Over the last 4 years we have trained thousands of hoteliers around the world in revenue management and distribution. All have made the same remarks; the travel industry is too price driven, the competition is driving down the price of the market. My question; what are you doing about it?
It is so easy to point the finger at the competition isn’t it? It is always the hotel next door which is destroying the market by offering better corporate or wholesale rates. They undercut your rate in their negotiation to steel market share, and it just drives down the rate.
Many hotel sales managers have been attending our training courses and seminars on hotel revenue management, and the attitude above is what we experienced mainly. If asked what they would do to keep a corporate account from taking their business elsewhere, almost always price was the solution at hand.
Hotel sales managers are weak. They seem not to be trained in sales skills. Their only tool is price. They have no backbone when it comes to the bluff poker game of negotiations. They are ill prepared and have no data intelligence at hand to make the right decisions. They have only one fear: loosing the account.
Where is our industry going? How come these sales people who are supposed to make our hotels money do not have the right skills and attitude? Are they not trained right? Are we hiring under qualified staff, due to payroll restraints. We better get our act straight because we are eroding the value of our hotels from within.
Below our Xotels’ view of how sales in hotels should work;
- Sales manager needs to have ‘balls’. He or she needs to have no fear of losing any account. Sales negotiations are like bluff poker; the other party will detect your fear and use it against you.
- Based on budgets and targets revenue management strategies are defined. Corporate rates are based on this. Corporate rate buckets are created.
- Accounts are analyzed on a monthly basis on production, stay patterns, commission costs, additional spending, and displacement.
- Based on account production and preset parameters a corporate rate bucket is assigned as part of an overall strategy.
- A thorough analysis of the strengths and weaknesses of competition has to be done. Sales managers need stay at competitor hotels to understand what they are up against. We need to copy the good from them and improve on our weaknesses.
- We need to brainstorm on how we can deliver more unique service than the competition. The difference is in the little things. Personal service is highly valued by business travelers!
- Just like with revenue management in corporate sales we have to add value instead of lowering rate. Free newspapers, office transfer, public transport ticket and free wifi are just a few of many options to package and add value to corporate offers.
- Go into sales meetings with your numbers, just like your opponent. Show him where he fits in your budget. This way you position yourself as the stronger negotiation partner. The corporate travel manager will understand that if he wants in, it will only be possible at the price you offered.
- Show no fear! If the corporate travel manager says he needs a better rate, simply reply that it does not fit in your budget. Saying no is the strongest strategy in a negotiation. Hold your ground!
- Any corporate account that wants a lower price then has been budgeted, signifies a loss of revenue, and will need to be replaced by other business. Simply lowering the rate will set your hotel up for failure.
Hope this will help to get your hotel sales process on the right track again.
For more information on Xotels please click here: hotel management company