Employees must come first

People — especially employees — must come first in 2015 on the operational front. This is just one of the predictions revealed in a wide-ranging forecast for the coming year published in the December print edition of HOTELS. Hoteliers need to be proactive about training and retaining staff, according to Russell Kett, chairman, HVS London.

So what is really new about this? Many international hotel chains truly follow this motto and that is why they have been so successful in spreading their wings internationally. On the other hand, many of our Indian chains barring the exception, just mention this in their credo but blatantly look the other way when other interests come up. Thus profitability, guests, ego, personal agenda, etc. take over and the employee is left behind.

In the current trough that we are undergoing since the past 3 years, it is only the ethically strong who have supported their employees through falling bottom lines and declining revenues. Don’t get me wrong – I am not talking of downsizing in the case of excessively staffed hotels… I am referring to the pink-slip being given merrily in some organizations with no thought of the employee. Even in the case of downsizing, I have yet to hear of hotels assisting the employees who are let go, to get new jobs.

What these hotel owners need to realize is that the atmosphere created is negative and will only take their business down further. Also, when the business trend begins moving north in a year’s time, as is forecasted; their employees will not be loyal to them.

Hence People — especially employees — must come first in 2015 on the operational front.

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2015 Business Travel Forecast

American Express Global Business Travel has released its annual Business Travel Forecast revealing air, hotel and ground transportation prices are expected to be neutral to slightly higher across all regions in 2015. With new hotel supply limited in many major markets, the slight increases in business travel demand expected should put more pricing power in the hands of hoteliers next year, according to American Express.

Additional global hotel pricing predictions include:

  • In North America, hotel rates are expected to trend upwards, buoyed by favorable economic growth, increasing demand and a lack of new inventory. Additionally, moderate and upscale hotels continue to explore ways to further differentiate themselves from the competition. Amex is forecasting rate growth for mid-range hotels of 3% to 6% and upper-range hotels 3.5% to 7%.
  • Across Europe, the Middle East and Africa, hotel rates are predicted to rise slightly in nearly all countries and categories, as demand steadies. American Express forecasts rate growth for hotels in EMEA at 1% to 6% for mid-range hotels and 0% to 5% for upper-range properties.
  • In Asia Pacific, hotel rates across the region are expected to rise minimally across most categories in the coming year. The forecast for rate growth ranges from 0.8% to 3.5% for mid-range hotels and 0.7% to 3.5% for upper-range hotels.

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How to select a Management Company ( operator)?

If you have decided to simply own a hotel, but not run it, you have two first choices: branded or non-branded? We are assuming here the choice of a brand, due to advantages for distribution. Here are some of the key considerations to take into account whilst choosing a branded operator to manage your hotel:

  • How many hotels does the company currently operate?
  • Does the management company operate competing hotels in the same zone?
  • Length of agreement?
  • Procedures for extending or terminating contract?
  • Contract terms in event of the hotel’s sale?
  • Base fee to be applied?
  • Incentive fees earned or penalties assessed relating to operating performance?
  • Reporting relationships and requirements?
  • Break-off clause

Furthermore, is it a first tier or second tier company? First tier refers to management companies that operate hotels for owners using the management company’s trade name as the hotel brand. Hyatt, Hilton, Sheraton are examples. Second tier is management companies that operate hotels for owners who have entered into an agreement to use one of a franchiser’s flags as the hotel brand. Tiering does NOT refer to the quality of the management operating the property. It can be worthwhile to talk to other owners, and look at some of the key issues they have had to deal with. When it comes to management agreements, brands have a lot of power to unilaterally impose changes in standards that all system hotels must meet. These include such things as computer systems and software, new signage and logos, loyalty programmes, design requirements, promotions and centralise services. For some owners, the cost of these brand-imposed standards may simply not be worth it. The question then has to be asked as to whether the standard benefit the brand or the hotel… Is the brand growing too fast? In recent times, some issues have arisen due to the fact that some brands and operators expanded so fast that they lacked the adequate expertise, procedures, systems and personnel to manage properly.

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Value Proposition

Creating a Value Proposition

A value proposition is a promise of value to be delivered and acknowledged and a belief from the customer that value will be appealed and experienced. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services. Benefits help in creating a value proposition for the guest. Hence to create a value proposition for a guest, the product/service must be first seen from the guest’s perspective rather than the organisation’s perspective.

The value proposition is, by definition, different than a company’s mission statement. A mission statement talks about how the company is going to offer a product or service to a specific market segment, while a value proposition explains why the people/companies in that market segment should want to engage with that business.

Value is innately subjective. Different people value the same thing differently.

For a restaurant, you must establish the value proposition that will best resonate with your target customer base. Make sure that the value proposition permeates through each part of the restaurant. For example, if your value proposition is simply “great seafood and the largest selection of white wines in the city,” then all restaurant employees should focus on delivering that value proposition. The wait-staff should lead with this statement at each table they serve. The kitchen should have a consistent menu of popular and unique seafood, and must also try to add a unique, seasonal choice. The wine-waiter should do the same—highlight the wide selection, but suggest special “pairings” of wine with featured seafood.

Deciding on the value proposition also helps with its focus. You might have a fantastic kitchen staff that makes great-tasting food, but you can’t be all things to all people. No single restaurant has the best steak, chicken, fish, wine, beer, appetizers and dessert. Any restaurant that tries to be the best at everything will find that they have spread themselves too thin. When you create an appealing value proposition for your restaurant, you are creating a reason for people to choose it over other options.

Keep in mind that your value proposition does not necessarily need to be food-related. For example, if you’re running a beach bar, your value proposition could be “sun-downer cocktails” or “beach games” or “trendy local live musical performances”.  Different people value things differently. Some people may not be interested in beach games, but you need to research what your guests may want and use the answers in creating your value proposition.

In summary, to ensure that your value proposition is successful, you must strategize such that the value as perceived by the guest is actually greater than the actual value in the product or service you are offering.

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Up Selling and Cross Selling

An up-sell is to get the guest to spend more money – buy a more expensive model of the same type of product, or additional features that relate to the product in question. A cross-sell is to get the guest to spend more money by adding more products from other categories than the product being viewed or purchased.

Say the guest is planning a special anniversary dinner with his wife at your hotel. He comes to reserve a table in your restaurant for a 3 course table d’hôte dinner with a bottle of domestic house wine. You offer:

  • A three course table d’hôte seafood dinner in the private gazebo on the restaurant lawns with a bottle of champagne ~ Up-sell, same product family, more expensive
  • A couples Swedish Massage at your spa followed by a 3 course table d’hôte seafood dinner in the private gazebo on the restaurant lawns with a bottle of champagne ~ Cross-sell

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Importance of Understanding Needs

Selling when needs are absent, may lead to lot of objections. Also. if the needs are abstract and not formed clearly, the selling process may still lead to some objections. Creating concrete needs make the selling process smooth. A high-pressure salesman is the one who starts selling before establishing concrete needs whereas the effective salesman spends time in creating and developing the right type of needs. There are essentially two types of needs:

  • Abstract or Unclear Needs: Dissatisfaction/Problem may make the customer worried and make him think towards change. However due to inadequate value propositions he may live with the problem rather than accept your solution, making price the main issue.
  • Concrete or Clearly Felt Needs: These are the strong desires and wants which are clearly felt and perceived by the customers. Concrete needs make your selling process smooth.

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Linking Loyalty programs to Social

While the impact of loyalty programs has long been assumed beneficial, a study published by Cornell University confirms it: After guests enrolled, they returned to a hotel nearly 50% more often, and hotels increased their incremental annual per guest revenue nearly twice over.

An emerging key component to a successful loyalty program strategy is the marriage with social media. Every day, consumers are checking in and snapping photos all while looking for the next best amenity.

Here are a few things every luxury hotelier should consider to multiply the efficacy of their efforts:

  1. Use your loyalty program as a social conversion activity.

Social has much greater impact when used beyond gathering likes and other vanity metrics. Social has the biggest impact when focused on driving conversion actions. Motivating socially activated consumers to join your loyalty program is an ideal conversion activity.

  1. Recognize and reward members for social engagement.

Foundational to most loyalty programs is the idea that the more a customer participates the more they receive. Additionally, luxury consumers have come to expect high-touch brand interaction. By recognizing and rewarding social participation of loyal customers, you can encourage positive word of mouth and make participants feel special — a feeling you want connected to your brand.

  1. Socialize your existing member list.

Socialize an email list by combining social intent with an offer — such as a room upgrade — sent over email to analyze which social channel your audience prefers and to move a private offer into social. This allows the brand to increase engagement and acquire new loyalists organically. Utilize your current database to advocate on your behalf in social — where everyone is looking to their network for validity.  4. Link your data. 

Recognizing loyalty members for social participation also enables marketers to link guest activity across programs, connecting the dots between social handles, email and rewards accounts. This gives a more holistic view of guest activities and a truer sense of their brand value. Populating this data into your CRM also gives you a richer view of what motivates and delights those customers who spend the majority of their travel money with your brand.

Bringing together your social media marketing and loyalty program creates a virtuous cycle where you can learn more about guests, enabling you to further tailor offers and create even greater loyalty moving forward. Furthermore, as social media consumers see posts from your most influential audience — happy, loyal customers — they will be more likely to take action as well, from giving your brand a try all the way up to joining the program themselves.

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Hotel Revenue Acquisition Costs

Based on a recent study over 3 years, released by The Hospitality Asset Managers Association (HAMA) it was found that Hotel revenue acquisition costs have far outpaced revenue growth. It specifically looks at both the external costs of brand allocations (for marketing, advertising, major promotions, loyalty programs, national and global sales offices) and third party commissions (for group & transient bookings) as well as the internal costs of marketing and sales programs, including local marketing, sales staffing and other expenses, including reservations staff.

Total customer acquisition costs rose by 23% while brand allocations grew by 37%, and third party commissions by 34%. As a result, properties now control less of their marketing fund (44% vs. 49% in 2009). It is thus critical to understand and then control external costs, including the costs of customer acquisition.

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Features, Advantages & Benefits

Features: Facts or characteristics of a product or a service. Example: Our hotel provides 24-hour services which include a state-of-the-art Business Centre, Concierge service, Doctor on call, In-room dining, i-pod with docking station, Laundry and dry-cleaning, Broadband and Wi-Fi internet, Car and Limousine service, and various other international amenities and services. Research shows:

  • Features have a small impact during the initial stages of a selling process
  • Telling more features creates an opportunity for the guest to front more objections
  • Features have very less impact in the advanced stages of a sales call

Advantages: Show how a product can be used or is better than that of the competition. Example: Our hotel is the closest to the international airport as well as near the central business district and is located in a high security zone. Research shows:

  • Advantages have a positive effect in the initial stage of a selling process.
  • Have less impact in the latter stages of the sales cycle.

Benefits: Show how a product can meet the concrete need expressed by the guest. Examples: Having our own Pan-Asian restaurant ensures that your Japanese guests staying at our hotel will be very comfortable with us, especially since our staff have also learnt basic Japanese and will be able to converse with your guests / Is parking a major concern? Do not worry as our hotel offers parking for up to 400 cars at any point of time / Our rooms with balconies directly overlooking the sea will offer your guests the opportunity to take in the sea-spray during their stay. Research shows:

  • Benefits have a consistently high impact throughout the selling cycle.

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Info, Time, Power – Negotiating Leverages

Information, Time & Power – Leverages of Negotiation

In negotiations, Leverage is power. Whoever has the most… wins

Here are some primary questions you must ask yourself when you are negotiating: “Who has the superior bargaining position? Why is it superior?” The next question you must ask is, “How and when can you use your leverage to your foremost advantage?” Timing and technique matter. Now, as you analyze your situation, realize that everything the opposing person wants or needs for agreement is to your advantage (as long as you understand their reasons). On the other hand, everything you need or desire for an agreement adds to the other side’s leverage (also only if they comprehend your reasons).

Hopefully your preparation has given you as much information as you need to be a strong negotiator. As you negotiate, new information will come up that will help you understand where the other person is coming from. As much as possible, make sure you don’t give too much information to the other side. Try not to contribute any knowledge that would grant them superior power. This is not easy, but the better you do it, the better your leverage during a negotiation.

You have to evaluate your leverage over and over again as well as the leverage the other person is showing you. Why? Because as talks move forward, events, positions, and attitudes change. More than likely, your adversary is also performing the same calculations. It’s very much like a chess match. Each advance changes the posture of the game. The correct moves at the proper time can threaten your contestant’s king. So you should deliberate many times on how and when to use your leverage during a negotiation to achieve dominance.

If you fail to stay updated and informed as the process unfolds, you may not maintain any advantage. If you require an emergency appendectomy the doctor and the hospital obviously have the advantage and the most leverage. You are not in the position to negotiate the cost of the operation while you’re rolling in pain on a gurney to the operating room. However should the sickness be one which is not an emergency and in which you can take a second or third opinion, your leverage increases as you may have options to obtain medical opinions with other hospitals and doctors.

Here’s another factor: It’s not entirely the scrutiny of powerful positions that creates leverage. It’s also how that force is handled. You can use it subtly or with a hammer. You can apply it when circumstances are proper and when you are at your best, or use it at the improper time and destroy your superiority.

Finally, there are two important questions to ask yourself continually: Who needs it more? Who has the greater motivation? If you determine the other side’s needs are greater than its wants, you have the advantage.

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Probing Techniques

Guidelines in using the Probing Technique

Request permission and then ask a few closed questions to get the client’s response and to know his inclination. [Explain that you are asking these questions to be able to subsequently match your product/service with his need].

Subsequently, ask open questions to get more details. Do not ask too many questions which may irritate the client. It is recommended to provide some info about your company/product after asking a few questions.

Note: Questions using ‘Why’ and ‘Who’ are tricky and should be used with caution.

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Ask and Ye shall Recieve

The seller’s task is to translate the value from his product to the guest’s mind. The selling process becomes easy if the guest’s needs are identified before proposing your solution. Asking the right questions will help the customer identify his needs. Though there are a wide variety of questions, the most important types of questions are:

Closed Questions… where the expected response is a YES or a NO.

Leading Questions… Can be considered as a type of closed question where you get a desired response which can be either a Yes or a No. If you are able to get three Yes’, it is possible that the customer’s apprehensions and resistance will be reduced.

Open Questions… where the customer is led to give a detailed answer. The simplest way to achieve this is to use the 6W+1H (What, Why, Where, When, Which, Who + How).

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Trends in Online Hotel Marketing

Around the world, hoteliers are seeing the benefits of online advertising as they increasingly drive bookings through property websites. As a result, they are ramping up the marketing spend in that area, according to survey results by market intelligence provider TravelClick.

Two-thirds of the global hoteliers polled (66%) are now spending on Facebook advertising, and almost one-quarter (23%) have increased their Facebook ad budget for 2014. Some hoteliers are slow to spend on Facebook advertising because it is currently seen more as a brand awareness tactic than a direct-booking tactic. Online marketing spend is a growing trend with three-quarters of the surveyed hoteliers (76%) focusing on metasearch, and within that a third are increasing that spend for this year (32%). Similarly, more than four in every five hoteliers polled (84%) invests in ad words with one in three (32%) increasing that spend for 2014.

When asked which social media channels drive the most bookings to their property websites, the overwhelming leader was TripAdvisor with more than three-quarters (78%) of respondents singling out the travel review site. Both Facebook and Google+ were also named as sites that drive bookings with 11% of hoteliers selecting each of those social networks. Hoteliers should consider TripAdvisor as a key social media platform to strengthen their brand as this channel is now becoming fully integrated into the social media marketing mix.

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Thank you Capt Nair

What can I say as a eulogy for a gentleman who has inspired thousands of hoteliers? I had the pleasure of working for The Leela Hotels & Palaces for over six years between 2002 – 2008 and on several occasions, I was fortunate enough to have had many memorable interactions with this fine hotelier.

His most defining characteristic was arguably his passion for life and hotels… many a time at the Yali Lounge Gazebo at The Leela Goa where I worked as the E.A.M. F&B, he would regale me with incidents in his life wherein he thought larger than life itself and attracted success therein.

One such incident stood out for me: In the 1950’s when India was perceived as an impoverished country, Capt. Nair visited the U.S. of A to promote his company Leela Lace. On checkin into the Waldorf Astoria Hotel, he asked at the reception where the senator who he was to meet was staying. When told that he was in a suite, Capt Nair asked for the next premium category of suites and checked into this superior suite. In the evening, he called the senator who invited him to his room for a pre-dinner drink and business discussions. Capt. Nair instead invited the senator to his suite and obviously impressed the senator with his level of opulence and style in keeping with the superior suite he had selected to stay in. The business was his for the taking thereafter!

To me this story always embodied the spirit of Capt. Nair… today his hotels are a testament to his vision and ‘larger than life’ image.

Thank you Captain Nair!

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Proactive Hotel Security

Business and recreational travelers demand safe and secure hotel accommodations and responsive and friendly customer service. How can hoteliers ensure that their property provides as secure an environment as possible, while maintaining friendly customer service?

Maintain security minded customer service – Front desk staff and valets are trained to embody a customer first, customer service model. While maintaining friendly, responsive interactions with customers is crucial, it is also important to vigilantly follow all security protocols. What happens when a nicely dressed man asks the valet for his car or stored bags? As a matter of course, does the valet validate the request against identification, room card or ticket, or do they take the man at his word that that the Gucci luggage and Mercedes Benz are indeed his own? Does the front desk require identification when providing replacement access cards to those who have misplaced or lost their cards?

Keycard access review – With a few pieces of hardware and minor programming, it is possible for a criminal to gain undetectable entree to millions of key card protected hotel rooms. Hoteliers should remind all guests of the security safeguards they offer and remind guests to use their lock bars and chains and dead bolts when retiring for the evening. Room safes or securing valuables at the front desk should also be recommended if available.

Establish evergreen background screening protocol – Background screening should be an evergreen process. Re-screening employees annually can help hoteliers maintain the high level of quality staff they desire.

Control after hours access – For maximum safety, posting security personnel at front entrance and other access points is vital. Also ensure that your up-to-date closed circuit system is tracking all of the hotel’s public areas, including the parking lot, gym, restaurants, loading dock, etc.

Assess location and local crime statistics – CAP Index is recognized as the authoritative leader in quantifying the overall likelihood of crime or loss affecting a location’s safety, operational goals, or profitability. This knowledge is power and can lay the groundwork for your hotel’s safety and security plan.

Security officers that welcome and protect – Hotels must foster an inviting atmosphere for guests while ensuring safety and security. Presenting security personnel in a customer service role with officers dressed in upscale business clothing rather than traditional police or military style uniform, makes for a more accessible presence.

Bolster public/private initiatives – Establishing public-private programs that further police and security cooperation in the protection of people and property helps to enhance safety and security. When private security works in partnership with law enforcement to respond to these issues, police officers have more time to focus on solving crimes and enforcing the law.

Maintain emergency response plan and team – The collaboration between law enforcement and private security needs to extend beyond on-the-spot information sharing. Proactive security efforts and emergency planning initiatives should also involve everyone with a vested interest in safety and security. Existing plans should be reviewed annually, and evacuation and response drills, as well as and other training sessions should include those external groups as well. Involving everyone in planning and training will allow plans to be as situational as possible, and also help ensure a more efficient implementation if the worst case scenario does occur.

Part of emergency response and event management plans require the ability to ramp up staff at a moment’s notice. Ensuring that your security team is ready and available when you need them can pay enormous dividends in minimizing the real world impact of a crisis to your brand, staff and guests.

Commitment to ongoing training – Security professionals require continual quality training if they are to be as responsive and knowledgeable as possible. Given that security personnel are placed in the front line of an hotelier’s security force, it is vital that they have all the latest tools needed to handle emergency and crisis situations. Security professionals should be able to access training in a way that benefits their lifestyle whether it is online or classroom training.

Contributed by Bob Chartier, V.P. AlliedBarton Security Services

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