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Key Lessons Shared with Future Hoteliers at Penn State

 
David M. Brudney, ISHC, January 15, 2013

Did you happen to catch CNBC’s December documentary “Behind Closed Doors at Marriott”?
 
When asked about “fade rates” or “the Fade” - - a term used to describe the act of potential guests without reservations negotiating for heavily discounted rates at the front desk for a room that same night - - Marriott revenue guru David Roberts told CNBC investigative reporter Scott Wapner that Marriott “never does that.”
 
“If you do that,” Roberts said, the hotel has just trained that customer: “Don’t book in advance.”
 
In a recent article David K. Hayes and Allisha A. Miller, authors of “Revenue Management for the Hospitality Industry,” underscored Marriott’s policy further and described the “four revenue optimization errors” associated with the use of fade rates.
  1. The practice undermines the concept that the hotel’s rooms have an express value.
  2. It requires unrealistic front office training.
  3. It miscalculates costs.
  4. It seeks only to optimize short-term revenue for the property.
Hotel owners and operators have been debating the pros and cons of negotiating discounted rates at the front desk long before I started in the business 50 years ago.  I was taught to honor and protect hotel rate integrity from the very beginning of my hotel sales career.
 
Even today, as a professional consultant, I experience prospective client push back on my established fees.

The Picasso principle
 
Whenever I need reminding of the value and importance of established rates and professional fees, I read “The Picasso Principle” chapter from Harry Beckwith’s “Selling the Invisible.”
 
Beckwith uses a story about Pablo Picasso to demonstrate what talent and thought are really worth.
 
“Picasso, one of the greatest and most influential artists of the 20th Century, lived most of his adult life in France.  A woman was strolling along a street in Paris when she spotted Picasso sketching at a sidewalk café.  Not so thrilled that she could not be slightly presumptuous, the woman asked Picasso if he might sketch her, and charge ‘accordingly’.

Picasso obliged and in just a few minutes, there she was: an original Picasso.
 

‘And what do I owe you?’ she asked.

‘Five thousand francs,’ he answered.

‘But it only took you three minutes,’ she politely reminded him.

‘No,’ Picasso said.  ‘It took me all my life.’”

Beckwith’s message to his readers: “Don’t charge by the hour.  Charge by the years.”

Penn State student takeaways

The above is one of many lessons I have learned from my hospitality industry experiences, some of which I was honored to share last fall when I addressed students at the Penn State School of Hospitality Management.

The students were required to submit written takeaways from my presentation.  Here is a sample of what they recorded:
  • We live by relationships with support from technology.
  • Clients are acquired through personal credibility, knowledge & trustworthiness.
  • Be proactive, form relationships, keep in touch by networking.
  • Recognize your passion and follow it!
  • Never stop learning more about the business and the customer.
  • Take risks; those can be some of the very best experiences.
  • Longevity in any career can be attributed to an ability to stay current and adapt.
And here are some added tips for those potential consultants among the PSU students:
  1. Better to do pro bono work than to discount fees.
  2. Treat dollars client spends upon your advice as if it were money of your own money.
  3. Always attempt to exceed client expectations.
  4. Master the art of quick turnaround time.
  5. Always ask satisfied clients for referrals - - but know when to ask!
  6. Whenever in doubt on a pending engagement's status, never delay; make the call now!
I thank John O’Neill, the school’s director, and Brian Black, hospitality industry relations director, for the invitation.  I was very impressed with the school’s program and, in particular, the interaction with the students.
 
Two other highlights of my time on campus: my stay at the historic Nittany Lion Inn and a trip to The Creamery for some real ice cream. I very much look forward to returning soon to not only share more lessons but to do more learning on my own.

___________________________________________________

David M. Brudney is a founding member of International Society of Hospitality Consultants

David Brudney & Associates – www.DavidBrudney.com - 760-476-0830 - david@davidbrudney.com


David M. Brudney, ISHC, is a veteran hospitality sales and marketing professional concluding his fourth decade of service to the hospitality industry.  Brudney advises lodging owners, lenders, asset managers and operators on hotel sales and marketing “best practices” and conducts reviews of hospitality (as well as other industry) sales and marketing operations throughout the U.S. and overseas.  The principal of David Brudney & Associates of Carlsbad, CA, a sales and marketing consulting firm specializing in the hospitality industry since 1979, Brudney is a frequent lecturer, instructor and speaker.  He is a charter member of International Society of Hospitality Consultants.  Previously, Brudney held hospitality sales and marketing positions with Hyatt, Westin and Marriott.

 
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Contact: 

David M. Brudney, ISHC, Principal 
David Brudney & Associates 
Carlsbad, CA 
760-476-0830 Fax 760-476-0860 
(c) 760-994-9266
David@DavidBrudney.com
www.DavidBrudney.com

www.ishc.com
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Also See: Even Smaller Hotels Must Plan Their Work and Work Their Plan / David Brudney / September 2012

You can’t microwave marketing experience / David Brudney / July 2012

Collaborative Selling Necessary with Meeting Demand Returning / David Brudney / May 2012

PCMA's Successful Experiment With Hybrid Meetings / David Brudney / March 2012

Mike Leven Bullish on Las Vegas Group Demand / David Brudney / December 2011

Optimistic Forecast Bodes Well for U.S. Hoteliers / David Brudney / October 2011

Paid Search Producing Positive Results for Hoteliers / David Brudney / August 2011

It’s Time to Revisit the Art of "Check-Building" and "Add-Ons" / David Brudney / July 2011

Potential Business Lost by Hotel Sales Department Interruptions and Lack of Focus / David Brudney / June 2011

That Commitment to Excellence is Harry Mullikin’s Legacy / David Brudney / May 2011

Hybrid Meetings: An Idea Whose Time Has Come / David Brudney / April 2011

Next Gen Hotel Sales Pros Hungry for Storytelling / David Brudney / March 2011

Upselling Works Best Upclose and Personal / David Brudney / February 2011

Adapting to Change: Hotel Sales Professionals New Year’s Checklist / David Brudney / January 2011

Hotel Sales Professionals: Would You Buy What You Are Selling? / David Brudney / December 2010

Meeting Planner Voices Concern over Demand Return / David Brudney / October 2010

Value of Face-to-Face Meetings Resonates Even More Today / David Brudney / September 2010

Expect Hotels to Pare Back on Perks in 2011 While Implementing Modest Increases in Room Rates / David Brudney / September 2010

Good News for Meetings-Driven Resorts: Site Inspections and Bigger Group Bookings are Back! / David Brudney / August 2010

Kimpton Is Bullish on Fourth Quarter 2010 / David M. Brudney / June 2010

Landmark Decision by Arbitration Panel on Aviara Resort / David M. Brudney / April 2010

Group Business Comeback in the Cards / David M. Brudney / March 2010

Applying Five Tenets of Hotel Sales and Marketing in These Tough Times / David M. Brudney / January 2010
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