Proactive sales
Proactive sales are when the initiative lies with a hotel salesperson and not the customer. Sometimes this is called "hunting," but it's not an excellent strategy to randomly hunt for business. Instead, use a systematic approach by figuring out your market's demand drivers, such as corporations, government, convention centers, sights, entertainment, and other attractions.
Corporate negotiated agreements
When the hotel has identified the companies with corporate travel to the destination, it is time for the salespeople to call on the travel managers and present what the hotel can offer. While visiting the travel manager, the salesperson needs to find answers to the following questions.
- Destination volume (how many room nights per year)
- How many room nights the company would like to buy from the hotel
- Expected rate (what do they pay at other hotels)
- Travel management (in-house or outsourced)
- Travel policies for employees
- Orientation, such as savings, convenience, or safety
- Travel patterns, such as day of arrival, length of stay, and day of the week
- Special terms and conditions (breakfast and other meals, wifi, gym, late check-out, etc.)
Based on these questions, the salesperson can draft an agreement, discuss the rate and terms with the revenue manager, and send a proposal to the company. During the discussion about rates, the revenue manager establishes a rate interval from a wish to a walk rate. A wish rate is what the hotel would like to have to feel happy with the agreement. A walk rate is the lowest point where the hotel will walk away from the business. The salesperson should have the authority to negotiate the deal between these two rates.
A good strategy is to look for agreements with travel patterns during low-demand days, such as Sundays in most business destinations. Another way to prepare is to analyze weekly demand patterns and adjust the rate accordingly. For example, the walk rate is probably significantly higher if the company only buys room nights on the highest demanded days. Without a stay pattern analysis, the hotel will leave a lot of money.
To maximize the outcome of a corporate agreement, the hotel salesperson needs to implement the deal successfully and continue to nurture the customer during the term.
Other negotiated agreements
The same principles apply to other negotiated agreements, such as leisure contracts and distribution agreements.
Reactive sales
Reactive sales always start when an inquiry arrives at the hotel. The most common inquiry type is for a MICE deal, but it could also be an RFP for room nights, groups, or tour series. In addition, the potential customer has most likely sent the inquiry to a few other hotels. The tactic is to respond as quickly as possible, and the first action for a salesperson is to call the customer to find out more details about the request. Then, based on the customer's precise needs, the salesperson will discuss rates with the revenue manager and put together an attractive proposal.
MICE proposals often include meeting space and food & beverage, which brings revenue to many departments in the hotel. For every MICE deal, the total order value is more important than each part of the package. The revenue split among departments often creates frustration instead of happiness for winning the order. Teamwork and looking for the best possible deal for the hotel are vital to succeeding in capturing the business.
Another vital aspect of MICE deals is understanding the attendees' consumption patterns. For example, what are the initial inquiry, the accepted proposal, and the final total revenue from the event? Track the income in each step to fully understand how much revenue the hotel will obtain once the event is over. This knowledge is essential to maximize the final order value.
A good strategy is to work with pre-payments and deposits for all MICE deals. The hotels secure the money, and once the customer has paid, the willingness to buy more increases.
Pre-arrival sales
Most hotels practice pre-arrival emails to guests to sell additional products and services. Hotels, however, miss opportunities in pre-arrival B2B sales. The salesperson should check in with the customer before the event to make sure all is good and, at the same time, offer additional products and services. The approach is offering other services to the customer, not over-selling. Pre-arrival sales to MICE participants are also often a missed opportunity. A pre-arrival email to participants could help the customer with a few final reminders about the event and offer products and services to individual attendees. The salesperson should always do this with the customer and never without the customer's permission.
If your hotel offers overnight accommodations before or after an event, it's customer service at its best. Today, many people can work from anywhere, so they do appreciate the convenience of being able to arrive early or stay late when they're traveling to attend an event.
During the stay sales
The final opportunity to sell something to the customer is during the stay. The most common extra sales are beverages, but it could also be spa treatments, activities, transportation, gifts, etc. The strategy here is to make products and services readily available during the stay.
Final thoughts
Hotels should make sure that they are maximizing their revenue from each customer. Ensuring high spending per guest can be done by implementing a system that takes advantage of all four different sales practices. It is essential to get all of them into one process that everyone in the team uses to increase revenues significantly.