HOTEL SALES ORGANIZATION AND OPERATIONS - Hotel Management and Operations

SALES AND MARKETING

Sales and marketing are related concepts, and each is an art and a science. Sales flow from marketing. Marketing, well stated by Lewis et al. (1995), “is communicating to and giving target market customers what they want, when they want it, where they want it, and at a price they are willing and able to pay.”The primary focus of sales is on the communication aspect of marketing. It involves direct personal selling to potential customers that you and your organization have the right product, in the right place, at the right time, and at the right price—be it a hotel, a restaurant, a casino, or contract food services.

Marketing is getting and keeping a customer, a macro approach to managing a successful business. In a broad sense, marketing is the development and delivery of a successful product, that is, the development and delivery of a satisfied customer. Hotel sales comprises finding that customer and matching his or her specific needs with the right product offering, a micro or one-on-one approach to customer satisfaction. For example, a meeting planner from Texas Instruments (TI) is planning an annual sales meeting to be held in Dallas. From a macro perspective, this planner has selected the city and is searching for full-service lodging accommodations for 200 TI sales representatives for a five-day conference. From a micro perspective, he or she visits several hotel alternatives and meets with the hotel sales representatives to find the best “fit.” Various aspects of the meeting being planned are discussed including dates, rates, guest room accommodations, function room requirements, food and beverage services, and so forth. It is the job of the hotel sales manager to learn the specific needs and wants of the planner and “create” the right product, place, time, and price for a successful conference.

A successful conference is what the planner is really buying, not bricks and mortar. Thus, successful selling is understanding the real needs of the buyer, communicating how your product and service can best respond to those needs, and then delivering it. In another context, McDonald’s Golden Arches markets fun, simplicity, good service, and a good price. McDonald’s sells friendly service, good value for price paid, convenient locations, and those delicious golden chicken nuggets on which many of us grew up. Ronald McDonald is an ancillary product, a public relations endeavor, which augments and supports the idea or concept of kids and why they are special.

Public relations, advertising, and special promotions often support the selling effort. Advertisements for the Ritz-Carlton Hotel Company are directed to their business traveler clientele. Such advertisements incorporate both the selling and marketing aspects of this upscale hotel chain. The company is simultaneously selling hotel rooms to busy business executives and marketing a hotel that “remembers your needs,” and is hallmarked by the vision implicit in their slogan “ladies and gentlemen serving ladies and gentlemen.” A travel agent, a corporate travel manager, or a secretary, however, may have handled the actual purchase of the hotel room. Thus, the Ritz-Carlton advertisements support the sale, but they do not actually make the sale happen.

SALES AND OPERATIONS

Sales is the critical link between marketing and operations. While hospitality professionals may espouse marketing, all too often it becomes ignored in the daily hustle and bustle of operations. It is the role of sales to help bridge this gap and find ways for the key customer-contact members of the hotel to keep the promise of marketing.

Selling starts by the professional sales managers prospecting, making contacts, establishing relationships with clients, uncovering their specific needs and wants. But it doesn’t end there. Sales is also the host or hostess greeting restaurant patrons. Sales is the front desk clerk welcoming a guest at the local Holiday Inn or at the Waldorf-Astoria in New York City. Sales is the housekeeping staff delivering the extra set of towels requested by a guest. Sales is the sommelier in a gourmet restaurant recommending wines to complement an entrée choice. Sales is the front office cashier saying, “Thank you for staying with us. We hope you enjoyed your stay.” It is amazing how a simple thank-you can express appreciation for a customer’s patronage and bring them back.

All client-contact personnel of a hospitality organization perform personal selling either consciously or unconsciously. This includes staff who does not regularly have guest contact, such as the credit manager. One of the authors nearly lost a $100,000 annual account when a poorly trained credit manager called the client to collect a payment that had not yet been billed. A well-trained and motivated employee who understands how a hotel works is key to successful selling. This is accomplished through the hiring and training process, and although the many facets of human resources are beyond the scope of this chapter, its importance to guest satisfaction cannot be overstated.

In this particular context, however, the hotel’s human resources department can perform services on behalf of the sales department by recruiting sales associates who understand the nature of the hotel industry and its place in the broader category of the services segment of business. Services are different from products and require specialized knowledge and training to be competitive.

Because hospitality is very much a part of the services industry, it is useful to understand how services differ from products. Those characteristics that are unique to the services industry product include perishability, simultaneity, heterogeneity, and intangibility.

Perishability refers to the short shelf life of the hospitality product. If it is not sold today, the potential revenue from the sales of that product is gone. A hotel room has a 24- hour shelf life. A restaurant seat has a two hour shelf life. Manufactured goods have a much longer period of durability. If a television set is not sold today, it can be sold tomorrow or next week. The potential revenue from the sale of that product is not lost. But a Tuesday-night hotel room cannot be resold on Wednesday. Tuesday has come and gone. If the hotel guest room goes unsold Tuesday, the potential revenue lost from that vacant room cannot be recouped.

Simultaneity means that production and consumption occur at the same time. How can you produce a guest experience without the guest? Our customers, in a sense, are part of the assembly line. They need to be present for final production of the product offering. A vacant guest room produces nothing. Yes, the carpeting is installed; the bed is made, the bathroom plumbing works. But it all just exists until a guest arrives to use it. Simultaneous production and consumption is a unique challenge for successful operations in hospitality management. The guest needs to be present, because many of the facets of the service involve performances by hotel staff.

A related service characteristic in hospitality is heterogeneity. Heterogeneity refers to the variability of service delivery. Guest service agents have their moods. Customers have their moods. All have personalities of varying shapes and sizes. Hospitality is a very people oriented business. Service personnel change from shift to shift, typically on an 8-hour schedule. Though operational manuals exist in most hospitality establishments, rarely are policies and procedures followed in an exact manner. Guests’ “personalities,” too, can change throughout their stay, and it may have nothing to do with how they were treated by service personnel. Dealing with heterogeneity in service operations is dealing with reality. Mistakes will happen. But more importantly, mistakes can be addressed. Often a simple apology can win back a customer regardless of who was at fault when a mistake happens.

Intangibility is a fourth major characteristic of service businesses. Some consider it the most important component to recognize. Intangibility refers to the highly intangible nature of the service product offering. Intangibility is a feeling; it is having a sense about something that one cannot fully articulate. The intangible nature of the service product cannot be prejudged. Consumers cannot really see, touch, smell, hear, or taste a service product prior to consumption. They can only anticipate. One can test-drive a car before an automobile purchase is made to see what it feels like to drive. But a hospitality customer cannot test-drive a hotel weekend package or a restaurant meal prior to consumption. The intangibility aspect of hospitality emphasizes that service delivery is critical to customer satisfaction. Most customers have an idea of what to expect. But, in the end, they are really not sure of what they are buying until the hospitality experience actually takes place. Finally, after the service has been consumed, the guest has only the memory of the performance.

The foregoing unique characteristics represent the foundational challenge to the hotel’s sales staff: they must find a way to promise performance and experience in such a way that the hotel’s operations departments can deliver on the promise. If the essence of marketing is finding and keeping a customer, then the sales promise is fundamental to that effort. Operations’ most important role is the keeping of that promise to the customer— having that customer walk away with a positive and memorable experience and want to return again.

MANAGEMENT OF THE SALES PROCESS

Sales management is effectively directing the personal selling efforts of a hospitality establishment. It involves managing the sales process from both an individual and team perspective. In other words, sales management addresses the logistics of sales solicitation and the development of sales account executives to enhance their sales productivity. Sales account executives need to manage their day-to-day activity, sales teams need to coordinate their efforts, and customers need to feel that they are working with a professional and well-managed organization.

There are several components to hospitality sales management. These include sales organization, sales account management, recruitment, training and development, goal setting, and performance appraisals. Sales organization refers to departmental and individual organizational issues and inventory management. The following section focuses on the sales organization aspect of hospitality sales management.

SALES ORGANIZATION

Sales organization can be viewed from three perspectives. These include departmental organization, individual planning of sales activity, and inventory management. A sales department needs to be organized, and sales managers within that organizational setup need to coordinate their efforts. Sales managers need to plan or organize their individual activities on a daily, weekly, and monthly basis. Allocating the sale of inventory to various customer segments needs to be managed, as well. These are important issues in hospitality sales management, and following is a more detailed discussion of each.

Hotel Sales Department Structure

Departmental Organization

Organizing a sales department means determining who is going to do what. Sales solicitation needs to take place, administrative tasks need to be completed, and managerial decisions need to be made on a regular basis. In medium- to large-size hospitality establishments, a director of sales and/or a director of marketing coordinates these efforts. In smaller operations, it is not unusual to have one individual responsible for all of the above. For most bed and breakfast operations in the United States and Canada and the small boutique hotels in Europe, for example, the owner and/or manager of the establishment typically handles sales activities.

Figure is a sample sales organizational setup for a midsize urban hotel targeting business clientele. The sales managers in this example are organized by target market and by geographic territory. Sales manager 1 is responsible for corporate accounts located in the immediate downtown and surrounding area. Sales manager 2 is responsible for national corporate accounts. This refers to companies based in other areas that conduct business or have the potential to conduct business at the hotel. Both of these sales managers solicit group and transient business from their account base.

Organization of an Urban Hotel Sales Department

Organization of an Urban Hotel Sales Department

Sales manager 3 targets meetings and convention business from national association accounts. This business may include executive board meetings, committee meetings, regional conferences, and annual conventions. In this example, once group events have been booked they are turned over to the conference services department for service delivery. Both the sales managers and director of conference services report to the director of sales and marketing. The sales team meets weekly to discuss issues pertinent to achieving the department’s sales objectives.

Weekly sales meetings are very much a part of a sales department’s organizational structure, be it a sales force of two or twelve sales account executives. They are critical for effective communication within the department. At these meetings, each team member highlights his or her weekly activity with regard to new prospects uncovered, tentative bookings, verbal definites, cancellations, etc. (Verbal definites are bookings where clients have verbally committed their meeting or function to the facility but a signed contract is not yet in hand.) In other words, sales managers share with each other progress reports on various accounts they are currently working on. Thus, each team member gets an up to- date informal report on the status of all current sales activity.

For example, one sales manager may be working on a tentative booking but considers it weak because of strong competition for this particular account. Call this Group A. Another sales manager may have a new prospect with similar space requirements interested in the same dates. Call this Group B. Assume, however, that the property has the capability of booking only Group A or Group B over the same dates because of space limitations.

When these types of issues surface at sales meetings (which they frequently do), discussion will occur raising the following types of questions:

  • What is the likelihood that either group will eventually book its business at the property?
  • What is the estimated profitability and/or contribution margin for each group?
  • Is either group a regular client?
  • What is the likelihood of repeat business from either group? In other words, what is the long-term profitability for each?
  • Can either group consider alternative dates? (A very important question.) What would incite them to move dates?
  • Do convention history reports match their current space allocation requests?

These are just a sampling of questions that need to be raised and answered. It is a never-ending process in hospitality sales management to search for the best fit for both the buyer and seller.

All rights reserved © 2020 Wisdom IT Services India Pvt. Ltd DMCA.com Protection Status

Hotel Management and Operations Topics