ITB 2024 Special Reporting
Overcoming The 'All They Want To Hear Is The Rate' Mentality.
By Doug Kennedy
Tuesday, 6th October 2009
As an active hotel industry trainer who works with hotel and call center reservations agents representing all market segments and geographic locations, it is extremely intriguing to observe firsthand the various ways in which hotel and resort companies are responding to our recent economic conditions which for almost all markets, have been trending downward.

Yet despite all this, there are somehow superstar performers in even the most negatively effected geographic markets.  In fact I have observed firsthand clients who are operating in some of the most down-markets; where the comp-set is looking at -25% RevPAR vs. 2008, they are somehow carving out a RevPAR performance that matches or exceeds 2008.  Other call center clients have somehow managed to increase their call conversion rations even while overall call conversion for most locations is down because even online bookers now call to double-check the rate offer.

So what are they doing differently? It all starts with having inspired, in-touch owners and financial leaders who knew in advance that the conga line of record years of RevPAR growth couldn't last forever.  These hotels were well-poised to realistically adjust their rates according to a) demand in their local market and b) their position in the local market.  Not only did they have a handle on pricing, but they also had become experts on marketing and distribution before the downturn.  Therefore, they were able to offer the right price to the right person at the right "place" or channel.  Not to mention they were able to turn on the "faucets" of other new hotel distribution channels as they continue to emerge.  

Another common attribute is that they have also recognized that their frontline soldiers in the battle against the erosion of RevPAR is the frontline employee who answers the phones everyday, whether in the group sales department, on-site reservations, at the front desk, or at a third party call center.

Regardless of title, they are all faced with the value-driven deal-seekers on the other end of the, who do in fact sometimes lead off with the question:  "Hello, what is your cheapest rate?"  More often than not they don't divulge that they've been online already and know the rates you are showing at several websites, in addition to your own.  Worse yet, they occasionally react obnoxiously to the rate by saying "Don't you know there's a recession going on?" 

Today's callers are armed with insight, and thanks to TripAdvisor and the social medial, possibly more knowledge about your hotel than the representatives they are speaking with, especially if they are off-site at a regional sales office or call center.

If you're like managers who closely monitor RevPAR these days and know enough to ask the right questions of your sales and reservations staff as to why the average rates have gone down so drastically, no doubt one response you've already heard is "Well, all callers want to hear about these days is the rate."  

Having heard this myself voiced honestly as a concern of the reservations and sales people I train each month, I have so far restrained myself from saying "Okay, you are right!  Let's just give them our lowest price on the phone right up front!  I'm sure they have done all of their homework and know what a great property we have to offer.  Let's just e-mail it in the subject line with the price as soon as we get their dates."

Instead I say with restraint, "That's a very good question…" and refer back to my latest favorite saying:  "If you want to get what you've always got, just keep doing what you're always done."  I sometimes adapt it specifically for hotels to say, "If you want to keep getting your exact fair share of revenue as your comp-set, just keep doing the same things that you are competitors are doing." 

In RevPAR as in life, to get what we've never had before we must do what we've never done before.  With all this being said, let's acknowledge that the lodging industry environment today is as challenging as it has ever been since the early 1990's.  Your sales, reservations, and front desk teams need help.  Here are some discussion points for your next meeting or in-house training:

- Know the competition.  Nearly every hotel has to deal with a local competitor so simply drops their rate for the short-term goal of filling beds.  Instead of pointing out their obvious short-comings, point out what is unique about your hotel. 

- Over-deliver on service from their first inquiry.  Despite how desperate most hotels are for new business, it still amazes me how long the average response time is.  While phone calls and e-mails do seem to be returned more promptly these days,  many sales people lag behind in their follow-up, or fall short on demonstrating their attention to detail with follow-up.

- Sell value over price.  It is such an old sales axiom, but even more so today our sales people have been beat-up so much on price by the value-driven deal-seekers that they sometimes even forget to embellish details regarding the added value of their destination, location, amenities, not to mention the details about the special packages and rate-offers which so many hotels have in place today.  

- In all the noisy confusion of modern life, keep remembering relationship selling.  It doesn't take much extra effort nor time to find some commonalities with the fellow human beings we call prospects, clients, and guests. This plays out when you have a real conversation that includes brief and appropriate side-bar chats about the weather where you are, the background noise such as pets or kids, or possibly even that you know the city from which the caller is calling from.  
- That being said, remember you are speaking with a real person and it is easy to have a real conversation verses a transaction.  Even if you field 25, 50, or 75 of such calls a day, the inquirer bases their entire first impression solely on their own experience. 

- Since today's callers have most likely seen an overwhelming amount of information online, make those web photos come to life by enriching them with your own personal stories, examples, and remembrances from other guests that relate to the inquirer's situation or circumstance.

- Since everyone these days seems to be seeking some kind of a special deal, make sure to reference the "normal" rates (as in the rates charged during periods of peak demand) as a reference point before you offer any type of discount rate or package. 

- Sell to "emotion" verses "intellect.  Put simply, people can always have their most basic lodging needs of four walls and a bed fulfilled for considerably less elsewhere in your locale.  And when you switch the lights off they all look the same once you fall asleep.  Instead of listing the same basic features of your hotel that everyone else in your market segment has,  make those features come to life by providing descriptions that allure and entice versus inform and notify.  

- Make sure your promotions, rate offers, and special packages can be properly explained by your sales and reservations team before the advertisements are released.  Ask your senior marketing and revenue management staff to test-drive their promotions by role-playing it with a frontline salesperson. 

By discussing ideas like those listed above with your frontline sales, reservations and front desk teams, you can give all of your associates the tools they need to,  more often than not, overcome the "All they want to hear is rate" mentality. 
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