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Students Corner

 

UPSELLING

DEFINITION: Upselling refers to the efforts of RESERVATION & FRONT DESK AGENTS to Convince guests to rent rooms in categories above standard accommodation and sales efforts to increase Hotel Revenue.

To up sell, front office and reservation staff must be trained to be more than simply order takers, they must be trained to be Professional Sales People as upselling is a Marketing & Sales act. The personnel must see that they can up sell rooms in much the same way that a food server can sell extra items such as – appetizer or dessert.

F.O. staff should learn effective techniques for suggesting room options to guests. This involves knowing how & when to ask for a sell in a non-pressured way and to direct the sale from the guest perspective. Offering guest room options are the key to reservations & Registration sales process and it requires thoughtful planning and practice.

Although the majority of up selling is conducted during the reservation process, the F.O. desk agents are likely to have a similar sales opportunity with Walk-in guests.

UPSELLING AT F.O. CAN BE DONE IN TWO WAYS:

( I ). BY INCREASING OCCUPANCY

( II ). BY INCREASING ROOM RATE.

( 1 ). BY INCREASING OCCUPANCY:

A. Persuading unrelated singles to occupy twin rooms
Eg. – Conference Delegates.

B. Splitting Down – This technique is used when business is slow and rooms plentiful. In this case you have to pick up your customers very carefully.

C. If the rooms of the hotel desired/asked is occupied try following:

1. Offer a different type of room
2. A different date
3. A companion hotel
4. Another hotel

D. Repeat Business: satisfying guest with facilities and services offered by the hotel.

E. No Shows:

1. Cutting the no. of no shows
a. By putting a clause for no show.
b. By checking the guest stay and unconfirmed bookings.

2. Imposing financial penalties by –
a. Non refundable deposits
b. Cancellation Fee

3. Finding last minute replacement booking
a. Wait-List
b. Contact an organization which receives last minute enquiries

4. Overbooking


(II). BY INCREASING AVERAGE ROOM RATE

1. Sell hospitality: Involves using the appropriate body language, smiles, calling guest by name (Eg. Mr. _____________)
2. Sell Value: You can always find something good to say about the facilities and services on offer.
3. Show the Room:
a. Physically
b. If not possible physically then show photographs.
c. Sales person’s descriptive power.
4. Sell High
5. Know the product.
6. Believe in your product

OWNERSHIP & AFFILIATION

I. INDEPENDENT HOTELS
II. CHAINS

I. INDEPENDENT HOTELS:
Independent hotels have no ownership or management affiliation with other properties and have no relationship to other hotels regarding policies, procedures or financial obligations. Eg. Family owned & operated hotels (called Mom & pop hotels).

The biggest advantage to these hotels is their AUTONOMY to run the hotel.

Independent hotels can be operated under two forms:
1. Sole Proprietorships
2. Partnership


A chain is usually classified as operated under a :

1. Management Contract
2. Franchise
3. Referral group


II. CHAINS

Management Concept Franchise Referral Groups
Management Fee Management Lease

CHAINS – AH & LA defines a chain as any group of two or more properties operated under a common name.

Chain impose certain minimum standards, rules, policies & procedures on their affiliates. Several different structure exist for chain hotels. Some chains have strong control over the architecture, management and standards of their hotels. Other chains only concentrate on advertising, marketing and purchasing.

OPERATIVE ADVANTAGES OF CHAINS

1. Expertise in site selection
2. access to capital
3. economies of scale (purchasing, advertising, reservations etc.)
4. appeal to the best management talent
5. brand recognition

MANAGEMENT CONTRACT

A management contract is an agreement between the hotel owner and the management company. Under this contract the management companies are paid to operate the hotel whether the hotel is profitable or not. Profits & losses accrue to the owners, who pay the management fees as they pay other expenses such as insurance, taxes and interest.
When business is good and profits high, a lease may be negotiated. The management co. pays a rental to the owner for the privilege of operating the hotel. Profits & losses in this case accrue to the management company.

Management companies are organization that operates properties owned by other entities. These entities range from individual business people and partnerships to large companies. Eg. For taking loan from leading institutions the group could contract with a professional hotel management company to operate the proposed property on long-term basis.

Management companies appear to offer a unique advantage to property owners and managers because of their expertise in operations, financial management, staffing, marketing and sales and reservation services.

FRANCHISE:

Franchising means selling the right to a name, a product, and a system along with exclusivity for a specific area. In the lodging industry most organizations offering franchises have first established the quality of their PRODUCTS & EXPERTISE in operations by developing parent co. hotel (THE FRANHISOR). Franchise organizations have typically set standards for design, décor, equipment and operating procedures to which its properties must adhere. This standardization enables franchise chains to expend while maintaining a consistent, established product and level of service.
Franchising allows the small businessperson (Franchisee) to operate as an independent, but provides many of the benefits of the chain. For a fee, the hotel adopts the name and trademarks of the seller (Franchiser) and receives services in turn. The franchiser helps with:
1. Feasibility studies.
2. Site selection.
3. Financing
4. Design and planning
5. Mass purchasing
6. Management consultation
7. Wide advertising
8. Central Reservation system

The franchisee and the parent company are so alike that the guest cannot differentiate between the two. The basic differences observed between the two are:
1. The chain (Franchiser) does not own the franchise property, the franchisee does.
2. The chain does not manage the property, the franchisee does (Under a separate management contract, the franchisee could hire the chain to manage its property).

For the support – the franchisee pays both an initial franchise fee and a percentage charge per room night. But that’s not all, the franchisee also pays a rental for Company Sign; a percentage of volume fee (Or as per room basis) for advertising; a fee for access to the reservation system; and a per reservation fee for each room booked.

Following are the best-known franchise companies:
1. Carlson Hospitality Group – Radisson, Colony & Country Inns, TGI Friday.
2. Choice Hotel International – Clarion, Comfort, Econo, & Quality.
3. ICHG – Intercontinental, Holiday Inn & Crown Plaza.
4. Hospitality Franchise System – Days Inn, Park Inn, Howard Johnson, Ramada & Super 8.
5. ITT Sheraton
6. Marriott – Countryard & Residence.


REFERRAL GROUPS:

Referral groups consists of independent hotels which have banded together for some common purpose. While each property in referral system is not an exact replica of the other, there is sufficient consistency in the quality of service to satisfy guest expectations.

The referral organizations offer a way to fight back with less loss of identity than the franchise. Referrals are cooperatives structured to provide one service only – MARKETING. CRS, standardized quality, joint advertising, and are recognizable logo where the original, limited objectives of most referral groups. There is no interlocking management, no mass purchasing, no common financing – nothing but an UNIFIED SALES EFFORT.
The referral is a means by which small entrepreneur can compete. It has been especially popular with small motel operators.

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