Dear Hotel Industry:
Here we are, the largest, best-trained sales force in the history of the hospitality industry. There you are, walking a tightrope between group, incentive, direct, Internet and travel agent business. You shoot sales arrows in the air, hoping your melange of methodology will somehow mean increased sales.
We get it. You need to generate business from as many sources as possible.
You want to have your room service cake and eat it, too.
You pay for group departments, incentive departments and industry sales departments.
You hire some of the best and brightest for these jobs.
You call on corporations, companies and individual travel agencies.
In addition to all of the above, you create expensive websites to promote inexpensive room rates.
You once did that with the big Internet retailers, but you became concerned one day when you saw that they were approaching 40% control of your total room inventory.
So you decided to market on the Internet yourselves.
Wow. That's a lot of arrows in the air. That's a lot of company-lease cars, a lot of gas spent getting to your clients, a lot of expense-account entertaining.
We don't deny you are doing the best you can, and no one would expect you to ignore any of these avenues of potential revenue amid the current economic malaise.
But I suspect that you have learned what we have learned: The Internet can be an angel of discounting of the type that can destroy the loyalty of your best clients.
So most of you now have your own sites, and you are far less eager than you once were to share your room inventory with those who sell to the lowest bidder.
The self-bookers and those who believe that ultimate truths are to be found on blogs have had their way with you.
Novice travelers and industry types masquerading as consumers have been able to intercept and surgically remove the quality claims of your properties.
Currently, we are looking at a projected 71% occupancy rate in the U.S. and an average room rate from all hotel sectors of about $107 per night.
Meanwhile, the luxury sector is only going to be able to generate an average room rate of $301 per night, according to PKF Hospitality Research.
We don't care all that much, if truth be told, about having to hire the friends of Tony Soprano to separate you from the $30 commission we might make on that average luxury room rate.
Through all of this, you smile and say we are partners. You include your commission to us in your room rate and pocket it when the client books with you directly.
So, despite the cost of maintaining your own websites, your own sales force and your own specialty sales organizations, which essentially compete with us, you feel good about all that extra money hitting the bottom line when you score a direct hit.
But you're smart. You will figure it out. You will learn what other segments of our industry have learned: The agency distribution system is, long term, the most cost-effective means to sell travel products of quality.
We just want you to know that we're here to assist you in any way that we can. We're quite fond of you and are appreciative of all the little things you do for us.
It is also true that yours tends to be the professional wing of our industry. That observation has not escaped us.
There are, as you know, a number of domestic and worldwide hospitality markets that need help. Las Vegas is one of those.
CNN recently reported that the city had the highest foreclosure rate in the country, one of the nation's highest unemployment rates, a sharp decline in visitors and the most ambitious upscale hotel building program in the nation.
So who will fill all of those new rooms in Vegas?
The folks working in hotel sales along the Strip have their work cut out for them in trying to fill those rooms. Lots of arrows to launch into the skies above Mandalay Bay and the fountains of Bellagio.
The European hoteliers have, with some exceptions, seen a sharp decline in the percentage of U.S. visitors this year.
Why, even the Italians are starting to grumble a bit about their U.S. sales figures.
So, what to do?
Might we suggest that you start by engaging us in your efforts?
We want to help you fill your rooms. I wonder if you will let us.
Here are just a few things we can do for beginners:
1) Change your sales calls into partnership agreements.
Our staff gets to meet yours, on-site.
Or, if this is not practical, we communicate via email.
You make us the world's top experts on your property. By providing real knowledge, which might include the best room numbers, the names and phone numbers of on-site contacts and dinner reservation and other services that are commissionable and easy, we can create business as true partners.
We'll put that in writing if you do the same.
2) Commit to a policy that any commission that does not arrive within 30 days of a guest's departure is automatically doubled.
3) Provide us with information sheets that enable us to book ancillary arrangements at your property on a commissionable basis.
4) Agree to the notion that when we introduce a guest to your property, that guest remains our client for the next two stays should they be enticed by offers on your website.
Why in the world should one business form a partnership with another business that tries to steal its clients? Especially when the first business is the one that introduced the consumer to the product?
5) Talk to us. Have a member of top management call every travel agent with whom you want to have a serious relationship at least once a year.
Or we can just leave things as they are and compete with one another.
Contributing editor Richard Turen owns Churchill and Turen, a vacation-planning firm that has been named to Conde Nast Traveler's list of the World's Top Travel Specialists since the list began. Contact him at [email protected].