How Much Does It Cost To Generate A Voice Reservations Inquiry? How Much Are You Investing In Properly Following-Up?
March 5, 2018 12:47pm
By Doug Kennedy
Despite that there is more information for guests to view online than ever before in the history of the lodging industry, the phones continue to ring in reservations offices and at the front desk. Simultaneously, hoteliers continue to increase direct bookings. Hardly a day goes by that I don’t see another article on this topic, yet when I click on them the discussion is almost always on website bookings; rarely do I see a mention of voice as a distribution channel. If you are truly committed to increasing direct voice bookings, read on.
A first step that I always do with my consulting clients and also with participants in our KTN reservations training workshops is to calculate the costs of making the phones ring. Granted, this is not a perfect science, but even an approximate number is eye opening.
What does it cost to make the phone ring? Depending on what type of hotel (branded verses independent), the market mix (business, leisure, bleisure, group, contract / BT), and the geographic location, immediate direct costs include:
There are so many other intangible costs too, such as the investment in the website itself as a primary driver of voice. Google research shows that mobile searches in particular are very likely to result in a “click to call.” The most recent statistics I can find show this happens 70% of the time. Granted these numbers are now 5 years old and not hotel specific, but this is certainly an indicator. If you want solid – if anecdotal - evidence, just ask your reservations agents how often they receive calls from those who are calling from a smartphone while driving or watching TV. Another intangible cost is time and money spent to optimize property information and images in OTAs and the GDS, because many OTA visitors and also travel agents end up calling. Again, when you talk to the frontline agents it is clear that the so-called “billboard effect” is not dead.
For argument’s sake, let’s take a conservative number of just $5.00 cost to generate each reservations inquiry call, and I would say that is very conservative indeed.
Now, let’s assume a hotel reservations agent makes $15 an hour, and plus taxes and benefits it is costing a hotel $20. At a call center, an agent might take 60 calls a day, so 7.5 an hour based on an 8-hour shift, so it is costing another $2.67 to field that $5 call. Now our imaginary hotel has $7.67 invested.
And what is the potential revenue that call can generate? Again this varies greatly by hotel type, location and segmentation. As an example, let’s take a transient ADR of $119 x a transient ALS of 1.33 nights, and that tells us that there is $158.27 at stake each time the phone rings.
Yet what happens? Besides being in the training business, KTN also conducts thousands of reservations calls each week both to our clients and also to comp-set hotels that are evidently not using training. What do we hear most often? I hear reservations and front desk agents responding to these high-cost, potentially high-value leads as if they are providing “tech support” for someone who needs help searching a website. Specifically, I hear our callers saying:
When you do the math as suggested above, here is what they should be saying:
Of course some callers will still hesitate. Some are honest and say they are going to shop around. Others say they have to check with their traveling companions - and if they are traveling with a large party of family and friends this might even be true! If your hotel is really committed to direct bookings and fully cognizant of both the investment in making the phone ring and in the revenue potential, then your agents should be following-up each phone inquiry by proactively sending an email. Here is an example of what they should say:
Next, they should trace the lead for follow-up from one to three days later and at that time make a follow-up phone call and the next day send one more brief email.
Organizing the follow-up action steps of a call and email takes some work on a process. It is certainly possible to test this by using a log book, Excel spread sheet or calendar tasks. However, if you are really committed you should check out TRACKPulse Hospitality Software www.trackhs.com They are sponsoring a webinar at Noon EST on Tuesday, March 13 during which I’ll share more insights on this topic. Here are the details.
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Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of hotel sales, guest service, reservations, and front desk training programs and telephone mystery shopping services for the lodging and hospitality industry. Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades. Since 1996, Doug’s monthly training articles have been published worldwide, making him one of the most widely read hospitality industry authorities. Visit KTN at www.kennedytrainingnetwork.com or email him directly firstname.lastname@example.org.
Doug is the author of “So You REALLY Like Working With People? - Five Principles for Hospitality Excellence.”
Contact: Doug Kennedy
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