Hotel Online Special Report


Hotel Common Sense
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Identifying Your Customers

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by John Hogan, MBA CHA MHS CHE, April  2004
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“I talk and talk and talk,  and  I haven't taught people in 50 years  what my father taught by example in one week.
Mario Cuomo, former Governor, New York
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When Howard Feiertag and I began planning to offer the industry a conversational style resource that addressed hotel sales, we spent many hours discussing what needed to be included. A wide range of topics was discussed, but we both agreed that we needed to begin with the very first rule in selling, which is often overlooked or mistakenly assumed.

Chapter one of  - LESSONS FROM THE FIELD: A COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES - identified that first rule.

Do you recall what that rule is?

Hint:  it is the often the difference between success and struggling.  It can be the difference between losing money and profitability in almost any economic cycle.

The rule:  Identifying your customers

The commitment of dedicated service providers means delivering a product or service.  The intent of what we hoped would be in a user friendly resource was to offer insight and options into the sales efforts of those products and services.

We find it astonishing when we ask hoteliers who their customers are and they say "everyone."  While hotels do service "everyone", the fact is that there are very few (if any) hotels that can honestly cater to all markets well, profitably and attentively.

The basics may be defined like this: the hospitality industry offers and rents overnight accommodations and services.  Since "everyone" needs overnight lodging at some point, everyone is a potential customer, right?  No, wrong!  Maintaining profit margins (while improving in the late 1990s, dipping in the 2000-2002 cycle and regrouping again in 2004) has been compared to require the agility and flexibility of a gymnast walking a balance beam. 

National (and now truly global) companies have done their best to insure market saturation to be "all things to all people."  Franchise companies today dominate control of the brands known to most travelers and it is becoming more difficult to track ownership of brands and notable distinctions between brands.

Full service, mid-price range hotels (like many Best Westerns, Holiday Inns, Marriott Courtyards, Four Points, many Days Inns and Quality Inns,  etc.) come perhaps closest to offering what most people need and want. Even within those brands, there are tremendous ranges of rates, specifics of services, staff capabilities and more.

Who are your customers? 

They must be identified literally daily, as most use our services for a short period of time (usually less than three days, unless you are in a resort or extended-stay property).  They must have easy access to learning about your services, be able to confirm their request (frequently sight unseen by both parties) through a growing range of mediums (Central Reservation Offices, the Internet, travel partners like airlines, car rentals, travel agents, tour brokers, corporate and in-house travel managers, affinity services and programs that resell at deep discounts). 

In addition, there is one more means of access - directly with your hotel.  That is what this column and LESSONS FROM THE FIELD is about – the direct contact.

Knowing who your customers are requires recognizing what they want and need quickly or often even before they do.  Southwest Airlines made air travel affordable for many who had never traveled by air regularly by looking at customer frustrations (delays, poor airline food, expensive tickets, confusing routes) and by overcoming them.  Hampton Inns was able to launch its brand in the most challenging of times in our industry (the late 1980s-early 1990s) by convincing its franchisees that the 100% Guarantee program would be as effective as it has been.  Both of these companies (and others) listened to what other people's customers were saying and did something about it. Many more airlines and hotel companies have continued to do what they have always done and watched as their market share and customers were literally "stolen" by solid product and effective salesmanship.

Herb Kelleher, founding CEO of Southwest Airlines, was often described in almost every business publication as a “maverick”, an independent spirit and a sales person with incredible drive and initiative.  Now retired Hampton Inns CEO Ray Shultz learned the lesson from the 1980’s less-than-successful Holiday Inns "No Surprises" program. (Shultz was with Holiday Inns at the time of that program.)

"No Surprises” was not successful because the Holiday Inn franchisees were "told" they would participate in the program.  Many of them did not embrace the idea and it was short-lived.

Ray, on the other hand, "sold" the concept of Hampton Inn’s 100% Guarantee as a personal commitment to be made by existing and prospective franchisees for it to work. Other companies had tried variations of this before, but no one had tried to make it part of the "culture" of a major company in the hospitality field.  Today, a number of service providers have found this commitment to be an essential part of their sales message.  It is not the guarantee itself that is the key – it is paying attention to the needs of customers regularly.

Southwest is a profit and satisfaction leader in its’ industry in a number of key indicators, but a major difference is that Southwest can follow one set of business strategies because it operates as one company.  The load factor (occupancy in our jargon) is very high for Southwest.  This does not come automatically, as can be attested by the many struggling airlines today.

Southwest tracks by flight, location, time of day, booking trends in lead times and more.  They analyze their costs and break-even factors.  They apply discounts generously but strategically.  They do not use lower fares unless it stimulates business to an off-peak period or at a time when they need it.

Hotels need to look at things a bit differently.  Most hotels are franchised and independently operated.  We all know the high demand of the World Series, Mardi Gras, the University graduation, etc. Yet, do we factually track the trends and see if Saturday has the higher demand on weekends, or do we assume it is because it “always was”?

Trends change and paying attention to shifts in training programs or contract business, tour arrival patterns, senior or snowbird travel and each of your other markets can all make unbelievable and quick changes in your profitability and ability to give service. 


Think Tank 
The very first rule in selling

Questions of the day

These questions are offered to stimulate discussion about the way we do business.  There is not necessarily only one “correct” answer – the reason for this section of the column is to promote an awareness of how we might all improve our operations.  Consider using these or similar questions at staff meetings encourage your team to THINK!

Topic

1. Can you measure or identify your customer base by market segments?  By arrival patterns?  By desirability by ReVPAR, rate or other factors?
2.  How do you offer discounts? How do you measure their success or viability?  Are you “leaving money on the table”?
3.  How do you decide which markets to target in sales calls or advertising?
4. Do you have a written marketing plan that is used regularly and updated at least quarterly?

Feel free to share an idea and contact me at John.Hogan@bestwestern.com anytime and remember – we all need a regular dose of common sense.



The opinions expressed in this article are those of the author and do not necessarily reflect the views of this publication or of Best Western International.

John Hogan, MBA CHE CHA MHS  is the Director of Education & Cultural Diversity for Best Western International, the world’s largest hotel chain.  Best Western International has more than 4,200 hotels in 80 countries and is one of the worlds most established and recognized hotel brands, founded in 1946 in California.

He serves on several industry boards that deal with education and/or cultural diversity including the Hospitality Industry Diversity Institute, the AH&LA Multicultural Advisory Council, the AAHOA Education and eCommerce Committee and is the Best Western liaison to the NAACP and the Asian American Hotel Owners’ Association with his ongoing involvement in the Certified Hotel Owner program.

He holds an undergraduate degree from the University of Massachusetts and an MBA from the University of Northern Washington.  His professional experience includes over 30 years in hotel operations, food & beverage, sales & marketing, training, management development and asset management on both a single and multi-property basis.  He is a Certified Hotel Administrator (CHA), a Master Hotel Supplier (MHS), a Certified Hospitality Educator (CHE) and is a past recipient of the American Hotel & Lodging Association’s Pearson Award for Excellence in Lodging Journalism.  He has served as President of both city and state hotel associations.

John’s background includes teaching college level courses as an adjunct professor for 20 years, while managing with Sheraton, Hilton, Omni and independents hotels.  Prior to joining Best Western International in spring of 2000, he was the principal in an independent training & consulting group for more than 12 years serving associations, management groups, convention & visitors’ bureaus, academic institutions and as an expert witness.  He has conducted an estimated 3,000 workshops and seminars in his career to date.

He has published more than 200 articles & columns on the hotel industry and is co-author (with Howard Feiertag, CHA CMP) of LESSONS FROM THE FIELD – A COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES, which is available on www.Amazon.com , from HSMAI www.hsmai.org and other industry sources.

He resides in Phoenix, Arizona and is finalizing work on his Ph. D. which includes a 2nd book – The Top 100 People of All Time  Who Most Dramatically Affected the Hotel Industry.

Contact:

John J. Hogan, MBA CHA
MHS CHE
Director, Education & Cultural Diversity 
Best Western International -THE WORLD'S LARGEST HOTEL CHAIN ® 
6201 N. 24th Parkway
Phoenix, AZ 85016-2023 
Ph 602-957-5810; fax 602-957-5815
john.hogan@bestwestern.com


"...we all need a regular dose of common sense "

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