Mr. Rajagopal

Sales & Marketing

Five Top Corporate Travel Sales & Marketing Tactics

By Venkat Rajagopal, Professor, Pacific International Hotel Management School

Corporate or business travellers, though fewer in numbers are a very lucrative segment of the accommodation sector. It is estimated that 34 to 35% of the hotel revenue is generated by corporate travellers. The accommodation managers must be able to understand this properly and use necessary sales and marketing tactics to attract this segment to the maximum extent possible, to achieve good yield per room occupied. The author in this article has identified five (5) top tactics to attract this segment which are, Offering Competitive Corporate Rates, Good Service, Added Facilities, Home Away from Home Concept, Relationship Marketing coupled with a good understanding that corporate is not necessarily multi national or conglomerate...

Corporate or business travellers as they are known though fewer in numbers, make use of hotel accommodation more than other segments of travellers. Hotel managers must be able to identify this segment and tailor their products and services accordingly so that they can increase the room occupancy and the yield. Corporate travellers belong to a very broad segment and are much sought after by most accommodation providers, irrespective of how big or small a group they are. This is because the needs and objectives of corporate travellers are greater compared to other segments of the hotel such as free individual traveller, packages, charter groups etc. Corporate events and meetings are held throughout the year involving as few as fifty to sixty attendees for a mini workshop, to more than one thousand attendees (stake holders) for an annual general meeting. The decision making authorities in a corporate sector involve less people, thereby the decisions are taken very rapidly since it does not involve a group of individuals as compared to big association. Corporate planners are mostly concerned about the quality of the rooms, service, facilities and their ability to negotiate a good corporate rate.

When people think about travel, what comes to mind immediately is taking a break from the routine, checking into a hotel to relax by the side of the pool, or explore new places and culture in order to return back home refreshed. In short, people tend to equate tourism with leisure travel. However there is another side to travel and accommodation. Corporate or Business travel covers everything from a medical or sales representative, to government agencies, NGO’s, and entertainment companies going abroad to shoot films in a foreign location. All have become a part and parcel of the term “Corporate traveller”. It is wrong to presume that corporate travellers only belong to multi national companies or conglomerates. It could be a sole trader or even a single partner of a partnership firm. These people travel for various purposes either to sign a contract for a new business or to terminate the existing contract. They may attend a seminar, conference, visit a trade exhibition or to find a suitable location to shoot a big budget film. The type of accommodation ranging from staying in a bed and breakfast to corporate magnates staying in five star deluxe hotels. It is wrong to surmise that since the segment of corporate or business travellers are less in number compared to other segments, they bring less revenue. While 80% of the hotel revenue is generated by 20% of its customers, it is estimated that 34 to 35% of the hotel revenue is generated by business travellers.

Offer Competitive Corporate Rates

Corporate travellers do not owe their allegiance to any particular group or segment of a hotel or accommodation. Most hotels offer a competitive rate to companies to lure them to come and stay with them, with the result most hotels offer such rates to any one and sundry who requests for corporate rate, irrespective whether such a customer is really corporate oriented or not? The star graded hotels which enjoy the privilege of corporate guests will have to be more competitive both in terms of rates and the services it offers to the corporate travellers. The corporate travellers are most sought after segment in the industry because they pay a rate which is more than the group rate. The revenue generated from this segment is not only restricted to room rate but also the revenue generated from food and beverage, laundry, business centre facilities , health club facilities etc.

The current trend is, small and budget hotels have also started targeting the corporate traveller segment. What is even more significant is the multinational companies and corporate giants have started to make use of small and budget hotels for their staff simply for the reason that such hotels are lower priced, equally competitive , but at the same time not lacking in service that is usually expected out of a star hotel. When the whole world is reeling under recession, the corporations are looking at all means to save as much as possible by purchasing accommodation and service at as lower price as possible. Since the economic recovery is a slow process it is unlikely that corporate rates will be increased by any accommodation provider, until the demand is strengthened. In a situation like this the corporate travellers will not only try to keep the rates at low level but also negotiate further on the house discounts such as free airport transfers, bed to including breakfast etc. Times have changed the philosophy of accommodation sector. They have to change for the better since the star hotels are no longer able to dictate the price.

Quality Service

It is important that the hotel management or the accommodation provider understand the needs of this segment of business and improve their products and services to suit the segment accordingly. While most of the corporate travellers would expect minimum services such as a clean room, good service etc they can be repeat guests. They can become loyal guests and the revenue and growth from this segment can be achieved only by offering quality product coupled with good service and extended facilities at a competitive price that is affordable to the buyer. It is important for management to understand what is the perception of service quality in the minds of its customers vis-a-vis what the management thinks to be service quality. In order to create and maintain a good quality service as a competitive tool, the management has to have a strategy. A well managed quality service will ultimately result in customer satisfaction that will eventually make them loyal guests.

Added Facilities

However competitive the corporate rates are including good quality service offered, added facilities can attract more corporate travellers. A decade ago the hotels used to keep the letter heads of the corporate travellers in their rooms at the time of check in to enable the guests to conduct their business activities with minimum interruption. Today it is an electronic age. The corporate traveller expects internet facility such as broadband or wireless. If the accommodation provider could offer a laptop while the guest checks in such a facility would amount to going an extra mile of service. The guest is expected to bring only the memory stick with them. Similarly an entertainment company which could be a part of any corporate or conglomerate that has hired a substantial number of rooms for its group in the hotel may be provided with local technicians, and extra crew as may be required to shoot their programmes successfully, of course at an extra cost. This would amount to extra facility given to the clientele, who is saved from the trouble of finding the required manpower locally through an agent who could charge them a fat commission for such rendering such services.

Home Away From Home

The concept of corporate housing is also becoming widely well known among the corporate magnates. The housing could be apartments, studios which are both furnished and serviced. Service is provided to the corporate traveller to feel home away from home which combines a business atmosphere with leisure tourism for the family to enjoy, while the corporate traveller is busy with corporate business. Upon request, these apartments set up a home office in the room including a multiline phone connection, printer, fax machine and related office supplies with an exceptional hospitality desk offering excellent customer service. This makes it easier for the corporate traveller to focus on their work. These apartments are larger than most of the normal hotel rooms with separate living, dining and sleeping with good housekeeping facilities. Such accommodations have been quite cost effective in the sense the corporate traveller does not have to buy meals from any restaurant since there is a well equipped kitchen too.

Relationship Marketing

The current trend in hospitality and tourism marketing is, relationship marketing which is different from traditional marketing. While traditional marketing was restricted to sale of a product and service which was merely a business transaction resulting in $ $, relationship marketing is more personal in the sense, it not only creates and maintains guests, but also builds a strong bond or relationship with the guests for now and the future. The driving force for the development of relationship marketing over traditional marketing has come from better quality services combining potential benefits for the hotel and the guests. This strong bond is possible only when the hotel is in constant and continuous touch with the customer, with the result such constant and continuous contact results in customer value which in turn enables the hotel to find out more ways to develop and foster better values.

To achieve this you have to be technologically advanced and be in constant touch with the corporate travellers, both personally and emotionally, since emotional participation satisfies the behavioural part of the guest.All accommodation providers, who want to market for this segment successfully to achieve good yield per room occupied, will have to consider these aspects carefully, and deliver the same to the utmost satisfaction of their guests.

Venkatraman Rajagopal known as Venkat is currently a lecturer teaching hospitality and tourism management subjects at Pacific International Hotel Management School in New Plymouth, New Zealand. Mr. Rajagopal holds a degree in Commerce, a Masters in Business Administration and a Masters in International Hospitality Management. With more than 20 years experience in the hospitality industry, Mr. Rajagopal has worked his way up in all departments of the industry, holding senior management positions such as Director of Finance, Director of Food and Beverage and General Manager. Mr. Rajagopal can be contacted at 64 9 8350535 or venkatr@pihms.ac.nz Extended Bio...

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