The price, of course, determines your profit, but the price depends on number one your relevant costs and demand for what you are selling! You create demand through successful marketing! In our industry, hospitality, the perception of what a branded hotel has to offer has a value because you must adhere to certain service and quality policies and standards. The potential guest has an expectation. For an independent hotel, the guests perception is formed based on your price, marketing descriptive information and comfort with their point of contact (front desk, phone reservations center or website).
Depending how close you set your price to your fixed and variable costs determines what level of occupancy you need achieve to show a profit. There are of course good days and bad days! Preferably more good days than bad for the year.
With these fundamentals in mind, it is important to look at how many sales opportunities you receive and how many are won and how many are lost. Closing the sale has very little to do with price! A sale is made because the prospect believes what information they have about your hotel’s location, services and availability. A sale is made because the prospect is comfortable with what they receive at the point of sale; a courteous greeting, a speedy response, attention to their specific questions in a clear informative response and an understandable informative professional offer.
These sales fundamentals apply especially to corporate rate negotiations as well as group and meeting sales opportunities. In today’s world, more than half of your sales are concluded online. How do you present your hotel, how accurate and descriptive is your information and how quickly can you respond to an inquiry with a professional response and offer? You may want to track the number of opportunities and your closure ratio for a certain period of time just to see what how successful your sales activities really are. How many front desk opportunities did you have? How many website visitors did you have? How many RFPs and group requests did you have? And, finally how many of each in these categories were sold?
We are all sales people in one way or another because we all need to convince another human being of something every day. We are need to make our point or convince someone that we are right or that we need something in return. How responsive are you? How do you provide information? How do you measure your success?
For my own reasons, I ask you to take a look at the Lodging Interactive eProposal Rapid Response System to help your hotel sell more corporate rate deals, groups and meetings.