1. Chapter 7 Sales and Marketing

2. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 The Front Office 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 and marketing team The Role of Sales and Marketing Sales Activities related directly to servicing consumer demand and booking clients Role of Director of Sales and Marketing: Marketing Activities designed to increase consumer awareness and demand by promoting and advertising hotel Identify and cultivate clients

3. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 Planning hotel’s sales and marketing strategy Preparing and issuing sales contracts in timely manner Maintaining accurate sales records, forecasts, and histories Coordinating and communicating special client requests with affected hotel departments Hosting clients during their stay Conducting site tours Front Office Sales and Marketing The Role of Sales and Marketing: In the Hotel Transient Rooms Influence Group Sales Influence Tasks of sales and marketing staff with its group sales focus:

4. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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

5. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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)

6. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 By Product Sold Group Guest Rooms Conferences Catered Event Meetings Conventions Weddings and Special Events Segmentation of the Sales and Marketing Department (cont.)

7. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 Guaranteed occupancy, ease of cleaning rooms, less complicated billing Rooms often sold at very low daily rates Vacations, weddings, visits by friends and family, or nonwork-related reasons Heavy 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 Segmentation of the Sales and Marketing Department (cont.)

8. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 Potential guests who arrive at hotel without appointments 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 Representatives of corporations, groups, and organizations Use comparison-shopping techniques Influence on hotel’s reputation Meeting Planners Internet By Distribution Networking Consortia Travel Agents Drop-Ins Segmentation of the Sales and Marketing Department (cont.)

9. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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

10. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 The Sales Cycle Presale Phase Sales and Marketing Activities: Sales Efforts (cont.) Invite client on a site tour Submit a bid Postsale 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, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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! Sales and Marketing Activities: Sales Efforts (cont.)

12. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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 GoalsExamples Client Appreciation Activities Sales and Marketing Activities: Sales Efforts (cont.)

13. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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 budgetDevelopment of measurement and evaluation tools

14. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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

15. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 Promotions “Special” packaging of products or services Promoted and disseminated by advertising and publicity Publicity Information about hotel distributed free of charge to the media 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 Sales and Marketing Activities: Marketing Efforts (cont.)

16. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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.

17. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 Characteristics of effective hotel Web sites: Easy to navigate Include some level of interactivity Link to appropriate companion sites Allow for online booking Balance guest privacy needs with hotel’s desire to build a customer base Allow for easy updating and revising of room rates Include a virtual tour of the property Complement other marketing efforts In language(s) of potential clients Easy-to-remember addresses Sales and Marketing Activities: E-Marketing (cont.)

18. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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

19. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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

20. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 Sold This MonthTotal Sold YTD Sold Same Month Last Year Total Sold Last YTD Jan25150 Feb450750250550 Mar5501,5503301,250 Apr6501,5505501,350 May8751,1756501,050 June1,1001,4008001,700 July1,3502,2501,1002,150 Aug1,7002,9001,5001,900 Sept5007007501,750 Oct3008005501,050 Nov8501,150300600 Dec200550125225 Total8,55014,7757,05513,575 Waldo Hotel Group Rooms Pace Report for January, 200X Sales and Marketing Activities: Evaluating the Sales and Marketing Effort (cont.)

21. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 Hotel voluntarily submits financial data to Smith Smith maintains confidentiality of all individual hotel data Combines 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 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? Sales and Marketing Activities: Evaluating the Sales and Marketing Effort (cont.) The Smith Travel Accommodations Report (STAR)

22. Hotel Operations Management, 2nd ed.©2007 Pearson Education Hayes/NinemeierPearson Prentice Hall Upper Saddle River, NJ 07458 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 Sales and Marketing Activities: Evaluating the Sales and Marketing Effort (cont.) The Smith Travel Accommodations Report (STAR) (cont.)