chapter 7 sales and marketing. hotel operations management, 2nd ed.©2007 pearson education...

Chapter 7Sales and Marketing

Hotel Operations Management, 2nd ed. ©2007 Pearson EducationHayes/Ninemeier Pearson Prentice Hall

Upper Saddle River, NJ 07458

The Front Office

Manage hotel’s marketing efforts

Set rates to maximize RevParNegotiate sales contracts on behalf of hotel

Serve as a leader to hotel’s sales and marketing team

The Role of Sales and Marketing

SalesActivities related directly to servicing consumer demand and booking clients

Role of Director of Sales and Marketing:

MarketingActivities designed to increase consumer awareness and demand by promoting and advertising hotel

Identify and cultivate clients



Planning hotel’s sales and marketing strategyPreparing and issuing sales contracts in timely mannerMaintaining accurate sales records, forecasts, and histories

Coordinating and communicating special client requests with affected hotel departmentsHosting clients during their stayConducting site tours

Front Office

Sales and Marketing

The Role of Sales and Marketing: In the Hotel

Transient RoomsInfluence

Group SalesInfluence

Tasks of sales and marketing staff with its group sales focus:



The Role of Sales and Marketing: In the Community

Two sales opportunities:

Promotion Opportunities

When DOSM and Sales team are active members of the business community (e.g., local chamber of commerce), disseminating information about hotel’s products and services is allowed.

Development of personal relationships for business-related purposes will result in increased numbers of sales calls.– Convention and Visitors Bureau (CVB)

Networking Opportunities



Segmentation of the Sales and Marketing Department

Product designations becoming sales specialty areas

Segmentation based on:

Product(s) Sold

Market (Market Segment)

Distribution Network

Type of guests (clients) who buy the product

“How” the hotel’s sales (products) are made (distributed)



By Product Sold

Group Guest Rooms

Conferences

Catered Event

MeetingsConventions

Weddings and Special Events

Segmentation of the Sales and Marketing Department (cont.)



Guaranteed occupancy, ease of cleaning rooms, less complicated billingRooms often sold at very low daily rates

Vacations, weddings, visits by friends and family, or nonwork-related reasonsHeavy reliance on travel agents’ advice

Social, military, educational, religious, or fraternal organizations

Business travelers (who pay highest room rates)

Corporate

SMERF and Others

By Market (Market

Segmentation)Long-Term Stay

Leisure




Potential guests who arrive at hotel without appointments

Fastest-growing distribution channel Creating homepages and linking them to other sites

Largest customers of many hotelsNegotiated rate/blackout dates/pick-up

Retailers, wholesalers, or bothUsing Global Distribution SystemReceiving commission (5–20%) from hotel

Representatives of corporations, groups, and organizations

Use comparison-shopping techniquesInfluence on hotel’s reputation

Meeting Planners

Internet

By Distribution NetworkingConsortia

Travel Agents

Drop-Ins




Maintain record (e.g., demographic data) of hotel’s past, current, and prospective clients

Help department maintain its sales records, meet deadlines, and plan future activities

Harmonizes efforts across department lines

Engages in long-term planning

Ensures cooperation of all in sales and marketing process

Sales and Marketing Activities: Sales Efforts

Sales and Marketing Committee

Trace Systems



The Sales Cycle

Presale Phase

Sales and Marketing Activities: Sales Efforts (cont.)

Invite client on a site tourSubmit a bid

Postsale Phase

Complete “Request for Proposal,” and submit on timeEstablish room ratesPrepare group contract (attrition and cancellation policy)Forward direct bill application to groupEstablish group blockDetail client’s contracted requirementsMonitor client’s blockAttend pre-event sales meeting of hotel staff

Write thank-you note to each groupReview the final billInclude that group in the hotel’s preferred client databaseFile all written reports

Sales Phase



Make a sales visit/presentation to potential clients without having previously set an appointment to do so

Visit/call quality prospective clients for hotel’s rooms/services

New leads uncovered since last meeting

Realistic sales potential of these leads

Who in the department is following up on leads

How leads will be pursued

What, if anything, GM can do to help cultivate prospect

Any sales resulting from leads discussed previously

Sales lead: Effective DOSM should discuss the following:

Reserve Adequate Time for Cold Calling!




Gala client appreciation event

Golfing, sporting events, concerts, theater tickets

Gift-giving

Solidify business relationship with current clients (allow hotel to express gratitude to clients for current business)

Communicate to potential clients the seriousness with which the hotel views the hotel/client relationship

Goals Examples

Client Appreciation Activities




A review of market competition

Occupancy trends /ADR trends / performance of own hotel

Marketing Plan Development: Format of Marketing Plan

Sales and Marketing Activities: Marketing Efforts

Competitive analysis of your competitor

Strengths / weaknesses / price structure

Competitive analysis of your own hotel

Strengths / weaknesses / price structure

Forecast of future market conditions

Estimated market growth or contraction / performance goals and objectives for own hotel / timeline for achieving these goals and objectives

Determination of specific marketing strategies and activities

Advertising / public relations / promotions

Preparation of a marketing budget

Development of measurement and evaluation tools



Eye- or ear-catching

Memorable

Sells the hotel’s features

Cost-effective

Does not become quickly outdated

Reflects positively on hotel’s image

Can be easily directed to the hotel’s core client groups

Exterior signage

In-hotel and in-room signage and materials

Radio or television commercials

Direct mailing

Internet banners

E-mail messages

Yellow Pages

Franchiser-supplied advertising vehicles (directories, co-ops, etc.)

Billboards

Personal contact

Sales and Marketing Activities: Marketing Efforts (cont.)

Types of advertising: Effective advertising:

Advertising



Promotions“Special” packaging of products or servicesPromoted and disseminated by advertising and publicity

Publicity

Information about hotel distributed free of charge to the mediaCosts the hotel nothingMay be either good or bad

Public Relations

(PR)

Activities ensuring hotel has a positive public image (good citizen of the community)Hosting charity events, contributing cash or in-kind services, donation of hotel staff time for worthy cause

Sales and Marketing Activities: Marketing Efforts (cont.)



Teaming of GDS with Internet

Sales and Marketing Activities: E-Marketing

Online Reservation Systems

Impact

Travel agents: check availability, compare prices, and book hotel online

Online booking sites are the fastest growing source of reservations in the hotel industry.



Characteristics of effective hotel Web sites:

Easy to navigateInclude some level of interactivityLink to appropriate companion sitesAllow for online bookingBalance guest privacy needs with hotel’s desire to build a customer baseAllow for easy updating and revising of room ratesInclude a virtual tour of the propertyComplement other marketing effortsIn language(s) of potential clientsEasy-to-remember addresses

Sales and Marketing Activities: E-Marketing (cont.)



Inexpensive to send to many current and potential clients

Has attachment feature function to move documents quickly

Automatically updates user database

Can disseminate special rates, promotions, and new hotel features to its client list

Traditional Communication Methods

Direct mailing, telephone, fax

Emerging Communication Methods

E-mail systems

Advantages of e-mail systems:

Sales and Marketing Activities: E-Marketing (cont.)

E-mail Systems



The Pace report:

Summarizes confirmed (group) sales made by the sales and marketing department

Can be prepared based on number of rooms sold, value (in dollars) of sales made, or both

Can also include any period of time in the future

Tells hotel’s owner and management the potential sales volume generated by the sales and marketing department

However, does not indicate what actual sales volume should be (STAR report does!)

Sales and Marketing Activities: Evaluating the Sales and Marketing Effort



Sold This Month Total Sold YTDSold Same Month

Last YearTotal Sold Last

YTDJan 25 150Feb 450 750 250 550Mar 550 1,550 330 1,250Apr 650 1,550 550 1,350May 875 1,175 650 1,050June 1,100 1,400 800 1,700July 1,350 2,250 1,100 2,150Aug 1,700 2,900 1,500 1,900Sept 500 700 750 1,750Oct 300 800 550 1,050Nov 850 1,150 300 600Dec 200 550 125 225

Total 8,550 14,775 7,055 13,575

Waldo Hotel Group Rooms Pace Report for January, 200X

Sales and Marketing Activities: Evaluating the Sales and Marketing Effort (cont.)



Hotel voluntarily submits financial data to SmithSmith maintains confidentiality of all individual hotel dataCombines operating data submitted by selected competitorsAn individual hotel’s operating performance is compared to that of its competitive set. (Understanding the competitive set is a key component of understanding STAR!)

STAR working process and preparation:

Hotel owners, management companies, property management, franchisers, appraisers, and the financial community

Who are the STAR interest groups?


The Smith Travel Accommodations Report (STAR)



Operating Comparison Criteria

Goals

Occupancy, ADR, RevPar, market share, historical trends, to-date performance, state or region

Assess performance of sales and marketing department as well as the entire property

Know the strength of hotel and sales and marketing staff’s sales results, in comparison with selected competitors


The Smith Travel Accommodations Report (STAR) (cont.)

chapter 7 sales and marketing. hotel operations management, 2nd ed.©2007 pearson education...

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