How Do You Identify a Good Piece of Business?

By Liz Uber Vice President of Revenue Management, Pillar Hotels & Resorts | October 02, 2016

Finding "good" business is not enough, by itself, to ensure the long-term success of a hotel. Instead, you must find good business to bring to your property that is also the "right" business for that particular location.

Although this might sound like a fairly simple task, identifying the right business for the right hotel can, in fact, be a complicated endeavor. It involves a thorough evaluation of each opportunity, along with many fluid components at the property, and the market in which it is located. These factors can include the operations of individual departments within a property, the ever-changing demand in a particular market, whether or not you operate multiple properties within that same market, and what other business mix your property typically generates - including special events. Additionally, a hotel must consider how its other revenue management strategies are adjusted to ensure that it is driving the best and highest revenue for what remains once the "right" business is secured.

As many of us have experienced this year, predicting demand and the impact on new supply in our markets has been very challenging. When analyzing a piece of business, it is important that all of the key managers are involved. Depending on your hotel structure, this might include the General Manager, Director of Sales, Sales Manager, Director of Revenue Management, Inventory Specialist, Food & Beverage Manager, Front Office Manager, and Reservations Manager. There should be a correlation between the size of the business proposed and how much involvement you have from your key managers in the approval process for that particular piece of business.

That said, I prefer a "more the merrier" approach, meaning that I find it useful to have as many people contributing when at all possible, to ensure that all the angles are considered. The key word here is "contributing". If everyone is not available, or if meaningful contributions cannot be made by someone representing a particular department, I would stick with a 3-person minimum. I have usually found success with a piece of business when I have ensured that at least three other people have "signed-off" on it.

The benefit of having more rather than fewer individuals involved is each member of the team has a different perspective and conclusion on just what a particular piece of business will bring. The Front Office Manager might remember the group from years past, and remind the team they had to hire additional security for the hotel. Someone else on the team might have had an experience in a different market with the same group, and remember that high-speed internet access was a hot button for the group so the sales team needs to ensure they point that out in the proposal. Each person brings a new viewpoint and looks at opportunities differently. This can certainly be extremely helpful when evaluating potential business opportunities.

As the hotel team analyzes new business, there are several factors that need to be considered. Some key factors are length of stay, actuals from the year prior over those same dates, current demand and changes year-over-year, number of rooms (there is such a thing as too many rooms), opportunity for additional business long-term, how reservations are being made, who is paying for the rooms, and what other lodging is being considered. All of these factors are critical to ensuring the piece of business that is booked does not turn out to be the wrong piece of business.

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