By Don Farrell
Who wouldn’t want to make a few hundred thousand more in immediate room revenue and see most of that go to the bottom line? In fact, it may be the largest account your hotel can go after, particularly if you are a focused service property. Where can you find this low-lying fruit and how can you harvest it?
Your Single Largest Account is at your Front Desk by Converting More Reservation Inquiries
And this is the best form of revenue…..the single room requests that come into your front desk in the form of phone inquiries and walk-ins. Imagine what losing one of your top accounts would look like. With front desk reservation inquiries, if you lose one, you are still booking hundreds of thousands of dollars more in incremental room revenues…..yes, hundreds of thousands of dollars. Most hotels don’t even know it, because they don’t track conversions (reservations made as a % of incoming calls/walk-ins). They also don’t know that the vast majority of hotels in America are converting between 30-40% and they should be converting 80%. How?
- By using elite service and selling protocols that have proven results.
- By implementing training processes that include reinforcement which keeps the process measured, accountable, tracked, and even tied to a cash incentive for the front desk agents who use the right skills. As a side note, 99% of all training fails to succeed because they don’t know how to reinforce it properly. More on that in future postings.
Higher GIS/GSS scores, greater guest loyalty, lower staff turn-over and a hotel that distances itself from its competition.
Essential Skills to Increase Hotel Front Desk Conversions
Having conducted training for over 10,000 hotel companies, we know the right skills needed and optimal process to convert phone and walk-ins into revenue:
- Answer the phone in 3 rings or less
- Use a unique greeting that distances you from the competition
- Qualify the caller/walk-in so you can customize their stay
- Personality Partner so how you say something is more impactful than what you say
- Create value and the experience
- Offer room type options and rates
- Ask to confirm (80% of untrained hotels don’t even ask to make a res)
- Be ready to find out why they are not confirming in an elite way
- Overcome their concern with fallback options that don’t negatively affect your ADR
- Convert 80% of the inquiries at higher rates than you are getting today
Owners, take your new-found incremental revenue and calculate using the right lender multiplier and you now have considerable additional equity that you can borrow against for renovations, raises, incentives, buy more hotels and the list goes on.
Cons of Using a CRO (Central Reservations Office) for your Hotel
Why not send your calls to a CRO or CRS? We suggest hotel owners and operators randomly perform shop calls to find out what a caller goes through.
Depending on the CRO, hotels may find their goals are not aligned with the hotel goals.
- To sign them up on their loyalty program after a typically long hold
- To communicate using texts instead of talking to a live person
- To make a reservation within their brands, but not necessarily at your hotel because their fallback is to find a less expensive hotel than yours
- Some CRO’s ask the caller if they would like to hear a pitch about their vacation clubs
- You are paying to have this call transferred to a CRO
- Their value proposition is either next to none or very little said with little impact
- Some brands “assume the sale” which is very concerning to the majority of callers because the language sounds like “so how would you like to guaran tee this, or what credit card would you like to use” when the caller isn’t ready to buy yet.
Leverage a CRO or Keep Calls in House
It is important to understand the ROI on using a CRO versus keeping calls in house. A well-trained hotel front desk associate will always perform better than a well-trained CRO agent (if you can find one) simply because the hotel associate knows their hotel and area better than someone who is reading from their computer screen.
CRO’s will tell you that the ADR they get is higher than what your front desk can get. While this may be true, it is usually because your hotel is fielding LNR (Locally Negotiated Rate) requests and this is taking your rate down, but the rates are justified because of the volume they are delivering. LNR’s don’t typically like talking to a CRO hundreds and even thousands of miles away, so they prefer to keep the call local at the hotel of their choice.
Many owners and operators like transferring calls to CRO’s because they feel their front desk associates can service the guest better if they don’t have to field reservation requests. There is a way that your front desk can be taught how to treat both phone inquiries and guests standing at the desk with the same loyalty driving focus. Everyone wins and you save the cost of transferring those calls to CRO.
Next Steps
Calculate your incremental ROI. X (let’s say 2 nights) X your TRANSIENT ADR (number of unmade reservations per day (I find 3 to be a conservative number that usually works almost anywhere) X your ALOS (average length of stay…. let’s say 2 nights) X the TRANSIENT ADR (not the overall ADR, but the transient ADR….we will use $125 in this example) X the number of days you don’t fill per year (285 is a safe number where you go down with at last 3 rooms) = $ Incremental revenue upside (in this example it’s $213,750) X the number of hotels you manage or own X 80-90% GOP at focused service hotels. Then implement a simple tracking system at the desk to calculate what your current call volume and conversion rates are. Then consider how to get your folks trained so they know the right reservation inquiry protocols, know how to drive stellar service and field phone inquiries at the same time and know what to do if the desk is way too busy to handle phone requests and still convert 86% in the process. Now you will be on your way to generating hundreds of thousands of dollars at just one hotel.
If you are choosing whether to use a CRO or keep calls in house, ensure you have proper training for your hotel associates. A well trained front office associate may deliver higher ROI because they know more about their hotel than an agent who reads copy about your hotel from a screen. If your associate is too busy to use the right skills, they should be taught how to call the prospective guest back and convert at an even greater than 80% rate because the consumer is getting stellar service and they don’t even know what the availability or rates are yet.
