1. Chapter 10: Sales & Marketing

2. Roles of Sales & Marketing Roles of Director of Sales & Marketing
Activities related directly to servicing consumer demand & booking clients
Marketing
Activities designed to increase consumer awareness & demand by promoting & advertising hotel
Roles of Director of Sales & Marketing
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
Question 1 in “Issues at Work” (Chapter 10) asks students to compare definitions of “sales” and “marketing” by referring to three other books devoted to the sales and marketing area. The text notes that sales is the process of servicing business currently identified while marketing seeks to generate new business.
Ask your students to define both sales and marketing in their own words; are your students able to distinguish sales from marketing?
Chapter 6 (The Front Office) discussed ways to maximize (improve) RevPar (revenue per available room) from the Front Office perspectives: 1) Estimate (forecast) guest demand for rooms, 2) Practice yield management, 3) control occupancy.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

3. Roles of Sales & Marketing: In the Hotel
Transient rooms
Influence
Front office
Group sale
Influence
Sales & Marketing
Tasks of Sales & Marketing staff with their group sales focus
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
Note that Sales and Marketing department plays a major role in selling group sales, while transient rooms are sold through Front Office efforts.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

4. 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
Involvement in the local business community (e.g. Chamber of Commerce) is presented as a sales opportunity (particularly promotion opportunity) for the hotel; Chamber of Commerce is an organization whose goal is the advancement of business interests within a community or larger business region.
Convention and Visitors Bureau (CVB) is an organization, generally funded by taxes levied on hotels, that seeks to increase the number of visitors to the area it represents.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

5. Segmentation of the Sales & Marketing Dept.
Segmentation based on:
By product(s) sold
product designations becoming sales specialty areas
By market (market segment)
type of guests (clients) who buy the product
By distribution network
“how” the hotel’s sales (products) are made (distributed)
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

6. Segmentation of the Sales & Marketing Dept.
Catered event
Group guest rooms
Conferences
By product sold
Meetings
Conventions
Weddings and special events
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

7. Segmentation of the Sales & Marketing Dept.
Business travelers (who pay highest room rates)
Corporate
Vacations, weddings, visits by friends and family, or non-work related reasons
Heavy reliance on travel agents’ advice
Leisure
By market (market segmentation)
Long-term stay
Guaranteed occupancy, ease of cleaning their rooms, relatively uncomplicated billing
Rooms often sold at very low daily rates
Social, military, educational, religious, or fraternal organizations
SMERF & Others
Sales and Marketing departments can be segmented based on type of guests who buy the product.
Text shows six characteristics AAA (American Automobile Association) evaluators rate: 1) exterior, grounds and public areas, 2) guestrooms and bathrooms, 3) housekeeping and maintenance, 4) room décor, ambiance and amenities, 5) management, 6) guest services ; based on these six characteristics, the book also presents what the AAA Diamond ratings represent from one diamond to five diamonds.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

8. Segmentation of the Sales & Marketing Dept.
Representative of corporations, groups and organizations
Using comparison-shopping techniques
Influence on hotel’s reputation
Meeting planners
Retailers, wholesalers or both
Using Global Distribution System
Receiving commission (5 – 20 %) from hotel
Travel agents
By distribution networking
Consortia
Largest customers of many hotels
Negotiated rate / blackout dates / pick-up
Fastest growing distribution channel
Creating homepages and linking them to other sites
Internet
Directors of Sales and Marketing structure their departments based on “ how” the hotel’s sales are made, namely the specific distribution channels used; distribution channel is a distinct and definable source of hotel rooms or services sales.
Consortia are groups of hotel service buyers organized for the purpose of reducing their client’s travel-related costs; a single such group is a consortium.
Negotiated rate is a special room rate, offered for a fixed period of time, to a specific client of the hotel.
Black-out dates are days on which the hotel will not honor a negotiated rate. Black-out dates should be identified at the same time the hotel and the client agree on a negotiated rate (e.g. New Year’s Eve).
Pick-up is the actual number of rooms used by a client in a defined time period.
Potential guest who arrives at hotel without an appointment
Drop-ins
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

9. Sales & Marketing Activities: Sales Efforts
Sales & marketing committee
Trace systems
Harmonizes efforts across department lines
Engages in long-term planning
Ensures cooperation of all in sales and marketing process
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
A G.M. normally acts as the Chair of Sales and Marketing Committee.
Sales and Marketing Committees are groups of individuals responsible for coordinating hotels’ sales and marketing efforts.
“Trace system” is a methodical process to record what was done in the past and what must be done in the future to maximize sales effectiveness; an effective trace system has the records of each individual client.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

10. Sales & Marketing Activities: Sales Efforts
The sales cycle
Pre-sale phase
Invite client to a site tour
Submit a bid
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
Sales phase
Inform students about what specific sales and marketing activities take place at the sales cycle; the lists of events associated with each cycle of sales (pre-sale phase, sales phase, post-sale phase) are not exclusive, but still give ideas of sales team activities (or of the Director of Sales and Marketing), based on the scenario in the text.
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
Post sale phase
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

11. Sales & Marketing Activities: Sales Efforts
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 lead – effective DOSM should discuss the followings:
Reserve adequate time for cold calling!
Good networking can create leads. Also, text emphasizes that a G.M. should be able to identify prospective clients for solicitation. Question 2 in “Issues at Works” in Chapter 10 asks how networking skills affect cold calling ability.
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
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

12. Sales & Marketing Activities: Sales Efforts
Client appreciation activities
Goals
Examples
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
Gala client appreciation event
Golfing, sporting events, concerts, theater tickets
Gift giving
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

13. Sales & Marketing Activities: Sales Efforts
Marketing plan development: format of marketing plan
A review of market competition
Occupancy trends /ADR trends / performance of own hotel
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
Explain the benefits of a marketing plan to the Sales and Marketing department and to entire hotel property.
Marketing plan is a calendar of specific activities designed to meet the hotel’s sales goals; activities included in a marketing plan involve analysis of own competition, analysis of own hotel, establishing prices, and publicizing hotel’s offerings through advertising, promotions and public relations activities.
Preparation of a marketing budget
Development of measurement & evaluation tools
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

14. Sales & Marketing Activities: Sales Efforts Effective advertising
Types of advertising
Effective advertising
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
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
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

15. Sales & Marketing Activities: Sales Efforts
Promotion
“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
Provide examples of promotion, such as a “Summer Getaway” promotion, to be marketed in winter.
Emphasize that the publicity costs the hotel nothing, and the publicity may be either good or bad; cultivating good relationships with the media is an important task of the G.M.
Text describes different scenarios to distinguish the terms of “marketing”, “advertising”, “promotion”, “publicity”, “public relations” and “sales”
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

16. Internet Sales & Marketing Online reservation system
Teaming of GDS with Internet
Impact
Travel agents: check availability, compare prices and book hotel on-line
Note that online booking sites are the fastest growing source of reservations in the hotel industry; this method is becoming popular because online is an inexpensive way to reach consumers directly
Online booking sites are fastest growing source of reservations in hotel industry
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

17. Sales & Marketing Activities: Websites
Effective hotel websites should:
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.
Effective use of websites allow hotel to take advantage of an inexpensive direct line to consumers.
Emphasize that measures of website effectiveness should be sales production (sales made), rather than sales calls (hits).
“Demand generator” means an organization, entity or location that creates a significant need for hotel services; Examples in a community include large businesses, tourist sites, sports teams, educational facilities and manufacturing plants.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

18. Internet Sales & Marketing : E-mail Systems
Traditional communication methods
Direct mailing, telephone, fax
Emerging communication methods
system
Advantages of systems
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
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

19. 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!)
A strong pace report shows that sales made by Sales & Marketing department are increasing on a monthly and / or annual basis while a weaker report shows they are declining or staying the same.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

20. Evaluating Sales & Marketing Department: Sample Pace Report
Waldo Hotel Group Rooms Pace Report for January, 200x
Sold this month
Total sold YTD
Sold same month last year
Total sold last YTD
Jan 25
150
Feb
450
750
250
550
Mar
1,550
330
1,250
Apr
650
1,350
May
875
1,175
1,050
June
1,100
1,400
800
1,700
July
2,250
2,150
Aug
2,900
1,500
1,900
Sept
500
700
1,750
Oct
300
Nov
850
1,150
600
Dec
200
125
225
Total
8,550
14,775
7,055
13,575
Show students how to evaluate bottom-line effectiveness of Sales & Marketing department by comparing Pace Report in any given month with the Pace Report of matching month in prior year.
Figure 10.2 in the text describes how to understand Pace Report, 200X; according to the example, the selling pace of the hotel for January, (8550 rooms) is up a total of 21 % ( 8,550 – 7,055 / 7,055 = 21.1 %) over last year (7055 rooms) and YTD (year to date) sales productivity of Sales & Marketing staff increases 8.1 % (14,775 – 13,575 / 13,575 = 8.1 %).
Address that the Pace Report tells management where future occupancy problems may exist. For example, Figure 10.2 in the text indicates that a potential problem exists in September (700 rooms this YTD vs YTD at same time last year), thus corrective management actions to increase sales in September should be taken.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

21. Evaluating Sales & Marketing Department: The Smith Travel Accommodations Report (STAR)
STAR working process and preparation
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!)
When an instructor explains how STAR is prepared, stress again that Smith only reports the aggregate results of the competitive set, not releasing information on an individual property or brand.
Competitive set is the group of competing hotels to which an individual hotel’s operating performance is compared.
Who are the STAR interest groups?
Hotel owners, management companies, property management, franchisers, appraisers, financial community
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458

22. Operating comparison criteria
Evaluating Sales & Marketing Department: The Smith Travel Accommodations Report (STAR)
Operating comparison criteria
Occupancy, ADR, RevPar, market share, historical trends, to-date performance, state or region
Goals
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.
Question 5 in “Issues at Work” (Chapter 10) asks students to discuss three positive and three negative factors involved in an analysis of a hotel’s monthly STAR; in addition, the question further asks what other performance indicators can one use to evaluate the hotel.
Hotel Operations Management, 1/e ©2004 Pearson Education Hayes/Ninemeier Pearson Prentice Hall Upper Saddle River, NJ 07458