Hotel Online  Special Report

How Often Have You Heard, “I could have gotten a better
rate but the client saw our rates on the Internet”?
It’s Time To Get Back To Selling Location, Facilities, and Services

by Neil L. Salerno, CHME  August 2003

Now that we are closing in on two consecutive years of suppressed rates and disappointing revenue results, its time to take a deep breathe and think about our actions for the future. Times are uncertain, but much of what the future will bring will be shaped by what we do to change it. We will reap what we sow. 

As year-to-date results begin to flow in, it appears that ADR’s are still disappointing, with only a few exceptions. Experts are concerned that many hotels are still setting themselves up for further disappointment by setting ADR targets too low. There is concern in some circles that many hotels are still trying to buy business with lowered rates and everyone knows that lower rates do not create increased demand. 

Although rates are usually a factor in competitive situations, many hotels are discounting rates across the board solely because of the current “uncertain times” and not because it may be necessary to discount specific dates in order to book a selective piece of business. 

We need to be smarter about setting and quoting rates. Recently, TravelClick reported that rooms booked through the Global Distribution System and the Pegasus Hotel eCommerce (third-party room sellers) sites last quarter showed rooms sold were $30 higher than those directly-booked by hotels over the Internet. It seems that many hoteliers are convinced that the travel consumer only considers rates when booking a sleeping room. What ever happened to selling location, facilities, and service?

The first area that needs to be examined is what we are telling the public.  It seems that rates published on hotel web sites have begun to represent the true lowest rates a hotel has to offer. “Guaranteed Lowest Rates” and “Internet Specials” have replaced “Published Rack Rates” of the past. Hotels used to go through great pains to publish rack rates to demonstrate the true rates of their rooms so that discount rates had greater “value”.  It appears that we’ve moved from this “value-based” selling to “lowest rate” selling. We are getting to a point where the only difference between a $150 room and a $99 room is just $51. 

Now we know that, in theory, we can use the Internet to help us build our base business; after all, we can always limit availability, if needed. This would be fine if the Internet wasn’t so darned public. Our lowest rates have now become our published rates. This would be fine, I guess if consumers didn’t use these rates to negotiate group rates, corporate rates, and to determine the true value of our hotel rooms. As an old wise man said to me many years ago, “He who reduces his price, without reason, is the only one who knows what his product is really worth”. 

The promise of the Internet was to allow us to have a virtual selling piece available to our customers 24/7, on which; we could promote our hotels, post special deals and packages when they are needed; and relieve our over-burdened front desk and reservations staffs by allowing travelers to make on-line reservations. We would save on payroll, provide better service to those who did call to make reservations, and capture a new emerging market of cyber-travelers. 

The problem is that your sales team does not operate in a vacuum. How often have you heard, “I could have gotten a better rate but the client saw our rates on the Internet”. Have you seen all your rates become more horizontal than vertical? In some cases, we’ve seen group rates, booked at higher than rack average rates. These sales people are selling the experience not just rates; now that’s selling. 

Include your Internet rates in your revenue management solutions. Third-party eWholesalers can produce wonderful business, but consider their business as a separate market. You don’t have to compete with them. They will serve those travelers that are shopping for rate primarily, but don’t for a minute believe that every traveler is rate-driven. Easy? No, but it means we need to get back to selling our hotels. 

Times are uncertain. The competitive environment is at an all-time high. Upscale hotels are competing with mid-market hotels for group business and so on down the line. Although this is all true, what lasting collateral damages are we creating for ourselves? Are we teaching consumers how to find and book our lowest rates? When did we begin to post lower rates and expect to sell up to higher rates? 

We need to re-examine our selling strategy for the Internet and our direct-selling teams. Location, facilities, and services still sell hotel rooms. Caution, it does take more work. Solid selling skills and techniques in the reservations and sales offices can reap big rewards if we expect more and give them the skills to get the job done. 

Before you begin that new marketing plan, it might be a good idea to have a strategy meeting to get everyone back to the good solid techniques of selling location, facilities, and service. Set high abstract targets for the sales and reservations people to stimulate and challenge them. A good abstract target can also promote teamwork and team solutions; such as setting a goal to improve competitive set performance. Challenge the team members to set their own higher personal activity targets. 

Challenge the team to get higher rates without losing business. Be sure that the “book it at any rate” mentality no longer exists. Let’s get back to pre 9/11 selling techniques. 

Neil L. Salerno, CHME
Hotel & Internet Marketing Solutions
1369 South Wembley Circle
Port Orange, Florida 32128
Also See: Before You Begin that Marketing Plan Challenge Your Sales Team; Expect More and Get More / Neil L. Salerno / July 2003
Jump Up and Shout Yes - Delivering Best Online Customer Experience, Nice Job Vividence! / Neil L. Salerno / July 2003
Is The Internet Delivering On Its Promise? Well, It Depends on How you Look at It / Neil L. Salerno / June 2003
Coaching and Mentoring, Sometimes A New Paradigm Can Go A Long Way / Neil L. Salerno / June 2003
Sales Training Works Well, But Sales Mentoring Makes It More Effective; Mentoring Lasts a Lifetime / Neil L. Salerno / May 2003
Is It Time For A Sales Tune-up? How Healthy Was Your Last Forecast? / Neil L. Salerno / May 2003
Hotel Web Sites; Want it Creative or Effective? / Neil L. Salerno / May 2003
If You Always Do What You Have Always Done.... You’ll Always Get What You Always Got! Hotelier’s Mantra... Thinking Outside The Box / Neil L. Salerno / April 2003
Good Sales Planning - The Basics Still Work / Neil L. Salerno / April 2003

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