WHAT TYPES OF CUSTOMER ARE AVAILABLE?

There are hundreds of opportunities to fill your rooms and your meeting facilities. The only limitation is your imagination and the scope of your individual facilities. If you only have five rooms and there is good regular demand from some local businesses, some of the opportunities highlighted here may not be very interesting. Indeed many of these opportunities are created by your proximity to the facilities concerned. For instance if the nearest university is over half an hour’s drive away your potential from that source will be limited.

Make a note of anything you think might work and see what techniques you may be able to use to attract the business. Business often comes from the most unexpected source, so cast your net very wide before you home in on the real potential.

Note that there are different sources for the same type of business and it is sometimes a complicated chain. For example, a business traveller might make a booking via a travel agent who accesses the GDS (Global Distribution System, see 70), with the reservation then being delivered to you by your representative organisation. This is still a company booking, with the travel agent being the source and the GDS and your representative being the technology.

Below are the various types of business that are available to all hotels. How many are available to you will depend on your location and facilities.

Airline crew

If your hotel is located near an airport you have the opportunity to accommodate airline crews. Generally airlines try to schedule their flights so that crew do not have to be away from home, but sometimes there is a very early flight that necessitates an overnight stop. An airline will make a long-term contract for a certain number of rooms each day, often over weekends and in the peak and the off-peak season. If an airline contract will not be more than 20 per cent of your total room count then it is good business to have. Because of the perceived benefit to the hotel the room rate is generally very low, often around 50 per cent of your headline rate, although this depends on the local supply situation.

The most difficult equation is the amount of business that you will displace by having a crew. You need to balance definite revenue (at a low average room rate) against your expectations (probably at a higher rate) and also take into account the fact that airline crew do not add much to your food and beverage revenue.

Crew are also very demanding guests, often needing to sleep during the day and checking in and out at strange times. You will need to rearrange your cleaning schedules and alter some administration procedures.

The first point of contact is the local station manager, to find out the local need and the timing of the contract negotiation. Very often a committee made up of a union representative, the local manager and the crew manager from head office makes the decisions.

Associations

Association meetings can be national, regional or international, and they can be booked anything up to ten years in advance. Generally the meeting has to be invited to a specific city by a local organisation and you might well be involved with this organisation through your local hotel association. However, these meetings often have a large number of delegates and need to take place in a non-hotel facility.

The potential for a hotel in these circumstances is in accommodating overnight visitors to the meeting. You need to be wary of allocating a large proportion of your rooms to the organising committee, particularly if there is a large proportion of the available hotel supply located between your hotel and the venue. Not only is it likely that there will be significant cancellations for the less prime locations as the date gets close, but also you may have to guarantee your prices. Sometimes it is more profitable to pick up individuals displaced by the visiting meeting delegates.

If the reservations are not made centrally then you may be able to get a list of delegates from the Association or from their appointed organiser for your own individual follow up.

Charities

Charities generally do not have much money to spend on meetings and accommodation. However they do need to get their staff and volunteers together from time to time. You will have times during the year when you know you are going to have weak demand both for meeting rooms and for bedrooms. These dates may coincide with the needs of particular charities but in any case you will find that they are more flexible than other organisers. Decide on your best rate and approach the charities direct. Start with any that have a local association, since they will probably be responsible for any regional meetings.

Coach companies

Coaches company work both on their own account and also on contract to larger group operators. They can be a direct source of business for hotels that have at least 25 rooms; those that can accommodate a coach-full. Many coach companies arrange their own tours, from their home base mostly, naturally enough to tourist destinations. They also arrange one-off trips to concerts, sports events and country houses and gardens.

If you feel that there is potential for your hotel, you have the space and the rate that you can achieve seems attractive, you can propose a joint venture with the coach company. Sharing the advertising costs makes you a partner rather than a supplier and puts you in a stronger position. To reach these companies you can purchase a list and make direct contact but one of the best ways to see if there is potential is to look out for any coaches in your area and then phone the number on the back of the coach.

Rates tend to be low but for a corporate hotel that would otherwise be empty over a holiday period, the room revenue plus the incremental spend can be very helpful. Operators usually ask for one free place per 20 passengers, which usually works out as two single rooms for the driver and escort in return for a full coach load of around 50 passengers.

Companies/organisations

For many hotels the weekly pattern will be business travellers Monday to Thursday and leisure travellers Friday to Sunday. The relative demand will dictate your room yield, since the weekend demand may well be higher than the corporate demand. If you are in an isolated rural location then demand will be limited to travellers stopping off en route from one place to another. Room demand will generally be for single use, preferably of a double room. If the likely visitors are contractors, then they may well be interested in twin rooms, to keep their costs down.

Whatever you do be consistent. Pitch your rates at the target market with the greatest potential, taking into account the style and service of your hotel but also the other guests. Don’t target one market and then give up when things are not going to expectation and drop your rates to fill up with say contactors, who often try for four to a room to keep the costs really low! All this will do is drive away the business that you do have and you will have to start all over again.

Organisations generate both individuals as well as groups, although many of these groups are associated with overnight meetings.

Direct

Gaining both individual and group business from local companies depends on your local relationships. You need to find out who is the decision maker (probably a local contact but it can be the travellers themselves) and do some research to find out what is the potential and how the reservations are made by each different organisation. It is likely that you will need to ‘steal’ business from another hotel and this can take time and ingenuity.

Once you have worked out how much potential revenue can be gained from a particular company over one or two years you will be able to decide how much effort and money to put into soliciting the business. You can entertain decision makers individually or in small groups at your hotel but if the potential is large enough and there are a large number of companies you can also plan some ‘open’ days, to show off your talents.

To gain direct business from companies that are not local is quite difficult, since the decision makers are hard to find. Exposure on third party websites does give you the national exposure that you need. It may also be sensible to join a marketing consortium that puts some effort into reaching potential individual national and international travellers.

Through travel agents including in-plants

Many companies have such a large travel requirement that they appoint a travel agent to either operate from their office (an in-plant) or manage the account from the agent’s office. Usually these agents are paid by way of an annual management fee from the company, a practice that has been accelerated by the reduction in airline commissions. The benefit to a hotel is that the agent works with the net rates that you have given to the company and does not expect a commission from the hotel.

If you have not given any such special net rates to national companies you can still obtain ad hoc business from companies if you give special rates to the agents. These ‘corporate’ rates need to be discounted by at least 10 per cent from your regular rates and are commissionable to the agent.

The drawback with business through these in-plants is that you are not able to establish a relationship with the decision maker, since the agent wants to keep you out of the loop, in order to justify their role.

If you are in a location that benefits from international business travel then you will need a way of reaching this potential. Travel agents worldwide use one of the four main GDS (Global Distribution System) to access information about hotels and you will need to ensure that you are featured on all of them.

Through hotel booking and venue finding agents

These specialist agencies have grown up as a result of the reduction of travel personnel within companies who have the time and the inclination to search out the best deals for their company’s business travellers. These agents work on behalf of their client companies to find hotel rooms and conference space that suits their brief.

Apart from a few of the larger agencies that work on fees, these booking agents usually charge commission to the hotels so that their service is free to the organisation. For meetings, commission generally needs to be paid on both food and beverage and rooms. You will have to set your own rates but try and avoid increasing commission to ‘buy’ the business, since in the long run all this does is increase the revenue to the agents and all hotels lose revenue.

These agents will often ask for quotes from a number of hotels and very often reservations get cancelled. Your offer will be one of a number presented to the client, so the better the agent knows your hotel the more likely they are to recommend you. Always respond immediately (within two hours preferably) to any enquiry and do explain when the final offer will be sent. Treat the agent as you would any other prospect but work hard to get the companies to approach you direct in the first place. Always respect the fact that the prospective client is the client of the agent but in the final analysis it is up to the client how they want to book.

From consortia

There is trend for companies to get together to maximise the use of their buying power. It doesn’t happen very much because it has proved quite difficult to get their administration right for both the companies and the hotels. Again the drawback is that you are removed from the decision maker and cannot gauge accurately the benefit to your hotel. Be very wary of giving special rates unless they are more specific about the real travel potential.

Government

The bulk of government business is very price sensitive. Room rates and food allowances are usually set annually and no one has any room for manoeuvre. You can either take the business or not. If you operate in the appropriate price bracket the business can be very regular. Much of it comes through hotel booking or venue finding agencies, so there is the commission issue to account for. Investigate any local prisons or government establishments and treat them like a local company in terms of sales approach.

Local government does generate some demand. They entertain dignitaries from other cities or trade delegations from abroad. There may also be a visit from the appointed twin town. You need to keep in touch with the local contact in the council chambers.

Groups

One off

Groups come in all shapes and sizes and for any number of purposes. It could be a group of 15 on a cultural trip, 45 going to a concert or 50 senior citizens on a Bowls tour. The secretary of the group may contact you direct but more likely you will be approached by a travel agent who will ask you for a quote. If you want the business, then find out exactly the needs of the group (early, late or special meals/room needs etc) and make sure that you include these special arrangements, plus any other ideas you have, in your offer. Be careful of the special needs of senior citizens, particularly related to walking distances, stairs, luggage movement and noise from other guest activities.

If you are in a tourist area, an international conference centre or an incentive destination then there may well be potential from ground handlers.

Ground handlers provide all the local help that an overseas operator needs to make their group’s itinerary go smoothly. A ground handler books the coaches, arranges the airport transfers, makes meal reservations and orders tickets for attractions. They also often book hotels, although this is rarely without the involvement of the overseas client, who is the ultimate decision maker.

Series

When a tour operator offers you a series of groups throughout the year it is easy to get carried away. The dates will probably fall across a few of your prime dates, but the rest will be in your off-peak troughs that are difficult to fill. If you accept this series it is quite likely that the peak dates will perform well but as soon as you move into the shoulder period the groups are smaller or are cancelled. You will then have given away some peak days in return for nothing.

Always check the agent’s performance, although one year is no guide to what will happen the next. Only accept group series if its non-performance will not have a huge impact on your business; maybe stick to less than 20 per cent of your occupancy?

Health services

A hospital itself is bit like a hotel anyway and indeed there are some very successful hotels actually attached to hospitals.

Convalescing in a hotel is a lot cheaper than tying up a hospital bed. Any hospital is likely to generate a need for hotel rooms, whether these are from patients, relatives, visitors or staff. Make contact initially with the office of the chief executive.

Leisure travellers

Senior citizens

I have included senior citizens here because they are one of the few segments of the leisure market that can travel outside the weekend. Of course you will need to look at the achievable rates since it could be that your weekday corporate business will have a better average rate. Even if this segment is not normally that attractive to you, you need to have some mechanism in place to promote those weeks when business travel reduces, especially around Christmas and other holiday periods. There are specialist websites and magazines that appeal to seniors, so as long as you construct some appropriate offers that are tailored to this market it is possible to generate good business.

It is a mistake to lump all the over 50s together. Although there are now 15 million people over 50 in the UK, they do not conform to the previous stereotype, and each segment needs a different approach.

Weekend visitors

We all know that weekends are three days: Friday, Saturday and Sunday. In some places we can also include Thursdays but that is another problem altogether! There is always the difficult balance of filling all days or at least the Friday and the Saturday. Weekend guests are some of the most demanding and time consuming to serve and although their yield might be lower than the weekdays, if you are a corporate hotel the revenue can be the difference between profit and loss.

Whatever your location, there is always something that you can do to promote your weekends. The skill is in promoting something that is appropriate. If you have a city centre location there is no point in promoting a relaxing get-away weekend. It may be true but it isn’t what guests expect from a city break. They want to be active and see and do all the activities that are available. If your location is less than perfect then include free transfers to where the action is. The key to success in the weekend market is accurate targeting. You need to package together all those things that are going to excite your target market. Differentiate yourself from the hundreds of options available, be creative and you are halfway there.

Internet

If you include all the local area activity options on your internet site, you give yourself more chances of being found by a search request through a search engine. Speak to all the local suppliers such as airports (flying lessons), race tracks (speed experiences) and ask them if you can put some reciprocal links in your site and theirs; not only will you have some fabulous packages but you will increase your chance of being found from an organic search.

Families/couples

Families can be a good market but depending on the size of your hotel it may be sensible to choose to service families or couples and not both. Business hotel facilities are equally good for weekend guests but couples do seem to have a preference for full size baths: Jacuzzis are a bonus but worth a supplement.

Past guests

Your past guests can be a very useful source of fill-up business in less popular times of the year. Make sure that you keep names and addresses and preferably e-mail addresses. For example, if you expect that January and February will be slow you can mail your past guest and offer them a ‘past guest special’ of, for example, complimentary accommodation as long as they pay for meals. You may not want to promote such a deal publicly but to a discreet list you have a built-in justification.

There are some quite sophisticated ways to keep your list accurate by cross checking against people that have died or have moved. Sometimes the cost of this software and the effort is greater than just sending a letter and seeing if it comes back, particularly if you confine your mailing to those that have stayed within say the last two years only.

Military

If you are near to a military base there could be some demand, although these bases tend to be self-sufficient. Demand is more likely if you are near a naval city, where ships dock and relatives visit to welcome ships back to port.

Depending on the country there is often a distinct armed service travelling segment where special rates do generate overnight stays.

Schools

School-related business comes in many forms, much of its potential related to food and beverage. Teachers often meet every week for an informal lunch but they do also have larger end-of-year parties. The school secretary is the best person to contact.

Boarding schools are a good prospect since they often have parents visiting from a long way away. They come for the beginning and end of term and for speech days. Pupils also have reunions from time to time. Again the school secretary will have details of advertising opportunities.

Show business

Although there are a lot of prima donnas about, this business can be very important. Depending on the quality of your hotel you could accommodate the main artist, the support acts or the back stage crew. The theatre will your first contact point since they will have their programme fixed up to two years in advance.

The nature of their activities makes these guests appear very demanding, but it is usually the timings that are awkward not the service. Artists have been known to regale guests in the bar until the small hours, which is fun for them but not the barman who was expecting to go home at lam. Good planning is the key, as is making sure you get paid before the impresario leaves the country.

You may well be approached by artist’s representatives who will try to convince you that it is in your interest to give them complimentary accommodation for the privilege of having their client to stay. I have never found this to be a very good foundation for a satisfactory relationship. If it fits in with your client profile and you can definitely generate some useful publicity it may be worth considering, but do get a written agreement as to what you are giving and what you are getting.

Sport

Teams

This is a very specialist market and generally more suitable for large hotels with a range of facilities. Teams need extra rooms for staff, a leisure club and very flexible catering. Bookings are made by the team manager or if it is an overseas tour maybe a specialist travel agent. There are also minor and amateur sports that need accommodating but the lack of funds usually means that they choose student or very low cost accommodation.

Teams, particularly football, do look for training facilities in the close season. These teams need easy access to training fields.

Supporters

If you are near to any sort of sports venue there is potential. Even if the sport is minor or amateur and the team doesn’t stay in a hotel, there is still potential from supporters and officials. An agent often makes the reservations, but they can also be made by an official from the sport’s governing body.

Tourist boards

Local

Local tourist organisations are usually set up to promote a local town or area and are often funded by the local council as well as the tourist attractions. They try not to give any particular priority to any one hotel but that does not mean that you should avoid treating them as a valuable client. If you feel that contributing to their budget is not something that you can refuse, you have to try to get as much business as you can through their office; in season they often get a lot of callers on the day so can be a good source of fill-up business. Give them good rates and don’t forget to thank them for their efforts. To make it work for you, consider being appointed to the local tourism committee.

National

Independent hotels are very focused on developing their own business but national tourist activities are aimed at growing the total visitor numbers to the country. You have to decide how much effort and money you are prepared to dedicate to their efforts to grow the size of the cake.

You must be very careful about advertising and events that are set up to promote the whole country. Measuring the outcomes for your hotel individually can be very problematic. For instance even if that journalist from Australia did write something favourable about your hotel in a newspaper in Adelaide, how is it going to really generate extra room nights for you that you can count?

Universities

There is certainly some business from any sort of university, college or further education establishment. Students are a limited market mainly because they don’t have much spare money, but they do like to drink and socialise. Many university societies have annual balls and these can be good business. It may be worth taking a stand at freshers’ week, where new students go to see what clubs and societies to join. Here is a good opportunity to meet the decision makers on other stands.

Students’ relatives are the best potential for bedroom business, particularly at the beginning and end of term and at graduation time. You can advertise in student publications and in the students’ union.

For visiting academic staff, accommodation is usually provided at the university but this depends on each college’s facilities. Contact the registrar to find out what events they have during the year.

Weddings

Weddings can be a tremendous revenue earner but to make them go well takes a lot of time and dedication. These functions do not suit all hotels, but don’t think that because you don’t have fantastic gardens or a very large function room it is a market you cannot reach. It may be economic to purchase a marquee, even second hand, and rent it out for the wedding season. Depending when this season finishes it is often worth leaving the marquee erected so that you can promote Christmas parties.

Demand depends on what alternative facilities there are in the local area and you may be surprised at the potential for your hotel. Cost is also a major factor and weddings come in all sorts of shapes and sizes, so there is likely to be a sector of the market that will appeal to you.

These complementary companies can also form the basis for participants at a bridal fair, preferably in your hotel. You provide the room free and the other participants pay a fee of around £ 75 to £ 100 each, which is used for all the advertising and literature that you need. These annual events provide great exposure in the local market and can generate good contacts for later follow up. If you participate in other bridal fairs, stick to your local market. It is unlikely that any fair outside of about ten miles from your hotel will yield much potential.

Much of the wedding market is based on reputation and if you do a good job your business will grow year on year. However you do need to show that you specialise in this market by providing specialist staff and very specific promotional material. There is usually a slight increase in reservations just after Christmas, so be prepared with a plentiful stock of brochures. Remember to take your own photographs of the event; keep these and any special menus and your testimonial letters in a book, which you can show prospective brides (and their mothers).

There is also an increase in demand for civil partnership ceremonies, and you may well find this a profitable speciality.

Many prospects visit hotels at the weekend to check you out by trying your restaurant and visiting your toilets. You need to ensure that there is always someone on duty who can show people around and highlight the main benefits of your hotel. Ensure that you collect at least the following so that the lead can be effectively followed up:

• name and address of both parties;
• telephone number;
• numbers for the wedding breakfast;
• numbers for an evening function;
• timings;
• budget;
• extras list (tick boxes);
• bedroom requirement;
• invoice details.