Michael Cockman is a hotel marketing specialist with long and worldwide experience. During a 25-year career he has coached managers and sales teams to achieve outstanding results. He believes passionately in the power of experiential learning and now coaches and mentors business owners and managers, using this book as a framework. Michael is based in Oxford.
This book is dedicated to the memory of John Mackinlay (1939–2005) latterly Managing Director of Hotel Management International (HMI) Ltd. He was an inspiration not only to me but also to all the many people who came into contact with him. He will be missed by us all but particularly by his family.
A childhood fascination with aeroplanes took me to British Airways, where I probably worked for more years than I should have. But I learnt a great deal that I was able to put to good use later on. It was Jacques Schneider of Profile who eventually persuaded me to try for a job in the hotel industry where Michael Holland was my initial great influence at The Gloucester Hotel (now the Millennium Gloucester). Tim Stableforth came all the way from New Zealand to persuade me (admittedly without much difficulty) to take a marketing role that included covering Fiji and Tahiti. When I returned to the UK, John Mackinlay of HMI took the same approach except that the hotel in the Caribbean was disposed of soon after I started!
In putting together this practical guide for owners and managers of independent hotels and guest accommodation I would like to acknowledge the assistance of the team at theHotelCoach; everyone at How to Books, particularly Melanie Jarman who has been a very kind and helpful editor; all the people I have coached and mentored over the years and those that I have interviewed during my research. With special thanks to Carol Whitaker, Martin Philips, Steve Alexander, Jacque Richardson and Peter Cockman for invaluable help with checking technical aspects of the text.
A book like this has some unique challenges for the reader. Unlike a John Le Carré novel there is not much of a story to pull you from one page to the next; the tension does not really build in the same way. However, you have bought the book and presumably you really do intend to read it and not put it on your bookshelf along with A Brief History of Time as a project for another day.
Like any novel, this book does have a sort of logic to it. I will ask you to look at where you are now, decide where you want to get to, and I will give you some ideas about how you might get there. The implication of this process is that some change is required; indeed only by changing what you do now will you have any chance of achieving outcomes that are different to those that you now experience.
I wrote this book as a practical guide for owners and managers of any independent accommodation business. It sets down some of the sales and marketing tools and techniques that are available to help you develop your business. It doesn’t matter whether you have a large or small hotel or call yourself a hotel, pub, bed and breakfast or guesthouse; you might also be a college or training centre. The challenges are all the same.
I hope that this book will also be useful to sales executives that are new to hospitality and need to understand how the business works.
Don’t worry; this is not a theoretical book about ‘marketing’. There will be no marketing definitions and certainly no esoteric discussions about whether you need to look at the five or seven ‘P’s of marketing. I have not included any graphs or charts and I hope that you won’t find this a drawback. I have also deliberately not included sample advertisements, direct mail letters, brochures or internet sites. My reasoning here is that I want you to learn techniques that will enable you to produce great material for yourself; there are far too many ‘me too’ approaches in the hotel business and much of what is copied was not very good in the first place! This book is however definitely about marketing, explaining some of the tactics that can help fill your hotel rooms and generate extra revenue.
Although much hospitality training and education is still regrettably very product focused, the influence of sales and marketing within the hospitality business has changed for the better over the years. When I first started in the hotel business 25 years ago I joined a hotel, with over 500 rooms, that in the 10 years since it opened had not had a full-time sales manager: the activity had been covered by trainees on rotation! Contrast this with my last company where over 50 per cent of general managers were ex-sales managers.
I understand why you may not be in a position to make sales development your first priority but, hopefully, by the end of our time together I will have persuaded you that the subject is too important to put on the back burner.
Although I was very daunted by the thought of writing this book, I am a little sad to have completed it. I hope that you enjoy reading it as much as I enjoyed writing it.
If you provide hospitality to travellers you are continuing a very ancient calling. Nowadays you don’t have to send your overbooking to a stable, but the essentials of the business remain the same. What has changed and continues to influence your business are the new and different aspirations of both your customers and your guests.
The activities of some of the listed hotel groups and investment vehicles make for very interesting reading, as does the changing role of the internet as a distribution medium. However we get so caught up in providing the latest amenity to score over our competitor that we sometimes forget that what we should really be focusing on is satisfying customers and guests by solving their problems.
In my opinion there are some major influences that form the background against which you manage your hospitality business.
The meaning of the word ‘brand’ or ‘branding’ can change with the context, and sometimes brand is a verb and sometimes a noun. For some people it is a trademark (brand name) and for others it is the embodiment of their expectations from a service or company. Whatever it is, a brand becomes something that people trust, and branding is about making an emotional connection with your customer or guest. A company or organisation can develop a successful brand but the value of the brand is all in the mind of the customer.
Although brands have been around since the advent of packaged goods in the 19th century, it is not long ago that brands became associated with every type of service too. At no time has there been such a fixation on brands as a means of defining oneself. We now accept that the label is on the outside of our clothes. The new generation of purchasers select their experiences and consumer goods on a different basis to that of their predecessors.
There are many easily recognisable brands such as Apple, Coca-Cola, Calvin Klein, BMW, Nokia and Nintendo, all with worldwide sales. Maybe you are wondering what this has got to do with your hotel? As I said before, the new generation of customers is much more aware of brands and will appreciate your efforts to be consistent with your promise as embodied in your brand. Your brand is the way that you differentiate yourself and show that you have made the effort to align your service with the expectations of your customer. You can learn from some of these global companies in the consistent way that they portray their organisations and in the way that ‘personality’ can be attached to products and services. Another bonus of working on your own brand is that branded services also generally command higher prices.
Whenever I talk to owners or managers about increasing sales it is not long before the conversation comes around to the difficulties of delivering customer service because of the general lack of commitment from staff.
Is this a general lack of motivation by employees or do we just not understand that their work ethic may be different to previous generations? The young people we are talking about are probably those born between 1976 and 1994 and are variously referred to as ‘Generation Y’, ‘Thatcher’s Children’ or the ‘Echo Generation’; maybe Don Tapscott’s (Growing Up Digital) term the ‘Net Generation’ is more appropriate since they have grown up immersed in a digital and internet-driven world. They have also seen that dedication and obedience to your employer does not always bring rewards: their parents are likely to have had more than one job and may well have been made redundant, maybe more than once. What price loyalty?
They also know that, in the new culture of celebrity, hard work is not necessarily the quickest route to financial rewards. If you are in the right place at the right time you can take a shortcut, even if it is via Big Brother!.
The education system has changed, with much less need to keep information in your head. The most important attribute now is knowing where to look for that information. But this generation does seem to be better at multi-tasking: possibly the product of a lack of concentration? They can think fast and are often creative. It is against this background that you have to construct your own methods of working with your staff. They do not need to be managed much differently from any other group before them. Just let them know that what they do matters, explain everything in detail, be open with your communication, give them responsibility, praise them, set a good example and make their work day fun. Easy really!
Although it is not possible to pinpoint exactly, it seems likely that an increasing number of your guests will be those born in the period 1964–1976 and referred to as ‘Generation X’. Due to the falling birth rate, there are fewer of them than their parents, the Baby Boomers (1946–1964) from the post-war period, but there is now a greater proportion of women in the workforce, continuing the post-war trend. They have embraced new technology but they also remember the time before the PC and the DVD player.
This generation have embraced brands wholeheartedly, maybe in rebellion at their parent’s sensible choices based on utility and longevity. They embrace risk and prefer to be freelance rather than stuck in a corporate hierarchy: they were the architects of the dot.com boom.
The development of the boutique hotel has coincided with their rise through business organisations. This product customisation has appealed to their quest for emotional security, independence and informality. Yet now that the large international groups are rolling out ‘boutique’ hotels, has this particular segment had its day?
The attitudes of this customer group will impact on your business in some way. What you do about it depends on your willingness to listen to what they want and how far you want to go to provide it. Is it economically viable?
The development of the internet has had a huge impact on the hotel business and will continue to influence the way that you do business. There are now many new ways to distribute your rooms, increasing the transparency of whatever you do. There is also a disturbing reliance on room rate as a measure of quality.
There was a time when the key to successful hotel keeping was preventing your various market segments finding out the rates that each was given. I remember when I first started in the business we used to get very upset when a tour operator started to book corporate guests at the group rate we had given him. Now that I think about it, it wasn’t really his fault: we just omitted to put in the right conditions that erected the right ‘fence’.
The conventional complicated rate structure is now very difficult to sustain. You have to think through any action very carefully so that you keep control of the rate initiative. Corporate clients are very willing to cancel their reservations and rebook at the special internet rates if these undercut their rate.
Third-party suppliers have become very powerful but their sites make it extremely difficult to get across the quality of your product, so that rate becomes the only judge of quality. This will have to change if they are to continue to play a valuable role in your distribution mix.
As you generate more and more business through the internet you will need to make some key management decisions. All these new distribution channels plus the needs of your own website demand a high degree of technical expertise and a major daily time commitment. Can you afford to develop in-house expertise or is this an area where outsourcing makes sense?
MARKETING AND HOTELS
Those of you who have worked in the chain or franchise sector will have become a little perplexed by the different ways that each company organises itself to generate sales revenue. The process is often broken down into sales, marketing and revenue management and much corporate energy is spent on internal disputes and arguments about who is responsible for what and to whom. Even the sales organisation is disrupted every so often, responding to the latest trend in clusters, regions or individual accountability.
As an independent operator you have the choice to make a sensible organisation that is simply focused on the task in hand. You have no need for arbitrary organisation divisions and can allocate tasks to the most appropriate person in your team. You can take a much more creative approach to investing money both in developing new business and keeping the business you have, knowing that you have in place the right systems to measure the benefits from any particular action.
The other benefit of the independent operator is that you are not so bound by the short-termism of the City, with its expectations that the profit in each 12 months will definitely be better than the last, whatever the cost. You know that growth strategies sometimes take a long time to reach fruition.
Marketing activities need the same disciplines applied as any other of the other business activities:
- Leadership: This can be from the front or from behind, however you decide to set up your organisation (explored in Chapter 3) but however you do it you need to be decisive and inclusive. Effective leadership gives forward momentum to the business, without which it will ultimately fail. Imagine an aeroplane without such forward momentum; it would definitely fall out of the sky.
- Buy-in: Nothing will work unless you gain complete commitment from your team members (see Chapter 3) since they have to deliver what you promise and at the same time be a part of the wider sales team.
- Consistency: Building a successful rooms business is a long-term exercise. Whether it is building relationships or advertising, no action is effective unless you give it enough time to work (explored in Part 2). Of course you need to measure what you do but sticking to your plan is vital.
- Relevancy: Although this may appear to be an obvious concept, it is now more vital than ever that you analyse every activity for its relevancy to your target market. Customers are assaulted by so many messages that if you don’t accurately target messages that are relevant you will lose your opportunity to communicate. It is also imperative that any new initiatives are relevant to delivering exceptional customer service; it is no good investing in new facilities or campaigns if you haven’t empowered your team and secured their buy-in.
What marketing should do above all is enhance ‘shareholder value’. It does this by you investing appropriate funds in tactics that lead to increases in operating profit and thus your asset value. This profit (earnings before interest, tax and depreciation) is directly affected by your ability to:
- retain the customers you have;
- increase their average rate/spend;
- persuade them to buy more often;
- attract new customers.
Everything in this book will involve one or more of these growth opportunities.