Hospitality Sales and Promotion

Derek Taylor

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136398148
• Edition: 1
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

'Hospitality Sales and Promotion' is the essential guide for every manager in the hospitality industry wanting to achieve maximum profits from their sales promotions. Practical and down-to-earth, this guide discovers: * who is your customer? market segments and groups
* how can you reach them effectively? the secrets of successful public relations
* new and traditional technologies; from direct mail to using the Internet to maximum advantage.Derek Taylor has a wealth of experience in the hospitality industry and has worked with and advised numerous international corporate hospitality companies. Concrete and relevant case studies and examples from his experience are used to illustrate throughout the guide, from companies such as: Whitbread, Hilton International, Pizza Express and Stakis.

1 The marketing plan

The background

Whoever is keen to protect trees should complain about the production of marketing plans. They are usually vast documents. There are statistics of the performance of other hotels, SWOT analyses (Strengths, Weaknesses, Opportunities, Threats), computer print-outs, spreadsheets, Old Uncle Tom Cobley and all. All too often they then go on the shelf and lie there till the same exercise takes place again next year.

Marketing plans have to be working documents, cut to the bone, so that it is simple to identify what needs to be done at any given moment. Then they need to be reviewed on a regular basis. The format of the plan would be 12 monthly lists of things that will need doing. So if you are making out the plan in June, you will remember to put into it the mailing you want for Burns Night the following January, under the December list of things to be done.

There is another major reason why this is vitally important. No matter how busy you are, the tables have still got to be laid, the food cooked, the beds made. When it’s all hands to the pump, the only area which can safely be neglected without immediate chaos is sales and marketing. Fail to make the chase call, don’t send out the direct mail, don’t put out the tent cards for the special offer and absolutely no crisis will ensue. You will get through today unscathed. You may go broke in six months time, but today you’ll survive. So prepare for that problem. If you have got a marketing plan, keep to it at all costs.

Of course, you could fail to make a profit with some of the initiatives. In fact, it can be absolutely guaranteed that even if it is a good, comprehensive marketing plan, you definitely will. You can’t get it right all the time. And if you do nothing and finish up in the same profit position as all your neighbours, that’s the perfect excuse for not making more money. What is more, if your organization punishes marketing failure, the safe option is not to do anything remotely revolutionary – and to look for a better company!

When deciding which markets to tackle, the trouble with the hospitality industry is that there are too many clients. The majority of the population could eat in your restaurant. Large proportions of your incoming tourists could stay with you. Then there is every travel agent, association, tens of thousands of commercial companies, million of potential Short Break holidaymakers … the list goes on and on. In developing your marketing plan, where do you start? What are your priorities? Who is available to do the work? Let’s take it one step at a time.

Bringing back the old business

Protect the business you have got. You don’t want the additional business you get to just replace the old business you have lost. So, how are you going to get the old business back?

It is difficult if you don’t know when the decision makers for the group bookings are going to start planning the next event. And you need more information than that. Whether you put the details on a sheet of paper or in a computer, the minimum you want to know about everything you want back is:

• The name of the organization.
• The decision maker.
• The type of business it was.
• The date they are going to start thinking about it again.
• The value of the business – if time is limited, go after the big ones.
• The telephone number.

Then put the correspondence in alphabetical order in a file. When the time arrives to talk to the client again, you need to be reminded by the system. So either the sheets of paper are in trace date order or the computer program can give you the list of organizations you should be tracing this month.

That takes care of the group business you had. But what if the old correspondence hasn’t been touched for years? What if there are no trace dates to try again? Then get in temporary help to put it all together for you. You have to validate the old records. You contact the organization who gave you the group business and you ask them three questions:

• Does the business still exist?
• Who is the decision maker now?
• When do they make up their minds?

Eliminate what isn’t happening again. Keep a record of what does exist. Your hard working and overqualified staff don’t need to be involved, except to supervise the student. Then see the records are kept in the future, so you don’t have to go through the exercise again.

You can move on from there. Does the organization have any other business you could quote for? It is an easier market to approach than people who have never used you before. ‘We look after Tom, Dick and Harry. Could we look after you?’

Of course, it would be nice if you knew something about those old decision makers. Are they teetotal, fusspots, lazy when it comes to administration, divorced (don’t cheer then for the joys of marriage), old timers, New Turks, etc. etc. If they are strangers to you, the right personal approach is more difficult to guarantee. Can you visualize the National Accounts Manager for Unilever not knowing the colour of the Tesco Purchasing Director’s bed socks? Yes, I know nobody kept that information for you. They should have.

Getting more business from existing customers

After protecting the old group business, you then need to apply the most important four words in improving your business; ‘Why? And Who Else?’ If you are looking after one branch dinner, why not the other branches? If one cricket club has their annual party with you, who else plays in their league? If you have stockrooms for one shoe manufacturer, who else is selling shoes in your town? Again, it is then a matter of research. Go through the list and identify who could need you.

Whatever business is available to you, there is a crucial question before you go after it; do you want it? What is the point of going after 25 organizations who have parties on Friday nights in December? Just open the doors in Banqueting and they will pour in without doing any selling at all. You want to concentrate on the rare kinds of business.

Filling the gaps

When you have taken care of the bread and butter business, marketing is about filling gaps that won’t fill themselves. It obviously isn’t about getting business for any time at any tariff. Yet many hotels offer companies corporate rates lower than their published tariff, without having any idea whether the bednights they get as a consequence will improve their occupancy. The corporate rates are based on promises to provide bednights; not on promises to provide valuable bednights.

Who has the valuable bednights? Well, take one example. Suppose you have a serious weekend occupancy problem and your hotel is in a dull, uninteresting town. You are not in London, Sydney, Las Vegas or Rome. One source of weekend business then is conferences by charities. Who could tackle that market? And supposing I recommend that you hire a member of staff just for that. How do you justify the expense?

Say you have 50 unoccupied bedrooms on an average of 30 weekends a year and you would like £50 a bedroom for the two weekend nights. If you achieved that, you would get £50 × 50 bedrooms × 2 nights × 30 weekends = £150,000. And say that you can make 50 per cent profit = £75,000. And say the member of staff costs you £15,000. If you fill 20 per cent of the gap, you will get your money back. Fill six weekends – and the staff member has the whole year to do that – and the expense has been self-liquidating. Anything over six and you are in profit.

Your marketing budget should never be an expense. It should be a question of feeding geese who lay golden eggs. That’s why it is so stupid to cut the marketing budgets when business goes sour. If the sales effort is professional, you can hardly avoid making a profit. A cut in the marketing budget should mean increasing your loss.

Certainly, you can hope the business will come without the sales effort – what is called Milking the Product – but often it won’t. The gaps were there before; they will be worse when times are hard.

Correspondence research

How do you find the business that will fill the gaps? Well, why aren’t you full on Sunday evening? People have gone home to work on Monday morning, there aren’t many holidaymakers in the winter, nobody has got any money, etc. etc. Then the next question is ‘why aren’t you totally empty?’ Because all those things don’t apply to the people who are eating or sleeping with you. Who are they and why don’t they apply? In a hotel there should be a Reception staff member who specializes in finding the answers.

Often they tell you in their letters, for example, they are coming for an event, which is specified – ‘I’m attending a conference at the hospital’ from someone who signs himself Dr Smith. A twin bedded room on company notepaper probably indicates a company function where the partners are invited. If their title is Sales Manager, there may well be a sales conference somewhere. Examine, investigate, research. Where you find that one person is coming for a dog show, where are the others who are coming? Part of your marketing plan must always be to learn more about the market.

You have to concentrate on those bad days, those empty sessions. In your district, within a few miles, there will be ample customers to fill your restaurant or hotel every day of the year. The problem is who are they and how can you appeal to them?

The soft option is to say that everybody is quiet, so you are quiet too. The professional approach is that you have no objections to everybody else being totally empty – as long as you are 100 per cent full!

Yield management

Yield management is a contemporary term for getting as much revenue from selling the product as you possibly can. It involves you in deciding what percentage of the product will be sold at full rate, what needs to be sold at a reduction, and what is the lowest price you can accept that still makes a contribution towards your fixed costs – rent, rates, management salaries, etc. – after you have taken out the marginal costs – food, soap, etc.

Look at every night, every meal occasion, from that point of view. Then decide what you want to charge and that is part of your marketing plan too. Yield management is studied more closely in Chapter 6.

Forecasting the future

The famous American evangelist Billy Graham once said that faith is not reducing speed when driving over the brow of a hill, satisfied that the road you are on will continue. In hospitality industry terms, the road you are on is the business pattern over the past years. If you have been full on Mother’s Day for 10 years, the likelihood is that you will be full this year again, if you make the same marketing effort. If you have been empty between December 26th and December 30th for the past 10 years, that will reoccur too – unless you do something about it.

Therefore, you need the records as far back as you can go. It is worth the staff cost, going to work to drag them out. Hotels complain about the lack of commercial business in the weeks before and after Easter. Well, there will be an Easter next year again. So the marketing plan sets out to do something about it. For example, company pension clubs don’t mind when they have a social outing, so long as the price is right. They are a good market for before and after Easter.

When you know where you have come from, you still have to ask yourself if the future will replicate the past. To some extent, this is out of your hands. If the Japanese Stock Market crashes, you will get fewer Japanese tourists; the Japanese won’t have as much spare money – what is technically called discretionary income. If there are riots and civil unrest in a country, it is likely a lot of tourists will stay away until the situation has returned to normal. If the lira crashes, you will get fewer Italians. The important thing is to recognize that these stories in the City or Foreign News pages of the newspapers really can affect your future business. When I was discussing prices with an American travel agent and we weren’t far apart, I would always settle for his price if it was going to be paid in dollars; it was always a fair bet that sterling would weaken against the dollar and I would finish up with my price at least.

The timetable

Far too many marketing plans are pious hopes of what may happen on a good day in a fair wind, unless there are unforeseen circumstances. What they need to be is detailed plans of how it is going to happen. Who is going to do what, and by when, and at what cost? Then you need to monitor regularly that this is what actually takes place.

It is seldom possible to correct a revenue disaster if it comes upon you without warning. It is normally a question of too little, too late. With planning, the disaster doesn’t have to happen in the first place. Suppose you are quiet in January. You look at the forecasts at the end of December, when the Christmas and New Year rush are over and you say ‘We must do something about this.’ It’s too late. You should have planned for it months ago. And you say ‘But we didn’t have time months ago. We were busy.’ Well, say you want to start sending out direct mail in October to get January business, and October is a desperately heavy month. You had no time to write the direct mail, run it off, address the envelopes and frank them in October. So do it all the previous January! Just put the material in cardboard boxes and get it out and post it when October comes around. Are you really surprised when business is bad? Sometimes, yes, usually, no.

Looking for improvements

There are certain marketing areas which benefit from particularly careful monitoring:

• What percentage of the banqueting enquiries are converted into definite bookings?
• What percentage of the enquiries to Reception for bedrooms are converted into definite bookings?
• What percentage of Brochure and Tariff enquiries result in definite bookings?
• What percentage of the old group business comes back?
• Is the level of the sleeper/diner ratio improving? (i.e. More people staying in the hotel are eating in the hotel.)
• How do the restaurant covers change when you advertise locally?

Those are the ways in which you know that the marketing is working. Plus, of course, your acc...

Table of contents

• Front Cover
• Half Title
• Title Page
• Copyright
• Contents
• About the author
• Foreword
• Introduction
• 1 The marketing plan
• 2 Organizing a sales office
• 3 Buyers and customers
• 4 Face-to-face selling
• 5 Telephone selling
• 6 The shape of things that came – the technology
• 7 Banqueting sales
• 8 Direct mail
• 9 Advertising
• 10 In-house promotion
• 11 Public relations
• 12 Special Events and Short Break Holidays
• Bibliography
• Index