Low Rates, Location and Billboards Aren't Enough
in Limited Service/Economy Lodging

by Kirby D. Payne, CHA

The fundamentals of marketing the services of a Limited Service/Economy Lodging property always seems to include relatively low rates and a few billboards, most of which are directional or sell rates. Location, which was one of the first marketing decisions made regarding a property, is usually chosen based on proximity to more upscale hotels and low land price. However, there is considerably more to marketing this type of property. In fact, other than the limited dollars available for marketing, there should be little difference in approach between marketing the features of a Limited Service/Economy Lodging property and those of the more upscale properties.

Notice the key word, features! A Limited Service/Economy Lodging hotel must have features which satisfy the needs of the various types of travelers who come to the area and to whom the particular hotel's physical structure and location are designed to appeal. There are many service and amenity features offered by these properties which can be incorporated into a Limited Service/Economy Lodging property at minimal expense. The full service hotels in the competitive market area should be toured to determine what is appropriate and suitable.
 

Service and amenity features offered by Limited Service/Economy Lodging hotels
Improve the bathroom linen presentation to make it appear more upscale.
Offer an ounce and a half bar of soap for bathing. 
Improve bathroom lighting. 
Remove outside sales materials, such as restaurant menus, from rooms. 
Try to keep rooms from looking institutional. 
Be meticulous about guest room cleaning. 
Keep televisions in good repair. 
Offer cable TV, movie rentals or both. 
Have a well lighted desk area for guests to work. 
Have good lighting for guests to read by. 
Minimize the use of automated wake up calls, use the guest's name and give the current weather. 
If the property has no king beds add them gradually as beds are replaced. Put them in rooms connecting to dbl/dbl's if possible.
Offer free local calls if there is unrealized potential commercial business. 
Keep a large basket of fruit on the desk and OFFER it to each guest at check in and check out.
Don't clutter the lobby with unorganized sales materials, decals and souvenirs. 
At least offer coffee in the morning, but a full continental breakfast with fruit, yogurt, juices and a variety of breads and rolls is best. 
A uniform program or at least a employee dress code is important. 
Source: American Hospitality Management Company, Minneapolis.
 

Another area of marketing which is not always considered thoroughly is the issue of maintenance and redecorating. Good taste and quality maintenance often take the back seat to short-sighted cost-consciousness to the determent of the hotel. Using the services of an interior designer knowledgeable in Limited Service/Economy Lodging properties will always result in a quality look at possibly a lower budget. Frayed, worn and graying bed and bath linen have a strong negative impact on guest perceptions. Band-Aid repairs, unprofessional work and inconsistent appearance all combine to erode the guest's perception of his experience. Things a manager doesn't notice, because they have always been that way, often stand out to a guest.

This interior presentation along with a good exterior appearance, combine to create a total image. The cliche, "you never have a second chance to make a first impression," applies to every individual part of a hotel and is a key component of any marketing program.

Limited Service/Economy Lodging managers tend to be too busy to make sales calls. This is usually a result of overly cost conscious owners and operators who try to economize by having the manager work an inordinate amount of time as a guest service agent (desk clerk). The managers hired by many independently-owned franchise properties do not have a well developed hotel industry or professional sales backgrounds. As a result, most are either afraid to make sales calls or are ineffective. Training and inexpensive collateral materials can help over come their reluctance to make sales calls. This can usually be overcome by explaining the concept of selling benefits.
 

The concept of selling benefits is an old one and is explained thoroughly in at least two series of training videos available from the Educational Institute of the American Hotel and Motel Association. The idea of selling benefits is a simple four step process.
  • First the sales person needs to be familiar with the features available for sale. 
  • Second, skills must be developed where the potential guest's needs are identified through active listening to the information they volunteer and that the sales person elicits from the guest through conversation.
  • Next, the features of the hotel are offered to the potential guest in terms of benefits that will satisfy their needs. 
  • Finally, the person usually closes the room sale by either nicely asking for a decision regarding the choices offered or by assuming the sale has been completed. 
Some features are of no value to some guests because they do not offer any benefit to them. Conversely, potentially appealing benefits can be presented to potential guests in a way which does not, from their perspective, satisfy their needs. It is essential for the sales person to have some control of the conversation in order to obtain the necessary information and understand the potential guest's needs. The hotel's features then can be strategically translated into benefits specifically addressing that guest's unique needs. This system works both on outside sales calls and in the front office. The front office's reservation and guest registration functions are particularly well-suited for this sales method. The reservationist or guest service agent both need to have sufficient information before the various room types and rates are offered to a potential guest for them to make a selection (decision). Rates should never be quoted until some basic information regarding a guest's needs are identified. Arrival date, number of people, and reason for travel are fundamentals. The key to benefit selling from a trainer's perspective is that the individuals are not taught to sell. They are trained to know their product and their customer and to explain the hotel's features in terms of desirable benefits without a hard sell. Even the most reluctant hotel staff member can be trained to sell benefits successfully. 

A Limited Service/Economy Lodging property's room rate program is an important tool for maximizing income. In Limited Service/Economy Lodging hotels, the room rates are usually limited to a published (rack) rate system and simplistic discounting from the published rates for what are thought to be key markets. There is a tendency to over-look the fact that Limited Service/Economy Lodging by definition means discounted low rates. Significant discounting below published rates is usually unnecessary and when it is implemented, it should be done on a very limited and selective basis.

The former President of Hilton Service Corporation (Hilton Reservation Service), Marco Armani (deceased) was a master of the intricacies of room pricing. Mr. Armani emphasized the point that rooms were not really all alike and that guests wanted a choice. Therefor, consideration should be given to the additional price a hotel could charge for these differences. Another key point of his room rate programs was the difference in rate charged for single or double occupancy in a specific room type. Thus the spread between room types and single and multiple occupancy were the amounts he varied to increase a hotel's average daily rate (ADR) without necessarily raising the minimum published rate. As a final, point he always emphasized that simplicity in the rate structure is a key factor in training front office staff to sell the rate program to guests. These principles work in any property with more than one guest room including hotels which are Limited Service/Economy Lodging facilities.

Certainly low rates, location and billboards are key marketing tools but attention to the other details of marketing will make a significant difference in profitability. Who knows, they may even put your Limited Service/Economy Lodging property in the enviable position of having so much demand that the management can be selective about which market segments it accommodates, when, and at what price. It can happen!

For additional information, contact:

Kirby D. Payne at the firm

American Hospitality Management Company
1500 South Highway 100, #375, Minneapolis, MN 55416
Phone: 763-591-7640 Fax: 763-591-1593

email: kpayne@american-hospitality.com

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