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Hotel Training Budget Reflects Belief Systems

By Doug Kennedy
September 14, 2011

If you are like most hoteliers, chances are that your property is having one of its best years in recent memory.   Yet with the recent stall in the economic recovery, it is important not to assume that next year will automatically be just as profitable.  Even if the overall economy continues to rebound, it is important to continuously raise the bar as we set new goals for 2012 and beyond.  In the hotel business as in life, we must always reach for higher goals, lest we become complacent and satisfied with what we have already achieved.   

As your executive committee plans its budget for its next annual cycle, remember that what ends up in (or out) of that budget reflects your organization belief systems regarding how training and development can impact hotel profitability.  The way in which your organization plans for and budgets for ongoing sales and guest service training definitely reflects its belief in how much the staff can add to or detract from the bottom line.  Although captivating websites and coming up top of the first page on Google searches is mission number one for your marketing and revenue team, it is the performance of your frontline sales and service staff in converting inquiry calls, along with providing memorable experiences that result in positive online guest reviews and social media postings that are going to be keys to future growth.  

Rather than picking a random dollar amount to budget for training, or just going with the same amount as last year, why not try a new approach?  Start by envisioning the results you would like your team to achieve.  Be more specific than “increase sales” or “improve guest service scores.”  Instead, the right way to budget for training is to start by visioning what the potential is for your sales and guest service staff to improve profits.  Before you put into print a dollar amount, why not start by calculating the potential ROI of improved guest service or sales effectiveness?

A good starting place is to look at the huge impact that even the smallest incremental improvements can have on revenues by running these numbers for your hotel or lodging company.  How much more revenue could your team generate if:

  • The entire front desk and/or reservations staff converted just one more reservation inquiry each day?  (Multiply your transient average stay by your transient average rate, then multiply the result by 365 days in a year.)
  • The front desk team captured just one more walk-in per week?  (Again multiply the transient average stay times the transient average rate, then multiply by 52 weeks.)

  • The front desk and reservations team convinced just one “rate double-checker” each week  who was just about to book your hotel through an OTA to book directly right here, right now.  (Calculate the average OTA commission paid per booking by 52 weeks.)

  • The front of the house guest contact staff provided such great service that an otherwise indifferent guest posted a positive online guest review, which was later read by a “fence sitting” undecided guest who decided to book based on that review?  What if this happened just once per week? (Use above formula.)
  • The hotel sales department did such a great job of out-servicing the competition, in terms of response time and also the quality/personalization of the response, that they were able to convince just one additional group per quarter to use the hotel?  (Multiply the average revenue per group booking times four.<>)
If you make the effort to do this exercise and to run even the most conservative ROI numbers on the results of training, it becomes obvious that the training budget should be viewed more like a marketing investment used to generate new business rather than as an operational line item expense.  The reality is that the above numbers are conservative, especially if your hotel or lodging company has not yet had a strong, consistent focus on training and development.

Given recent trends, such as the ever increasing transparency of the guest service experience due to online guest reviews and social media postings, the potential ROI on hospitality excellence training is greater than ever before, just as the potential for positive word-of-mouth advertising has expanded into “viral marketing.”    The same is true on the sales side, as our ever efficient revenue managers have used the ever-more-effective demand and pace trending resources so that most hotels are priced comparably within their market segments; when the price is virtually the same, the sales responsiveness is more vital than ever.

If your organization truly believes that hotel training can have a positive impact, then now is a great opportunity to get a head start on the competition for 2012 and beyond, as many hotel operators are now satisfied and happy after a great year to the point that they just might become complacent. Here are some factors to consider when budgeting for future training:

  • Assess your current in-house training.  Does the staff receive at least one training reinforcement session per quarter?   Or is the only training that is provided basically “On The Job” training from a co-worker?  Do you have a qualified in-house trainer, or a manager who has the training skills?  Do you need to secure resources such as train-the-trainer coaching or packaged training programs?
  • Review outside training support that is available from the hotel’s brand  or membership group.  Reach out in advance to find out what training they will be offering in the coming year.
  • When in-house and brand or management company training resources are limited, or have already been used for your staff, consider outside training support from companies like ours (KTN) and others that come up in an Internet search.   Select a company that specializes in hotel industry training not one that teaches generic sales or service programs.
  • Where possible, coordinate plans for training with sister properties.  For outside training support this will help bring down the costs, as most companies allow sister hotels to share the fees.  For in-house training this is also a great approach, as there may be managers or trainers from the other hotel(s) that can bring a new  perspective.
  • Encourage your local hotel association, visitor’s bureau, or other destination marketing organization to organize area-wide training sessions for the member hotels.  Again this is a great way to reduce the costs as fees can be shared by all the hotels that participate.
  • Don’t skip training when it is busier than expected and it’s “too busy to schedule training.  Similarly, don’t cancel training when it is revenues are lower than expected , remembering that training helps to bring in more business.
  • Factor-in time for instructional design, especially if you have tasked your in-house managers with creating program content on their own.
  • Budget for resources to measure the training. (Examples include in-house call monitoring, outside telephone mystery shopping, on-site mystery shopping, guest satisfaction surveys, and post-departure guest surveys.


 
Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry.  Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades.  Visit KTN at: www.kennedytrainingnetwork.com   Read his travel blog at ontheroad.kennedytrainingnetwork
or email him directly:  doug@kennedytrainingnetwork.com 
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Contact: 

Doug Kennedy
President
Kennedy Training Network, Inc.
1926 Hollywood Boulevard, Suite 203
Hollywood, FL  33020
Office: 954.981.7689
Mobile: 954.558.4777
doug@kennedytrainingnetwork.com
www.KennedyTrainingNetwork.com

 

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Also See: Hotel Voice Reservations: The Forgotten Channel / Doug Kennedy / August 2011

It's Time For Today's Technology-Focused Hotel Salespeople To "Go Old School" / Doug Kennedy / July 2011

Don’t Let A Culture Of Profitable Mediocrity Infiltrate Your Hotel / Doug Kennedy / June 2011

Hospitality Examples Observed From TSA Airline Security Staff / Doug Kennedy / May 2011

The Hotel Front Desk Is a Distribution Channel / Doug Kennedy / April 2011

Train Your Sales Agents To Execute Your Hotel’s Rate Strategies / Doug Kennedy / March 2011

Savvy Hoteliers Still Make Voice Channels A Priority / Doug Kennedy / February 2011

True Hotel Sales Superstars Love “Clueless” Callers! / Doug Kennedy / January 2011

What If A Hotel Brand Could Ask The Same Question Southwest Airlines Asks In Their New Ad? / Doug Kennedy / December 2010

Hoteliers Should Utilize New Tools For Measuring Hospitality and Guest Service Efficiency / Doug Kennedy / November 2010

Training Your Team To Master “Channel Conversion” Techniques / Doug Kennedy / November 2010

Upselling Strategies For Your Front Desk and Reservation Teams / Doug Kennedy / September 2010

Training Is Key To Turning “Desk Clerks” Into Front Desk Salespersons / March 2007

It’s Time To Give Hotel Guests What They REALLY Need and Want Daily! Key Basics Some Hotels Still Fall Short On / Doug Kennedy / September 2006
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