Some Careful Digging Will Help
Uncover Lots of Profit
October 2003by John J. Hogan, MBA CHA MHS
Zig Ziglar tells of visiting the Washington monument. As he and
his party approached the monument, he heard a guide announcing loudly that
there would be a two-hour wait to ride the elevator to the top of the monument.
However, with a smile on his face the guide then said, "There is no one
waiting to go to the top if you are willing to take the stairs." (King
Duncan, King's Treasury of Dynamic Humor, Seven Worlds Press)
A brief look at each area is to carefully examine what is usually called the Business Mix.
Salespeople need to meet with the general manager to examine the current mix of business. By analyzing how much business is being generated from each market segment, and at what rate, it will become obvious if a change in the mix is desired. Most properties have a system for recording this information daily.
Aiming for 100% occupancy as the only goal has not worked for years now – in today’s market, we have to consider revenue per available room (RevPAR), the overall arrival/departure patterns and the level of service we are able to provide as well.
Typically, the market segments for most hotels (regardless of size)
will include individual travelers, which will further break-down into those
paying regular rate, certain negotiated rate corporate travelers and a
variety of individuals participating in some kind of special discount program,
such as seniors, AAA, government, referrals from 3rd party web sites, etc.
Some types of business generate more profit for a property than other
types. Student tour groups, for example, may generate good room sales,
but little in the way of food & beverage revenues. Youth sports’
tournaments bring teams, parents and families that do provide F&B sales.
There are many salespeople who make sales calls on their corporate accounts
only to look for the individual business traveler.
• Similar Accounts:
There is a tendency for similar businesses or accounts to do similar
things. If, for example, a property does business with Army recruiting
people for meetings and meals, it is likely that the Navy, Air Force and
Marines are doing pretty much the same thing, somewhere else.
If a property hosts a weekend conference of piccolo players, then it is
probable that there are associations of drummers, piano players or violinists
who have similar meetings. If there is a party for a new-car showing
put on by one auto dealership, then there may be a similar party that could
be solicited from other dealerships in the area.
John Hogan, MBA CHA MHS is the Director of Education & Cultural Diversity for Best Western International, the world’s largest lodging chain. His background includes teaching college level courses as an adjunct professor for 20 years, while working with Sheraton, Hilton, Omni and independents hotels. Prior to joining Best Western International in spring of 2000, he was the principal in an independent training & consulting group for more than 12 years serving associations, management groups, convention & visitors’ bureaus, academic institutions and as an expert witness. He has conducted more than 3,000 workshops and seminars in his career to date.
He has published more than 175 articles & columns on the hospitality industry and is co-author (with Howard Feiertag, CHA CMP) of LESSONS FROM THE FIELD – A COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES, which is now available from HSMAI.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of this publication or of Best Western International. A variation of this article appeared in LESSONS FROM THE FIELD – A COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES.
Director, Education and Training
Best Western International
20400 N. 29th Avenue
Phoenix, AZ 85027
"...we all need a regular dose of common sense "
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