Archives : 2011 : July
Ignoring Not Booked Is Not Right
July 22nd, 2011Most of our resort lodging clients start out with an inbound reservation conversion rate of about 25%. As they engage the technologies and processes of The NAVIS Way, that conversion climbs rapidly. It’s not unusual to see it hit 50% and higher, which is certainly an achievement to celebrate.
But wait, that means the “not-booked” represents 50% to 75% of the inbound calls. If you’re looking at roughly 10,000 bookable calls a year, that’s 5,000 to 7,500 not booked calls. What are you doing with those? Unfortunately, way too many lodging providers ignore them and go buy a list from somewhere else when they want to do some direct marketing. When you have a large group of qualified potential guests who have taken the time to contact you, why would you use a list of unknown names?
If you could convert just 5% of those not-booked leads through direct marketing, you’re looking at roughly $600K in additional revenue (assuming $1,600 stay value). Add an outbound sales strategy and you’ll convert even more.
Don’t forget about those not booked calls.
Bill Schlosser
Vice President – Marketing
The Lodging Revenue Game of Poker
July 22nd, 2011Usually you wouldn’t think “poker” in relation to your reservation team, however, there are many parallels that can be drawn between the two. Here’s the executive summary:
- “I’m all in”. A scary but frequent approach I notice reservation agents using. Basically, this can be defined as immediately fading on rate, or offering that 10% discount within the first 2 minutes of the call. Agents often fall back on this technique when they don’t understand the real value added of your property(s). If your agents are doing this it’s highly likely that they will run into price related objections and guess what? Now they have no wiggle room on rate. What mindset do you want agents setting right off the bat?
- “Reading their tells”. Your agents need to quickly identify what’s important to the guest. Not to be confused with what YOU think is important to the guest. Sell the experience.
- “Hold your cards”. Don’t lay all your cards on the table or feature flood. The guest doesn’t need to know every little detail about the garbage disposal and locking doors. In fact, feature flooding confuses the guest and delays the buying decision. Share only what relates to what’s important to the guest.
It’s your bet.
Brise Carpenter
Client Advocate
The Hidden Cost of Pursuing Higher Occupancy
July 5th, 2011Understanding how to gain and maintain consistent occupancy throughout the year is always a hot topic. It doesn’t really matter if I am speaking with the director of revenue for a 5 diamond hotel or the owner of a vacation rental management company – occupancy always comes up.
On a recent new client visit I observed something that has occurred at many different locations and property types:
Agent: Hello Mr. Smith how may I help you?
Mr. Smith: I’d like to make a reservation for a one bedroom unit.
Agent: Perfect, well I do have several available and I’m running a special so I can give you a 15% discount on that reservation.
Wait wait wait, do I need to have my hearing checked? Are agents leading with a discount? You bet, and not just every once in a while but on almost every call. Why? Their manager has placed all the focus on occupancy. They were even incented on occupancy.
So, why would it be scary to incent your agent on occupancy and give them the power to offer discounts? Anyone? Occupancy incentives can work but only in correlation with revenue and conversion goals for your team. It’s putting the cart before the horse by asking them to focus on occupancy instead of asking them to focus on the skills and behaviors that will help them convert more calls and raise occupancy. Focusing on occupancy is not inherently bad. However, what I find is that it almost always leads to fading on rate.
My advice: be smart about how you get to an acceptable level of occupancy. When tempted to fade on rate just remember, the choice to discount your rate today affects perceived value for 5 years on average. Basically, you’re going to have a difficult time ever convincing them to pay more. You’ve effectively reduced your product to a price-based commodity.
So, instead of fading on rate try value-add or packaging. In other words, give them something with a high perceived value that doesn’t reduce perceived value of your product. They get a free fishing trip or Swedish massage or round of golf. Use the relationships you have with other businesses. If I’m sending you a client Mr. Fishing Charter, will you sell me the trip at half price? Even giving something like the 6th night free is better than fading on rate because the perception is different. It’s a special and can actually add value since the consumer knows how much rack rate is and it hasn’t been diluted.
Let me know how this works for you.
Brise Carpenter
Client Advocate
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