When managers make decisions, they think forward and backward whether they know it or not. Thinking backward means looking for patterns, linking events, and searching for metaphors that explain causes and effects. Thinking forward entails weighing variables, making calculations, and preparing alternative plans. You will think backward well if you use more than one metaphor to describe a situation, resist the temptation to infer a cause from just one clue, and sometimes look for unexpected causes to explain effects����. ¹

�In complex situations, we may rely too heavily on planning and forecasting and underestimate the importance of random factors in the environment. That reliance can also lead to delusions of control.
        Hillel J. Einhorn (1941-1987) Pioneering scholar in behavioral decision research. 

Understanding and monitoring the inflow and outflow of cash must be a top priority for every hospitality business owner, operations manager and sales team member.   Many sales teams are not given enough information on the overall business cycles and needs to allow them to be as engaged and effective as possible. Planning ahead for seasonal fluctuations and unexpected emergencies allows for dealing with challenges and at least partially reduces stress. 

In a down economy, the potential for a shortfall in business resulting in diminished cash flow is of real concern. The ability to deal with this underperformance in advance will definitely help address the challenge.

The need for thoughtful and responsive planning is more significant than ever and the quote from Einhorn says it all � it takes conscientious efforts to address the situation and begin to turn the state of affairs around.

This 2 part series is very direct and applies common sense in approach. 

• The first part addresses Mapping out Your Sales Plan and Preparing and Revising Your Sales Forecast.
• The second will examine Aligning Your Expense Budget With Your Forecast and Sales Plan  and Practical Approaches to Opportunities in the Market.

It's not enough these days to hire a salesperson and say: "Get out there and sell."  As an industry and in each particular hospitality business, we must work to do a better job communicating, developing, training, motivating, planning, organizing, directing and controlling.   This applies to both people and process.

Engage in these sales guiding principles when soliciting/booking business and servicing existing accounts:

A.  Acquire and use good selling knowledge.  There are a series of fundamental questions that are essential for long term success. These include details on finding out who your customers are: 

• Their points of origin or where are they coming from � we can identify this by the reservation, the registration card, our PMS system or other sources.  This information can be essential to measuring the effectiveness of a marketing campaign or to quantify changing demographics.
• How did they come to select your property? Were you their first choice? Were they referred by an area business, another hotel, or because their 1st choice was not available? Are the loyalty programs encouraging them to choose your location?
• Why do they stay at your property ? Are they there for a meeting, an overnight, a vacation, a reunion, in response to an advertisement?  Your front desk staff can qualify this very important information and the sales team can then use this to update their future forecasts and proactive planning
• How long do they stay ?  Obviously multiple nights are desirable if the rate and revenue are properly set .
• How much do they spend?  Total revenue is also a contributing factor to useful knowledge.

Another fundamental is Attentiveness To Selling Costs.  In any business, spending more than you take in, of course, is dangerous. Cost effectiveness in selling for a hotel is very important. As total sales expenditures start to creep up, you must continue to expect a greater return from your sales effort. Budgeting for sales and monitoring the sales budget against results are essential.   This means pricing properly, including the costs for loyalty programs and measuring the effectiveness of special advertising or marketing efforts.

B.  Plan A Good Market Mix.   Which there are clear differences in markets, there are also overlapping ones, such as a corporate client today that may be a vacationer tomorrow or their company might have extended stay needs that your hotel can serve.   It is extremely difficult to be all things to all people all the time, which means knowing your proper customer base.  While one does not want to turn away potential revenue or clients , understanding the mix of business reflects how much of what type of business you're doing. 

Look at your records and daily reports and assess the following: What percentage of my total room sales comes

• from meetings at your hotel or nearby centers ?
• from youth groups or sports related activities ?
• from the transportation center (airport, bus, cruise lines, trains, etc) ?
• from seniors and why?
• from the brand reservation center and at what rates and plans?
• from the nearby community college, university, large high school?
• from the medical center or offices?
• from the chamber of commerce or convention/visitors� bureau activities?
• from transient business, walk in guests and other categories?

Now assuming you do have the above information and after you review the past 3-6 months to accurately see trends, what decisions do you need to make in your selling activities?   What mix of business would be most profitable?  Which mix can you actually obtain?  What changes need to be made in your selling activities?

C.  Innovate - try something new.  Remember: most successful entrepreneurs would not be where they are today if they didn't take a chance and try new things. Come up with fresh ideas to promote business and don't be afraid to put them into action. 

• Focus on People. You want and need sales professionals who are sincere, believable, down-to-earth, friendly, committed, well dressed and well mannered; in other words, individuals who will represent your property well.   In an effective sales mind-set, the common ground is a commitment to anticipate guest wants and needs,  and to engage every associate from the owner to the general manager to all guest contact staff to understand the shared accountability for contributing to the overall hotel sales effort.
• Develop new sales techniques to book more rooms and new proposals to land more group business. Every veteran hotelier can recall in their career examples of hotel sales teams that were very creative and innovative.  The brands, markets, cities, and specific approaches were different but the spirit of these creative people is what contributed to their success. Realize that only a percentage of the  new ideas will fully work, but that percentage will contribute to the hotel�s overall success.   A dynamic sales culture is an atmosphere where all guest contact staff proactively seek to service guests� needs, which will produce satisfied customers and likely revenue improvement for the hotel. 
• Don�t ignore technology � embrace it!   Almost all branded hotels have systems that heavily address online bookings and promotions, but they require the hotels to willingly support the programs.  As most brands today genuinely are focusing on everyone�s success (or in some cases, survival), there is a greater sense of partnership than at some times in past relationships within the industry. If you are an independent, there are many services available to assist you, including through your state, provincial or national hospitality associations.

Hillel J. Einhorn, whose quote was in the opening section, was not a hotelier but a scholar who researched how managers made decisions.    Occupancy and rate continue to stagnate in many locations globally, yet we must address both the specific and random factors Einhorn mentioned.

A.  Know Your Competition and specifically your direct competitors.   I continue to read and hear more than one brand CEO warn that  there are �going to be more empty rooms at the hotel across the street from you and they are going to be scouting your customers.�  The current heavily debated discounting by some brands globally is another challenge to be addressed, but this is a personal battle fought at individual locations. 
A thorough knowledge of the other properties near you and that compete with you can help you size up your property and determine the areas in which you can compete the best, whether it is location, price, size, product, service or amenities. The idea, of course, is to sell your positives and to expand your market share.
 

B.  Research and qualify your multiple price policy.  Selective discounting has its place in our industry. Hotels have been doing it for years, with special off-season, corporate, group, senior citizen and military rates, among others. 

• Do you know which special rates are generating business for you? A periodic review of all your rates will help you establish the multiple-rate policy that's right for you. 
• There are many 3rd party sites that may or may not help your profitability and/or cash flow. If you make the decision to work with a discounter such as Hotels.com, Expedia, Hot-Wire, Orbtiz, Booking Buddy,  PriceLine, Travelocity or the new "hot" service, track your actual demand (rooms used, rooms denied because you were full, rooms declined for reasons of rate, location, etc.) so you can evaluate intelligently the business decision.
• Determine what your competition is doing by these organizations as well so you can make the correct decision for your hotel.
• Evaluate what your brand�s programs are contributing to your top and bottom line, if you are part of a system.  Set your prices accordingly and support the programs that help both you and the other members of your system.

• Pick the low hanging fruit   A Google search of this often-heard term will offer literally dozens of examples of this phrase, including this explanation: �Choose the easy deals or sales.  � On occasion, a quick boost in your sales and marketing efforts can be to bring someone in with a fresh perspective. This fresh set of eyes can be someone from another department in your hotel or company or a consultant on a short term assignment.  This activity, if executed properly, can solicit suggestions, remove unintentional biases and then choose and implement a number of small action plans that may cost little but show noticeable revenue gains. 
• Make high-quality Business Contacts And Make Them Work For You. Getting good business contacts is the first step, and making sure they're bringing business into your property the second. Make sure your contacts are frequent users of either the area and/or your property and then ask them to provide you leads.
• Set Realistic Growth Plans.   Yes, even in down economies, there must be some stretch goals.  These should assess where you where you are today and honestly project where you expect and want to be next year, the year after, and so on.    Group, corporate or any other market segment  may have fallen off from previous years, but there remain ways to maximize potential with better planning, timely follow-up or selective selling based on the information identified in 1C above � planning your market mix. 

¹ Harvard Business Publishing Decision Making: Going Forward in Reverse  by Hillel J. Einhorn, Robin M. Hogarth 
5 pages. Publication date : Jan 01, 1987. Prod. #: 87107-PDF-ENG

I was invited by Lorman Education Services  to offer a teleconference on this topic and they have agreed to offer a $50 discount for any of my readers that mention discount code Z7745121 when they register online.

Feel free to share an idea for a column at [email protected] anytime or contact me regarding consulting, customized workshops, speaking engagements ����. 
And remember � we all need a regular dose of common sense.

Autographed copies of LESSONS FROM THE FIELD � a COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES can be obtained from THE ROOMS CHRONICLE www.roomschronicle.com and other industry sources. 

All rights reserved by John Hogan and this column may be included in an upcoming book on hotel management.   The opinions expressed in this article are those of the author and do not necessarily reflect the views of this publication

John Hogan, a career hotelier and educator, is frequently invited to participate at franchise meetings, management company and hospitality association industry events.  He is a successful senior executive with a record of accomplishment in leading hospitality industry organizations at multiple levels, with demonstrated competencies as a strong leader, relationship builder, problem solver and mentor. He conducts mystery-shopping reviews of quality in operations and marketing, including repositioning of hotels.

Expertise and Research Interest
� Sales Management and training
� Turn-around and revenue management
� Professional Development & Customer Service
� Hospitality Leadership and Executive Education
� Making Cultural Diversity Real
� Accreditation & Developing Academic Hospitality programs

He writes weekly columns for a number of global online services and has published more than 400 articles & columns on the hotel industry.  He co-authored (with Howard Feiertag, CHA CMP) LESSONS FROM THE FIELD � a COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES, which is available from [email protected], ROOMS CHRONICLE www.roomschronicle.com  and other industry sources.  He resides in Phoenix, Arizona and expects to publish in 2009 his 2nd book based on his dissertation � The Top 100 People of All Time Who Most Dramatically Affected the Hotel Industry.

Hogan�s professional experience includes over 35 years in hotel operations, food & beverage, sales & marketing, training, management development and asset management on both a single and multi-property basis, including service as Senior Vice President of Operations in a specialty hotel brand for six years.

He holds a number of industry certifications (CHA, CHE, MHS, ACI) and is a past recipient of the American Hotel & Lodging Association�s Pearson Award for Excellence in Lodging Journalism, as well as operational and marketing awards from international brands.  He has served as President of both city and state hotel associations.

John�s background includes teaching college level courses as an adjunct professor at three different colleges and universities over a 20-year period, while managing with Sheraton, Hilton, Omni and independent hotels.  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 joined Best Western International in spring of 2000, where over the next 8 years he created and developed a blended learning system as the Director of Education & Cultural Diversity for the world�s largest hotel chain. 

He has served on several industry boards that deal with education and/or cultural diversity and as brand liaison to the NAACP and the Asian American Hotel Owners� Association with his long-term involvement in the Certified Hotel Owner program.  He has conducted an estimated 3,200 workshops and classes in his career. 

Service to the Industry and Hospitality Education includes working with the Educational Institute Certification Commission of the AH&LA, the Hospitality Industry Diversity Institute, the AH&LA Multicultural Advisory Council, the Accreditation Commission for Programs in Hospitality Administration, the Commission for Accreditation on Hospitality Management Programs, the AH&LA and AAHOA Education and Training Committees, the Council of Hotel, Restaurant and Institutional Educators (CHRIE), the International Hotel Show and the Certified Hotel Owner program for the Asian American Hotel Owners� Association.
 

Dr. John Hogan, CHA MHS CHE
[email protected]