Frightening Customers Away
Food and Beverage

Are you telling customers to go away

By 2010, it is estimated that approximately 1 billion people will be travelling worldwide. Reservation inquiries for hotel rooms, conference facilities, and other services, whether by telephone, letter, or Internet, will be a hotels primary source of sales. Regrettably, despite the opportunity for increased sales, many hotels will not effectively follow through a prospective enquiry.

This phenomenon has plagued the hotel industry for years. Grohman (1966) wrote 30 years ago: Hotel operators spend considerable sums to promote their offering. Yet when this advertising generates reservation inquiries, some hoteliers miss the opportunity of converting these leads into confirmed reservations. Today regardless of whether you own one hotel or you run a major commercial organisation this phenomenon appears to remain true.

Increasing competition means even if you choose to spend more on advertising and promotion your efforts might not generate long term success. While promotion is important, hotels should realise such efforts are only the most visible tip of the marketing iceberg. An empirical study conducted by Hartley and Witt (1992) supports Grohman’s observation. The study assessed the responses of 83 hotels to a general telephone inquiry requesting information for hotel conference and function facilities. The survey results suggest hotels miss many opportunities to convert inquiries into sales. For example:

  • 35 percent of the inquiry calls were not directed beyond the person answering the phone;
  • 77 percent of the hotels did not ask about the details of the event and thus could not send a written response addressing the potential client’s specific needs; and
  • 2 percent of the hotels took the opportunity, during the call, to invite the potential client to visit the hotel and view the facilities.

The ineffective handling of the telephone inquiries illustrates how hotels fail to capitalise on sales leads either by mishandling or ignoring the call. Proper handling of inquiries might result in a steadily increasing contribution to the property’s guest base
(Abbey, 1998).

A follow-up study by Hartley and Witt (1994) reports how hotels can capitalise on their marketing efforts by using the marketing concept.

Bearden et al. (2001) define the marketing concept as “an organisational philosophy” that contains several elements:

  • an organisation’s basic purpose is to satisfy customer needs;
  • satisfying customer needs, requires integrated and coordinated efforts throughout the organisation; and .
  • organisations should focus on long-term success.

Hartley and Witt (1994) present several suggestions of how the hotel’s response can be more customer-oriented and which staff efforts could be coordinated to meet marketing objectives. Their study recommends hotels:

  • use information technology to personalise their responses;
  • employ conference coordinators familiar with the principles of buyer behaviour and effective sales techniques; and
  • use job scripting for less skilled staff.

Can hotel management afford to ignore or mishandle reservation inquiries?

The costs of a non-reply or an ineffective response may include:

  • a strong negative impression (“they don’t want my business”);
  • the loss of present and future business (and if part of a hotel chain, losses for affiliates of the chain); or
  • the loss of business from friends and associates of the letter writer.

On the other hand, a well-presented follow-up letter with a supporting information, tailored to the inquirer’s needs, can do the following:

  • build a relationship with the inquirer;
  • generate extra business;
  • provide a self-selected list of qualified leads for the services of the hotel; and
  • make the advertising and promotion effective, personalised and directed towards the inquirer’s specific needs or problems.

Conclusions and recommendations

To address sales enquiries adopt a quality management systems approach.

  • What communication is currently being conducted?
  • How is it handled?
  • Create a flow diagram that shows:
    • where an inquiry is routed;
    • who handles it; and
    • how it is handled.
  • What is the current attitude toward letters of reservation inquiry?
  • What is needed for support materials?
  • Create a training program for all employees involved in the system:
    • the art of response;
    • customer orientation;
    • create the impression of an individualised function; and
    • Seek opportunities to make the function better (from the customer’s point-of-view).

All employees should be taught to view the hotel as whole business not compartmentalised departments. Each department needs to be reoriented to think in terms of total revenue maximisation by selling all services and amenities offered by the hotel that could meet the inquirer’s needs.

To assure the success of the program, hotels might wish to initiate a mystery inquiry program that is similar to the mystery guest program. To test the responsiveness to letters, telephone calls of reservation factors such as:

  1. Response to the letter of inquiry – if the enquiry was responded to how quickly was the letter and or telephone enquiry answered;
  2. Were specific sales opportunities addressed and presented in the letter.
  3. Were up-selling opportunities presented e.g.up-sell from a regular guestroom to a suite;

Effective follow-through on reservation inquiries, whether by telephone. Letter, or Internet,
requires a personalised response to the client’s specific needs. It must be customer-oriented. A standardised generic letter or a packet of information does not necessarily respond to the inquirer’s needs. It is in the hotel’s best interest to tailor its response to the inquirer.

As Forsyth (1999) points out: Letters last. Unlike telephone calls (which are not often recorded) they stick around to be reread and reconsidered …. Remember too that brochures do not remove the necessity for a good letter. The two must work well together (and some overlap of message is fine), but a good letter is more likely to get read right through than a long brochure – especially if the brochure’s text is dull.

It does not really matter if the letters of reservation inquiry are answered in the sales and marketing department or in the catering department or in a department established to handle these letters. What does matter, ultimately, is how well trained the hotel employees are and do they have the orientation of looking for total revenue opportunities for the hotel?

References

JOURNAL OF SERVICES MARKETING, VOL. 17 NO. 4 2003, pp. 379-392,

Open University Business Library, Emerald.

Christopher Bird Author

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