News for the Hospitality Executive |
Key Lessons Shared with Future Hoteliers at Penn State
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.
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:
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
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Contact:
David M. Brudney, ISHC, Principal |