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Chapter 10: Sales & Marketing. Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458.

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Presentation on theme: "Chapter 10: Sales & Marketing. Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458."— Presentation transcript:

1 Chapter 10: Sales & Marketing

2 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ The Front Office Identify and cultivate clients Manage hotel’s marketing efforts Set rates to maximize RevPar Negotiate sales contracts on behalf of hotel Serve as a leader to hotel’s sales & marketing team Roles of Sales & Marketing Sales Activities related directly to servicing consumer demand & booking clients Roles of Director of Sales & Marketing Marketing Activities designed to increase consumer awareness & demand by promoting & advertising hotel

3 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Planning hotel’s sales and marketing strategy Preparing and issuing sales contracts in timely manner Maintaining accurate sales records, forecast and histories Coordinating and communicating special client requests with affected hotel departments Hosting clients during their stay Conducting site tours Front officeSales & Marketing Roles of Sales & Marketing: In the Hotel Transient rooms Influence Group sale Influence Tasks of Sales & Marketing staff with their group sales focus

4 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Roles of Sales & 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 info about hotel’s products and services is allowed. Networking opportunities Development of personal relationships for business-related purposes will result in increased numbers of sales calls. - Convention and Visitors Bureau

5 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Segmentation of the Sales & Marketing Dept. product designations becoming sales specialty areas Segmentation based on: By product(s) sold By market (market segment) By distribution network type of guests (clients) who buy the product “how” the hotel’s sales (products) are made (distributed)

6 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ By product sold Segmentation of the Sales & Marketing Dept. Group guest rooms Conferences Catered eventMeetingsConventions Weddings and special events

7 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Guaranteed occupancy, ease of cleaning their rooms, relatively uncomplicated billing Rooms often sold at very low daily rates Vacations, weddings, visits by friends and family, or non-work related reasons Heavy reliance on travel agents’ advice Social, military, educational, religious, or fraternal organizations Business travelers (who pay highest room rates) Corporate SMERF & Others By market (market segmentation) Long-term stay Leisure Segmentation of the Sales & Marketing Dept.

8 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Potential guest who arrives at hotel without an appointment Fastest growing distribution channel Creating homepages and linking them to other sites Largest customers of many hotels Negotiated rate / blackout dates / pick-up Retailers, wholesalers or both Using Global Distribution System Receiving commission (5 – 20 %) from hotel Representative of corporations, groups and organizations Using comparison-shopping techniques Influence on hotel’s reputation Meeting planners Internet By distribution networking Consortia Travel agents Segmentation of the Sales & Marketing Dept. Drop-ins

9 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 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 & Marketing Activities: Sales Efforts Sales & marketing committee Trace systems

10 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ The sales cycle Pre-sale phase Sales & Marketing Activities: Sales Efforts Invite client to a site tour Submit a bid Post sale phase Complete “Request for Proposal” and submit on time Establish room rates Prepare group contract (attrition and cancellation policy) Forward Direct Bill application to Group Establish group block Detail client’s contracted requirements Monitor client’s block Attend pre-event sales meeting of hotel staff Write thank you note to each group Review the final bill Include that group in the hotel’s preferred client database File all written reports Sales phase

11 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Make a sales visit / presentation to potential client 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, G.M. can do to help cultivate prospect Any sales resulting from leads discussed previously Sales & Marketing Activities: Sales Efforts Sales lead – effective DOSM should discuss the followings: Reserve adequate time for cold calling!

12 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 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 Sales & Marketing Activities: Sales Efforts GoalsExamples Client appreciation activities

13 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ A review of market competition Occupancy trends /ADR trends / performance of own hotel Marketing plan development: format of marketing plan Sales & Marketing Activities: Sales 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 & activities Advertising / public relations / promotions Preparation of a marketing budgetDevelopment of measurement & evaluation tools

14 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Eye or ear catching Memorable Sell the hotel’s features Cost effective Does not become quickly outdated Reflect 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 message Yellow pages Franchiser-supplied advertising vehicles (directories, co-ops, etc.) Billboards Personal contact Sales & Marketing Activities: Sales Efforts Types of advertisingEffective advertising Advertising

15 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Promotion Sales & Marketing Activities: Sales Efforts “Special” packaging of products or services Promoted and disseminated by advertising and publicity Publicity Information about hotel, media-distributed free of charge Costs the hotel nothing May 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

16 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Teaming of GDS with Internet Internet Sales & Marketing Online reservation system Impact Travel agents: check availability, compare prices and book hotel on-line Online booking sites are fastest growing source of reservations in hotel industry

17 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Effective hotel websites should: Sales & Marketing Activities: Websites be easy to navigate. have some level of interactivity. be linked to appropriate companion sites (demand generator). allow for online booking. balance guest privacy needs with hotel’s desire to build a customer base. update and revise room rates easily on the website. include a virtual tour of the property. complement other marketing efforts. be in language(s) of potential clients. have website address easy to remember.

18 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ The Front Office Inexpensive to send to many current and potential clients. Has attachment feature function to move documents quickly. Automatically updates user database Can disseminate special rate, promotion, new hotel feature to its client list Internet Sales & Marketing : Systems Traditional communication methods Direct mailing, telephone, fax Emerging communication methods system Advantages of systems

19 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Pace report Evaluating Sales & Marketing Department: Pace Report Is a document summarizing confirmed (group) sales made by Sales and Marketing dept. 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 Sales and Marketing department However, does not indicate what actual sales volume should be (STAR report does!)

20 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Evaluating Sales & Marketing Department: Sample Pace Report Sold this monthTotal sold YTD Sold same month last year Total sold last YTD Jan25150 Feb Mar5501, ,250 Apr6501, ,350 May8751, ,050 June1,1001, ,700 July1,3502,2501,1002,150 Aug1,7002,9001,5001,900 Sept ,750 Oct ,050 Nov8501, Dec Total8,55014,7757,05513,575 Waldo Hotel Group Rooms Pace Report for January, 200x

21 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Hotel voluntarily submits financial data to Smith Smith maintains confidentiality of all individual hotel data Combine operating data submitted by selected competitors An individual hotel’s operating performance is compared to that of its competitive set (understanding the competitive set is key component of understanding STAR!) STAR working process and preparation Evaluating Sales & Marketing Department: The Smith Travel Accommodations Report (STAR) Hotel owners, management companies, property management, franchisers, appraisers, financial community Who are the STAR interest groups?

22 Hotel Operations Management, 1/e©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ Operating comparison criteria Evaluating Sales & Marketing Department: The Smith Travel Accommodations Report (STAR) Goals Occupancy, ADR, RevPar, market share, historical trends, to-date performance, state or region Assess performance of Sales & 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.


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