Hotels and resorts – especially independents – are facing skyrocketing costs of distribution on third-party channels, cutting in to your margin and overall success.
The key to overcoming this challenge is simpler than you think.
By leveraging your direct channel with a few proven technologies and processes, you will drive more mobile business, increase your RevPAR and ultimately reduce your reliance on OTAs.
Plus, you will capture more data about your guests, increase satisfaction and loyalty, and increase guest lifetime value.
See how you stack up with current industry benchmarks. Hear real examples from the hotels and resorts themselves who have used these solutions and generated millions in previously undiscovered revenue for their bottom line.
In this webinar you will learn:
recognizing the low hanging fruit
inbound voice channel optimization
7 non-negotiables for reservations
outbound selling automation techniques
CRM lead management
formula for calculating revenue growth with these tactics
Panelists for this FREE webinar are:
Michelle Marquis, VP marketing and strategic initiatives, NAVIS
Brise Carpenter, client success manager, NAVIS
Kevin May, editor and moderator, Tnooz
This webinar took place on Tuesday 9 December 2014
16. DRIVE
2. Capitalize on Existing
Demand
– Remarket to not-booked leads
– Track not-booked reasons
– Outbound calling
17. DRIVE
3. 1-2-1 Marketing
– Use guest preferences for
marketing
– Use stay history to target
messages
18. CAPTURE
1. Guest Data
– Guest demographics
– Household personas
– Guest preferences
19. CAPTURE
2. Call Metrics
– The usual
– Call scoring, coaching sessions, lead follow-up
time, revenue from lead follow-up
– Put action to the data!
20. CAPTURE
3. Call Volume
– Peak periods
– Calls coming in after hours
21. CAPTURE
4. Not-Booked Leads!
– Caller data
– Reason for not booking
– Guest data that booked
elsewhere
22. CAPTURE
2. Your Data is Key
– Train and reward for collection &
accuracy
– Use your data real-time
– Integrate your phones with your PMS
– Keep it clean
– Provide it to the agents
– Collect data on not-booked calls
23. Resources
GROUP
• People
• Goals, strategies, tracking,
segmentation, accountability
• Sales environment
• Sales training
• Marketing
• Technology
• Sales management (pipeline, leads)
• Trade shows, promo budget
• Sales trips
LEISURE
• People
• Service environment
• Secret shopping (at best)
• Marketing – done well (expensive)
• Trade shows (maybe)
24. CONVERT
1. Training
– Change the mindset
– Ongoing 1-2-1’s
– Teach them the right skills
and behaviors
25. CONVERT
2. Incentives
– Based on behavior
– Based on data
– Don’t forget the Rez
Manager!
26. goggles
DRIVE
• Know what’s working
• Invest in higher profit
CAPTURE
CONVERT
• Enhanced call metrics
• Call volume &
staffing
• Not-booked leads
HOW TO
Change the mindset
Consistent training
DRIVE, CAPTURE &
• Incentives
CONVERT SUCCESS
28. Thank you!
Send your questions and comments to
kevin@tnooz.com
Replay and presentation of webinar will be available on
www.tnooz.com
Editor's Notes
Intro. (Kevin May)(3-5 min)
Initial Poll (location, geo)
Company Type
Geography
What are you hoping to gain by attending this Webinar?
Want to shift share from OTA’s to direct channel
Want to find a way to capture more of the most profitable business
Want to do all I can to capture the demand already coming to me
I thought this Webinar was about X
Introduce the speakers
The Direct Channel (Michelle M.)(20-22 min)
The OTA Effect
We’ve heard from hundreds of clients that they feel like OTAs and 3rd Party Channels control their inventory and revenue. We’ll call this the non-direct channel – it offers lower profit, less control of your inventory, reduces brand loyalty for your property and discourages repeat guests, inhibits rich data collection, may cause negative guest experience when trying to change or cancel a reservation and they can take up your agents time for a lower profit reservation.
In order to overcome these major challenges we recommend a Drive, Capture, Convert strategy… and it works. It’s essentially a circuitive pattern – You focus on driving demand, capture data from that demand, and ultimately converting the bookings.
Source – from 2011 (page 27): http://cdn.hebsdigital.com/cms/pressroom/11_hotelsmag_controllingdistributioncostsinhospitality_articlehotelsmagazine_april2011.pdf
HeBS Digital Says: “The direct online channel is by far the most cost-effective channel — 10 to 15 times cheaper than the OTA channel and four to 10 times cheaper than the GDS travel agent channel. The direct online channel contributes to a significant number of voice reservations, as much as 40% of additional bookings, as confirmed by industry research.”
OTAs aren’t all bad
They do offer heavy distribution and can act as a great billboard to lead travel planners to your website and information
But some revenue sources are better than others. Say you booked that $100 room through an OTA, have you accounted for the commission? When you assess group channel revenue, do you include ancillary spending, such as food and beverage? When your analysis goes deeper than room rates, you make more cost-effective decisions. We’ll get in to this a little more on what the most profitable channel mix is.
EXPAND ON RISING COSTS OF COMMISSIONS AND WHAT’S TRENDING FOR THE FUTURE
Weigh the value of each channel – the metric to use is not RevPAR. It’s Cost Per Acquisition
OTAs, group, corporate neogiated, leisure online, leisure offline - What does each channel cost? You have to measure CPA to make the right decisions – don’t get hung up on RevPAR. And when you have good strategies around decreasing your CPA for the most profitable mix, your RevPAR WILL increase.
So what is the most profitable channel with the lowest CPA? The direct channel.
The direct channel, or reservations taken by your team, is one of the most important revenue drivers for independent resorts and hotels – particularly those in the upscale, upper upscale, and luxury segments. According to HSMAI research, direct bookings through the voice channel average a 31% ADR premium versus the national hotel average.
And according to HSMAI research again, nearly 2/3rds of all reservations in these segments are handled by property personnel – the majority through your Reservations Team, and then the remainder through front desk/concierge.
ADD more about mobile, mobile % of traffic, yet only X% book online (SOURCE)
The focus for most properties has been out of balance, which has led them down the wrong path. It’s like a bright, shiny bunny. You’ve got to focus on what matters to not be led astray.
In the last 10-12 years, the Direct Channel has received some attention, but nearly 100% of the focus has been on the digital realm: online bookings, websites, digital ads, etc.
But one growing piece of the digital world is eroding all that we work so hard to build and protect: OTAs are commoditizing the industry by promoting price as the main differentiator, demanding ‘best price’ from properties and in some cases dictating volume, and then taking 20 to 25% of your revenue top line revenue.
This does not effect RevPar as you know but it sure effects profitability.
Now, while the digital world offers some necessary and worthwhile business building tools, our clients have identified two significant challenges:
Online bookings account for only 25% os a property’s total bookings on average.
Skyrocketing distribution costs (OTAs!) are seriously eroding margins.
In fact, the Hospitality Asset Managers Association reports that guest acquisition costs skyrocketed 23% from 2009 – 2012, about the same revenue growth rate for industry revenue. As an industry, we’re no better off than before, just a lot busier! This is from Jeff’s ppt. “NAVIS Live Tour”
ADD IN MORE INFO ON ALLOCATION COSTS AND WHAT”S GOING ON RIGHT NOW
On top of that, if you’re only converting 34.5% (the industry average), that leaves more than 65% of your incoming leads that are unbooked, untapped. You can remarket back to these guests with automated programs and strategies. Outbound calling to unbooked leads is one of the fastest ways to drive serious revenue fast. You just have to have the strategies in place to capture the data on those unbooked callers.
Hoteliers have access to a HUGE opportunity sitting right under their noses. But unfortunately, we’ve found most don’t have the right tools and technology to make this possible. Thinking of your channel mix holistically will help you capitalize on your existing demand and discover some simple, new ways to drive demand that was previously untapped. There’s that first step in our Drive, Capture, Convert strategy.
With that, now is a great time to turn it over to Brise Carpenter – he has some fantastic examples of performance and revenue growth that hotels and resorts across the country are seeing with this strategy and some key moves your property can make to put this Drive, Capture, Convert strategy in motion.
I’ll start off with some fun numbers. What happens when hotels and resorts use these strategies to take back control of their direct channel?
JC Resorts
In their first year…
Increased ADR 7% across all of their properties
Increased call conversion 9% at one example property
Increased revenue through outbound calling strategies by $250,000 at just one of their other example properties
TradeWinds Island Resorts
In their first full year following the Drive, Capture, Convert strategy…
13% increase in conversion
13% increase in ADR
Most of their success centered around some new call center training, better, automated reporting, and an outbound call program with new phone technology that helped them follow up on unbooked leads.
KeyLime Cove
This is a state of the art indoor water park outside of Chicago. In just one month, using similar outbound techniques and tools as TradeWinds…
Increased their conversion 10%
Generated $80,000 in new outbound call revenue
This is huge. This doesn’t even account for the other added benefits of their new strategy – they also saw improved guest satisfaction scores and were able to better track ROI for promotions and marketing campaigns.
Vacation Myrtle Beach
This is a cooperative group that now operates 14 resorts in Myrtle Beach, South Carolina. Prior to the formation of the co-op, their reservations departments were separated at each independent property. Last year, the NAVIS team worked with them to consolidate their call center in to one cutting edge call center – aptly named Shine Studios.
Increased conversion by 25%!
On top of that, they generated $1 million of purely incremental, outbound revenue in their first 10 months.
Just in case you’re curious – we did get permission from these clients to share these numbers publicly… This type of information is obviously very sensitive and we value our client confidentiality.
These results were all made possible with the right balance of their channel mix, with increased focus on their direct channel and the Drive, Capture Convert strategy. We’re going to go in to some detail on the Drive, Capture, Convert strategy and how to put it in to play.
Drive
Marketing Tracking
Give each of your marketing campaigns a unique TFN.
Give each a unique URL keyword to attribute all of your web traffic
Optimize your website so that each time your campaign’s keyword is used in the click through link – it changes the TFN on your website for seamless integration. Now all of your offline and online marketing can be tracked together.
All of this will tell you what works so you can focus your ad dollars on the campaigns that drive the most demand.
Capitalize on your existing demand to drive more
Next you should be remarketing to that demand that comes in that doesn’t book. Most hotels average conversion is 34.5%. The remaining nearly 70% are still hot leads…
Your system should allow agents to track not booked reasons to allow for follow up.
Outbound calls typically convert at about 18% - that’s huge incremental revenue.
LifeCycle messaging
And lastly, you have a wealth of data on past guests that can be marketed to. Which most of you are probably already doing. But if done correctly – it can be an extremely powerful tool.
Stop e-blasting your entire list. It’s not effective and is a waste of perfectly good contacts to a prospect that can damage your brand.
Use guest preferences and stay history to target your messages in a 1-2-1 fashion.
Some examples may be pulling up all of your past guests who took advantage of a ski promotion. You don’t have to discount again but can send out a powder alert to drive last minute bookings to catch some fresh snow.
Also say you pull up guests of a particular unit type you need to fill that stayed a year ago, but don’t have a future stay on the books. Remind them of their time and encourage them to book again.
Guests want to be valued as individuals – when you market to them in a way 1-2-1 way they’ll value your brand and become loyal return guests. Plus… using these methods, you’re not spending any additional money to drive this demand.
ADD MORE DATA HERE
Capture
So now that you have this rich demand, you have to capture data in a few different ways. You have to have existing data to drive the demand we just talked about, but once you start capturing it more effectively, the demand you’re able to drive multiplies. Here are some of the main data points you should be capturing and how you should be maintaining it.
Tracking
Your guests are everything – you need to know them intimately and good data makes that possible. Agents should have the tools in place to capture the following data:
Guest demographics
Household contacts (allows you to de-duplicate various household profiles in your PMS, this is especially important with millenials who have many different email addresses and want to stay off the radar. There is technology to do this automatically and present the information to the agent before they even answer the phone. Millenials lead the way with travel growth so this is definitely something you should be implementing)
Guest preferences – When guests share information with someone on property it speaks volumes when that information is relayed properly. This is difficult with so many different employees front of house, but when it’s tracked in one, strong data engine it’s easily accessed for various purposes. Agents should collect information such as early-arrival times, events the guests may be coming for, if they have any children, feather pillow preferences, etc.
You should be tracking “the usual” call metrics such as conversion, abandonment (which most of you are probably already doing, if even at a minimal level), etc. But also deeper agent performance factors with call scoring, coaching sessions, lead follow up time and revenue associated with lead follow-up.
But tracking it is typically a manual process for many of you. You’re pulling it from different systems and comparing it to your PMS reports. Some are even having their agents write it down on printed call sheets. This can work – but it’s taking up a lot of your time. Your efforts should be spent in making connections with that data – turn that data in to intelligence. Your people should be able to do what they do best and have the right data all in one place, with some of those connections already made so they can focus on making creative, intelligent business decisions.
Use this information to plan and pay out incentives – we’ll share some incentive best practices shortly.
Use this data to route calls most efficiently. All agents have different strengths. NAVIS’ system automatically routes certain types of calls to specific agents, based on criteria that you set.
You should also be monitoring call volume for proper staffing levels. We always recommend that properties take calls 24/7. According to NAVIS data from more than 300 properties, you’re missing out on 23.5% of booking inquiries if you’re not taking calls 24/7. It’s not always practical to staff at this level – NAVIS RezForce is our call center product that takes just after hours or overflow calls. And when you have NAVIS Narrowcast that call and reservation data is shared directly with your team in your own dashboard, instantly.
The reality is that not every caller will book. (We’ll get in to how to address this in a moment) And not every guest that stays with you booked through you directly. But take that opportunity to turn every guest in to your guest. They may have booked through a 3rd party channel, but you have the chance to secure their direct bookings from now on. Capture their email, note their preferences, and offer an incentive to book directly next time.
But what good is the potential for rich data if your agents don’t collect it properly? Or if it’s separated in to various systems that don’t offer solid, customized reporting? Crap in crap out, right? The integrity of your data is what makes it actionable.
Train your agents on good data collection behaviors and reward it. You should then track agent “collection” and accuracy, a very important component to agent success. This makes a great incentive plan component.
The data is real-time. Access your data at any time and be able to view your own custom reports, easily.
A good phone system integrates with your existing PMS software because you probably already a lot of information on your callers, and that way you can collect information on the unbooked callers too.
Keep it clean! Consider your data as household personas. Duplicates can be automatically rolled in to one household profile that contains guest preferences, past stay information, etc.
Put that data in front of the agents. With a streamlined dashboard, your agents will know the caller’s demographic information, any past reservations, if they’ve called recently, who spoke with them last, and more. When they have the data they have more confidence to make the sale and they feel more accountable to contribute to the data.
The most important part… collect data on those unbooked calls. These are hot leads. They open up the opportunity for regimented outbound calling huge revenue like we saw in the hotel case studies presented earlier. Again, the average conversion on these types of calls is actually 18%.
If a group sales manager produces 10,000 room night in a year, you are probably seeing $1.5 M in room revenue with a discount off of BAR of around 20%. Your leisure sales manager will produce about the same amount of room nights but at a higher rate. However resources of time and money between these two revenue channels are significantly different.
Convert
Here’s a good gut check on whether you’re focusing your energies properly:
Consider the rez department at your property. I’ve visited # hotels and resorts just in the past couple of years. And it never fails when we first show up… the rez office is back by the loading dock, no windows, old technology, post-it notes everywhere. How can a reservation agent sell under these conditions?
Now compare to a group sales person (if your property has a group sector). High travel budgets and commissions, goals, quotas and accountability. The reality is that the average reservation agents brings in 85-90% of the revenue as the average group sales person. And at a fraction of the cost! It’s much easier to effect change in the right sales environment and see results.
Your property needs a shift – your reservations department is not a team of order takers, they are a team of sales makers. Here’s How You Do It:
Training
Again, change the mindset, order takers to sales makers. Training should be ongoing and consistent to reinforce the right behaviors.
It’s not a twice a year thing – it should be twice a month. This is ongoing training. You should be regularly listening to and scoring calls then reviewing them with your agents one to one and use the results to set the goals for the next month. Metrics to review should include conversion, call scoring, and revenue goals. Invest in a system that makes this easy on your Reservations Manager, one that makes it easy for them to select a good sample call and see clearly what the call resulted in plus caller data, all in one place.
At NAVIS, our client advocates help train on various skill sets including collecting the right data, accuracy in data collection, solid communication and closing skills. With the right training, we’ve seen properties boost their conversion to 40%, 50%, or higher.
They practice brutal honesty. In order to save you from committing reservation suicide, they may have to tell you some things you don't want to hear...about how someone you thought was your star performer is actually costing you money and should be put in another seat...about how you need to be more involved and stop delegating everything to your lieutenant. Their goal as should all consultants’ goals – is purely your success.
Incentives should be behavior based. The 5 basic types of behavior you should encourage through incentives are:
Accurate Call Results
Accurate lead forms
Meet call scoring goals
Meet individual and group inbound call conversion goals
Meet overall revenue goals
Incentives should be based on data, and they should change. Identify the performance factors we discussed that need work and develop incentives from there.
It’s not just your agents. Your Reservations Manager should be offered incentives for leading their team to success. They should also be having regular one to one reviews of the data with the Revenue Managers or Director of Marketing – however your hierarchy is laid out.
A couple example incentives…
You can structure the compliance to the discussed behavior types as a percentage, with a designated monetary payout associated
Basic accuracy and following through with the new strategy and procedures should come first. Once that’s mastered then you can make agents eligible for conversion-based payouts. The great thing about this plan is that it gives the agents multiple steps to strive for and look forward to. Using the data associated with the performance measurement also helps you justify the expense and the return your property is seeing from the improved performance.
Here’s what we know…
- a 5% increase in conversion can result in an average of $2500 more in revenue per room, per year
A 2% increase in voice “outbounding” can equal about $1500 more in revenue per year.
So we’ll let you do the math here on your own room count… with some of the NAVIS best practices discussed, that’s an additional $4000 per room, per year.
All you have to do is pay attention to the direct channel by:
- Driving more demand to the direct channel, knowing what is working and where to keep investing (from your channel mix to your marketing dollars)
Capturing more data through enhanced call metrics, monitoring call volume and proper staffing, collecting data on not-booked leads and focusing on the data!
Converting more inquiries in to bookings – change the mindset, implement the right training and make it consistent, and then reward that good behavior using your data