doug Kennedy
March 18, 2011
Given that today’s revenue strategies and systems are more
advanced than ever before, hotel revenue management and marketing
executives
are not only better able to forecast demand in advance, but also to
adjust and
change the rates according to unexpected variations as dates
approach. With just about every hotel reporting that
their pick-up is more last minute than ever lately, the end result is
that
today’s front desk and reservations sales agents are quoting transient
rates
that swing dramatically and also explaining the terms of rate “fences”
that
vary greatly according to market conditions.
Historically, hotel marketers have always adjusted rates and
terms periodically. However the changes were typically more predictable
such
resorts that had high and low season rates, or business hotels that
dropped
rates on the weekends. Likewise, most
all hotels at least sometimes changed the deposit terms, such as
requiring full
prepayment for city-wide events . Yet
in today’s RM environment, rates and terms change much more
frequently. Therefore it is more important than ever to
provide frequent training and coaching to your transient sales team on
how to
best execute various rate strategies.
Here are some tips from our KTN training modules on the subject of
executing various rate, pricing, and distribution strategies:
Rate Quotation Strategies During Periods of High Demand:
- Position the initial rate(s) being quoted as
being a good value. When quoting top
rates during high demand, it is more important than ever to use room
descriptions that allure and entice, not just list the features.
So rather than saying “It’s a 400 square foot
deluxe king room with a pillow top
mattress and 500 thread count sheets,” train your team to say something
like
“This is our largest and most spacious
guest room, and I’m sure you’ll enjoy our extremely comfy pillow-top
mattresses
and ultra-soft sheets that our guests always rave about.”
- Reference higher “rack” rates when quoting lower
rate tiers. During periods of high – but
not extreme – demand, your hotel may be selling rates that are higher
than
normal but still lower than your highest “rack” rate. In this
case train your team to mention the
“rack” rates to position the rate being quoted as being a good value.
For
example: “The standard rate for our King
Deluxe room is $200, but for the dates you are looking at we can offer
you the rate
of $175.”
- “Sold-out”
vs. “not available.” When callers ask for discounts that are closed out
for
high demand dates, train your team to say that lower rates are “sold
out”
versus “not available.” The term “not
available” implies that the rate exists but we are not going to give it
to you.
The term “sold out” implies that the supply has been exhausted. Train
them to
also offer to check for other dates when promotional rates are
available, which
will help move demand to lower-demand dates where it is needed.
- Explaining The Advantages of Minimum Stays. During
high demand your strategy might
include having minimum stays. An easy
example is for a three-day holiday weekend such as Memorial Day.
Often callers will want only two nights and
you can train your team to say, “Since it is the holiday weekend we do
have a
three-night minimum stay like most of the other resorts in the
area. I know you were only looking for two nights,
but the great part is that when you leave on Sunday you won’t have to
worry about
an 11am check-out time since you will have the room as late as you want
it…” Or if they want the last two nights
your agents can say “…. Although you
are arriving Saturday you can use the third night for Friday, so that
way when
you arrive your room will be immediately ready instead of having to
wait for
our 4pm check-in time."
- Upsellling.
Depending on your inventory of accommodations, during periods of peak
demand your hotel might find that the best room categories sell out
last. If it is case it is important to train your
team not to inadvertently apologize and make what’s left sound like
“left-overs.” So instead of them saying “All we have left is our
suites…” or
“All we have left is our concierge floor rooms…” or “All we have left
are our waterfront
view rooms…” Instead they should say “Fortunately I still have some
options for
you…. What I still have available is
actually one of our nicest options…
Actually, it is only $50 more than our regular rooms would have been if
they were available and the great part is that you will receive….”
- Down-selling.
Again depending on your inventory of rooms and what type of hotel you
operate, you might sometimes find that during periods of peak demand
the best
accommodations go first, leaving less desirable room types or
locations. For example a beach or lake front resort
might find water view rooms sell first, and it is the “garden” or
“courtyard”
view that is left. Train your sales
team that as with the previous example, they need to avoid making
what’s left sound like
left-overs. They should start by
pointing out any glaring deficiencies, so that guests do not have an
unwelcome
surprise at registration, but then talk about what is good about the
remaining option. For example,
“Fortunately what I still have open for your dates are our limited view
rooms. Now this of course won’t have the
water view you requested, but the room does have all of the same
amenities and
you can still use all of the hotel facilities I mentioned. And
since there’s so much to do here nearby, you
might not find yourself in the room all that much anyway. It
really is a great value at just $150.”
- Holding the line on price. During periods of high
demand when all
discounts and promotions are closed out, some callers will no-doubt
still ask
for discounts if nothing else just to test the reaction. Make
sure your staff quotes full rates with
confidence and understands that smart
consumers always ask for a lower price even if only just to check.
Rate quotation strategies for low
demand dates:
- Incremental upselling. During periods of extremely
low demand most
hotel revenue managers want their agents to start by offering the
lowest
available rate that his showing to avoid losing any potential bookings
whatsoever. In this case you can also
train the team to always offer at least one higher rated accommodation
and in
doing so quote only the incremental rate difference. “Now Mr.
Perez our Premium level rooms
include all of the same features of our traditional room I just
mentioned, and
for only $35 more you can upgrade to this level where you will receive
and have
access to….”
- Quoting “fade” rates. Although many hotels have long
ago moved to a
strategy of always quoting the “best available rate,” other hotel
revenue
managers still encourage their staff to offer “fade” or “don’t lost the
sale”
rates to avoid losing any calls to competitors.
Even if your strategy is typically not to fade, you probably still want
agents to match certain rates under certain conditions, such as when a
lower-tier rate was accidentally left open for an OTA channel that is
lower
than what is showing on the hotel website.
When executing this strategy, train your agents to indicate they have
to
“check further” for the lower/special rate; then after a short pause or
brief time
on hold, they can create urgency while offering the lower rate by
saying: “Okay
thanks so much for holding Ms. Smart, I
was able to check on that. If we can
confirm this for you now I can offer you the special rate of …”
Rate quotation strategies for all market conditions:
- Explaining why rates change during a stay. Hotels
that are aggressively managing their
revenue and pricing may use a strategy whereby rates change on a
nightly basis,
resulting in a guest’s rate changing one or more times during the same
stay. Even when the revenue strategy is to quote
“complete stay rates,” callers will often ask for the break down by
night. Train your agents that in this situation
they should quote the higher rated nights first, regardless of their
arrival
pattern. So instead of saying “the rate
for the first night is $150, then it goes up to $175….” they can say
“for the
last night of your stay the regular rate of $175 applies, and on the
first
night we can offer you a lower rate of $150.”
- Explaining why rates are higher than a previous
stay. Certainly in the last couple of
years hotels across all market segments and locations offered lower
rates than
they have ever before offered. Now with
demand rebounding, hotel RM’s are working to gain back
rate. So it is common than ever for callers to say
“that’s so much more than I paid last time.”
Train your team to respond with a comment such as “Yes, I know, we did
have some lower rates last season with the economy being what it was,
but with
things getting back to normal and we’re back to our more traditional
rates.”
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Doug
Kennedy, President of
the Kennedy Training Network, has been a fixture on the hospitality and
tourism industry conference circuit since 1989, having presented over
1,000
conference keynote sessions, educational break-out seminars, or
customized,
on-premise training workshops for diverse audiences representing every
segment of the lodging industry. Ee-mail Doug at: [email protected] |
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