Mr. Pedersen

Revenue Management

Maximizing Direct Sales Force Revenue

By Glenn Pedersen , President, Encore Enterprises

How are you monitoring your direct sales force efforts? Who do you count as a member of the sales team? How often are you validating their effectiveness and what are the measurement criteria you are using? Who is interacting with the sales team on a daily, weekly and/or monthly basis? How often does the sales team speak with the revenue management team? Who is on the Revenue Management Team? The answers to each one of these questions can be the difference between success and failure, between REVPAR growth or lost business.

Most of the sales teams I have had the pleasure of working with want to do a good job. Our Sales Managers are no different than any other Manager or associate in our hotels, they want their hotel to succeed as a result of their efforts and want to be able to point to their relationships and sales abilities as the key to the success of the hotel. One way to help the sales team achieve your goals is to have a structured direct sales approach to the Sales and Marketing Department.

There are many platforms that our revenue managers have at their disposal to perform their jobs. When utilized, based upon historical data, the Revenue Managers are able to project with confidence, what occupancy levels the hotel will enjoy over the next year. The next step will be to overlay both definite and tentative bookings from the sales team. Once completed, this will allow the hotel to identify the peaks and valleys of occupancy each month over the coming year: this should serve as the basis for our annual budgets. Throughout the year, the peaks and valleys will fluctuate based upon the dynamics of our industry: booking pace, attrition with group bookings and the impact of transient demand and its relatively short booking window. Good Revenue Managers will combine this information and “package it” in such a fashion that is easy to understand and use, by every department in the hotel: in particular the sales and marketing department.

The Director of Sales and Marketing, in conjunction with the Revenue Manager and the General Manager should set target goals for the sales team down to how many group rooms should be/can be booked on any given day in the year and what rate they can offer. This also applies to Locally and Nationally negotiated rates (LNR’s and RFP’s). Meetings can be held weekly and if face to face meetings are not possible, then “Go To Meetings” are always an option. However, it is done, stick to an agreed upon time and Agenda and hold the meetings: the time invested by everyone WILL pay off. I also recommend the meetings be held either before or after the “sales window” for the day and include the General Manager, Director of Sales and Marketing, Sales Managers, Revenue Manager and Front Office Manager (if applicable). Allow the sales team the optimal amount of time to interact with their customers during the peak times of the day. Being in a meeting at 10:00am diminishes selling opportunities. These meetings, if structured correctly should not last more than 1 hour, have projections for the next 3 to 6 months and project day to day occupancies. The agenda should include reviewing definite and tentative bookings along with meeting rooms’ usage and catering sales (if applicable). Also important to discuss is what rates the sales team can quote on any given day.

In our industry we often give the largest discount to the smallest room night producers: discipline in quoting rates, advance planning and following the revenue management guidelines are keys to the success of the hotel. As an example, historically, Tuesday and Wednesday night are our peak occupancy nights. We should not allow anyone to sell any discounted rooms over these days (sales team or front desk) and based upon booking patterns, have already set a daily goal of room nights for the sales team to sell. It is very easy, to take “the bird in the hand” booking because it feels good. Unfortunately, that feeling may not last long especially if we displace higher priced room nights at the expense of “feeling good”.

There are many predictions for REVPAR increases in 2011. Forecasters have predicted 2011 REVPAR improvement anywhere from 4% increase to 10% increase: these projections apply across all Brands as well as all Markets. Your market may be better it may be worse. But just waiting for the business to come to you may result in leaving market share gains to be absorbed by your competitors. How well you do will depend on how much attention is being given to maximizing your direct sales force revenue. If your hotel does not have a dedicated Sales Manager, your front desk staff can become your Direct Sales Force. Have your front desk staff start a telemarketing campaign. During slow times on the front desk, they can call local business demand generators. They can set up property tours, they can respond to Convention and Visitor Bureau inquires for room blocks. They can and do handle individual reservations and most Property Management Systems today, can provide reports that track top room night producers for your hotel. The front desk staff ARE sales people and in the absence of trained sales managers, can be your sales force and can do an effective job without ever having to leave the hotel.

The use of and establishing Incentives and Bonuses are well known in our industry. Usually, they are reserved for the Direct Sales Managers and General Managers. Again, the Front Desk staff can play a role in bonuses and incentives. How many times on any given shift does the desk clerk have an opportunity to “up-sell” to a better room type, better view or even a suite? Put an incentive in place for “up-selling” of rooms and see how quickly this can increase revenues. How often could those last two or three rooms be sold to ensure a “perfect sell out”? Give the desk staff a reason to care about increasing revenues. Give them a chance to share in the success and some of the side benefits could mean higher retention, longer tenure associates and happy guests.

Celebrating successes in a timely manner always lets everyone feel good about their efforts and hard work. In the weekly meetings it should be easy to determine whether or not our strategies worked and what could be done differently next month to enhance success. Validating this success and involving everyone on the sales team and Revenue Management Team will go a long way to obtaining the commitment to follow the blueprint for revenue management. When we recognize individual as well as team achievements, this goes a long way in enforcing the desire of our plans. The General Manager, Director of Sales and Marketing, Sales Managers, Revenue Managers and Front Office Manager and Front Desk Staff, are the Revenue Management Team, and by clearly communicating goals and working together a hotel can achieve much success.

Glenn Pedersen began his career as President of Pineapple Management Services in 1994. His responsibilities were to oversee hotel development, construction, design and management, including contract negotiations, guest and employee satisfaction, capital expenditure planning, budgeting and the day-to-day operations of all hotels. Mr. Pedersen has been involved in the hotel industry for over 34 years, starting out his career as a Front Office Manager of the Royal Sonesta Hotel in New Orleans, Louisiana in 1976. Mr. Pedersen can be contacted at 214-259-7018 or gpedersen@encore.bz Extended Bio...

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