A Guide to Hotel Sales Made Easy

By Nathan Gawlik
Nathan Gawlik's experience includes being a General Manager of a Hampton Inn and other front line roles such as a Banquet Captain, Front Desk Agent, Housekeeper, Catering Event Manager, and Director of Sales.

Many innkeepers, property managers and accommodation providers have the misconception that sales is a passive process. Some professionals in the travel industry suggest that sales will come through your website or another third party site and therefore combine sales efforts in with their marketing. While certainly there can be overlap with the two; each are distinct. If you aren't actively pursuing sales opportunities, your hotel or lodge is likely not making as much money as it could be. Even if you are sold out a good portion of the time, if you can continue to increase demand for your product, then you can increase your rates and attract desirable clientele.

In general, when considering hotel sales, some people refer to it as group sales, using the terms interchangeably. Many bed and breakfasts aren't able to offer group block discounts because of their size. If you don't have to deal with groups, count your blessings. They can be a logistical nightmare and occasionally they can be more work than they are worth.

That's why it's important to have a plan. I've provided some general guidelines that might be beneficial to you for considering group sales. Keep in mind that a fair amount of adjustment will be required to adapt this to your specific property.

Terms of Prospecting

Before we get into the details about general group inquiries that you should have a plan to answer, let's consider some terms you may not be familiar with when it comes to sales in the lodging industry:

Corporate Groups - Corporate negotiated rates are typically highly sought after as they tend not to be too price sensitive and oftentimes the guests are seasoned travelers. These tend to be large companies that might need to travel for work like, Apple, Goldman Sachs, or Walmart. Their rates are negotiated at the corporate level.
Government - Government is one of the largest markets in the hotel industry. Do you have a military base nearby? Or other government offices?
Leisure Transient - This segment of the market is typically characterized by individuals or families often traveling on holidays and weekends. Their travel is often less frequent than corporate or government travel but their rates tend to be higher, typically paying the best available rate, or BAR.
Local Business Travel - local business travel is a key segment that can help solidify base business. Often times, smaller businesses might have sales contacts working to support them on a more frequent basis
Meetings - hosting meetings is a great way to network and showcase your property. Use these events to strengthen or form new relationships and gain repeat business.
Project Business - project business comes from knowing what is happening in your backyard. Attending local government and chamber meetings can help keep you informed so you can get a piece of this extended stay pie.
School Groups - school groups are a great way to boost your shoulder and weekend bookings, as schools and college teams travel for events. Reach out to these organizations and hand out collateral that highlights your property's relevant features.
Social Groups - make sure your hotel is the go-to place for special social events when people have a unique reason to come together.
Sports - getting sports business can be difficult. Consider using the below resources:

Tour and Travel - consider joining the Student Youth Travel Association (SYTA), American Bus Association (ABA) or the National Tour Association (NTA). A membership with these organizations may give you exclusive access to directories and other resources.
Travel Agents - Travel agents can serve as a valuable resource to curate relationships with decision makers in travel. A GDS connection is typically required to take advantage of these opportunities.
Weddings - Consider attending local Bridal Trade Shows to inform people about your property and train your team to provide tours to prospective guests. Resources like weddingwire and theknot can send leads your way.

Some of these you may not have considered before. Make an effort to determine if your hospitality business should target any of the above categories with specific messaging. Others you might evaluate and determine they aren't right for your property. The goal is establish good base business that can then be supplemented among other sales categories.

Sales You Might Not Know You Already Have

Now that we have an understanding of the different types of sales opportunities available to your hotel, be sure to consider the guests you currently have in house. The branded hotels I've worked for advise their staff to walk the parking lot looking for business logos or to connect with guests over breakfast about what they do for work. If you offer corporate negotiated rates, be sure to let these guests know.

Maybe you see a corporate logo sticker on a truck at your campground over the weekend. Consider approaching the guest to let them know you offer group corporate retreats.

Business Card Fishbowl

Another tactic many hotels use is the business card fishbowl with a sign that offers something to the effect of a discounted or free night. Winners are picked every month. Business travelers leave their business cards in hopes of winning a free night. As the innkeeper, now you can investigate who is staying at your property and why. This is an opportunity for you to offer greater personalization to these guests in an effort to garner additional sales. Reach out to these guests and ask some key questions:

"Where would you stay if you couldn't stay here?" This will reveal who your competitors are for each account. The answers might surprise you.
"How often do you travel to the area?" This will give you a sense of if you want to negotiate a special rate with this guest.
"Do you have colleagues that also travel here, and if so how often?" This will give you a sense of how lucrative this prospect could be.
"Do you book your own travel, or is it coordinated by someone in your office?" Be sure to negotiate rates through the proper channels.
"What is important to you or your business when you consider accommodations?" Don't over promise and under deliver. Manage their expectations and tell them as much if you can't meet their requirements.
"Are you ever in need of quiet meeting space?" If you have meeting space available, do what you can to advertise this whenever possible. If you have small meeting space, oftentimes it can be used to incentivize stays and help expose the local community to your property. I seldom sold my meeting space with the hopes of any significant revenue, but rather as a way to get more word of mouth adverting. This will depend on the size of the space you have available. Even a breakfast area that has doors for privacy could be reserved for an evening reception to the right guest or local club. Keep this rate low so as to encourage exposure.

Hot Leads

A hot lead is anyone actively looking for accommodations, but these Requests for Proposal (RFPs) still must be qualified to determine if they are right for your property. On all incoming inquiries of guest rooms, below are the questions that should be asked prior to quoting any group rates. This way you would have some basic information regarding the group which will help you determine if the group is feasible for the inn's best financial interest. If you have staff that work after hours, be sure they are trained on sales techniques so valuable business doesn't go unnoticed.

What type of group are you bringing? (tours, high school, college, corporate, wedding, etc.)
Number of total rooms per night?
Arrival date?
Departure date?
Do you have a budget you are trying to meet per night, per room?
Any special requirements or requests?
Is there anything the ideal property "must have" for it to be considered as you are shopping rates?
What other properties have you already spoken to?

Reach out to us, we have a great sales inquiry worksheet for you among our resources.

The Right Group

If you have a convention or gather space you might choose to restrict certain groups. Our property began to restrict birthday parties and similar gatherings because no matter how many times we told the contact not to have glitter or confetti it always wound up making a huge mess.

Understand that not every business opportunity that comes through the door may be right for you. If it's not going to work or if it will impact your other guests, it's likely not worth your time. It might be beneficial to consider the 3 Ws of sale:

Wish
Want
Walk

Ultimately, these 3 Ws are most used in negotiating contracts. It is subject to reason that you should consider these things from inception.

When looking at group business, what types of groups are you trying to attract? What would be the dream group? And what would be the nightmare group?

On a piece of paper, define your wish group, the want group, and your group that you would walk away from. Consider what you need to turn a profit, the labor involved and the logistics that you are willing to take on. Each group is different so it's difficult to have these generalizations early on but it's important to think about.

Now that you have some basic information, check the availability and published rates for the dates request. Then quote the rate according to the below discount chart. Of course, the below discounts are not available if the inquiries fall during any high demand, special event, or blackout dates. If you need, you can always get back to them within a reasonable amount of time with a quote. As always, remain focused on selling amenities, locations, and service levels, not necessarily discounted rates.

small cabin with walk out to a swimming pool

Sales Tactics

Have you ever driven up to a drive-thru or called to order a pizza and the person taking your order asked if you would like to try their super deluxe delicious dish for just $9.99? The reason they do this is because it's a sales tactic that works. The restaurants do this to try to add value and because even if you don't order this time, you might the next time you order with them. This is also why they offer items on the menu for a limited time - to create urgency.

Consider a similar tactic when speaking with prospective guests on the phone. After they have provided you the necessary information to start looking up your quote, ask if they have ever stayed at the property before. If they haven't, say something like,

"While I look up those rates for you I'd like to remind you that we have a saltwater pool open 24 hours a day and we are the only property to provide complimentary breakfast delivered to your room. Likewise, we are just steps away from local shopping, restaurants, and entertainment. We have received the TripAdvisor certificate of excellence for five years running. We are very proud of that and hope to serve you as our guest soon."

We have another article on proper phrasing and phone etiquette found here. Sell your property and why you are the best from the onset. If you don't get the group sale, you could still get a few individual rooms or overflow from other properties.

With this in mind, have your front desk agents keep an event calendar updated daily with things going on in town for office use. They should be able to update this from local sources, like the newspaper in their down time. Then add any sales inquiries to this calendar. Then you can get a sense of how busy a week might be.

discount is king typed on an old typewriter

What to Consider When Using a Discount Chart

*This chart is based on a 100 room hotel so adjust the thresholds accordingly for the size of your property.

6 to 10 rooms per night - 5% discount, 7 days prior to arrival date cancellation, guaranteed by credit card on file, signed contract and full payment on arrival day.
11 to 20 rooms per night - 10% discount, 15-25 days prior to arrival date cancellation, guaranteed by credit card on file, signed contract and full payment on arrival day.
21 to 30 rooms per night - 12% discount, 15-30 days prior to arrival date cancellation, guaranteed by credit card on file, signed contract and full payment 7 days prior to arrival date. *Consulting with GM and CRM is required.
31 to 40 rooms per night - 15% discount, 30-45 days prior to arrival date cancellation, guaranteed by credit card on file, signed contract and full payment 10 days prior to arrival date. *Consulting with GM and CRM is required.
41 or more rooms per night - 18-20% discount (depending on number of rooms per night), 45-60 days prior to arrival date cancellation, guaranteed by credit card on file, Contract and full payment 14 days prior to arrival date. *Consulting with GM and CRM is required.

Other restrictions may apply depending on different demand and supply scenarios. These guidelines are not for negotiating permanent corporate account rates but for individual non-recurring events.

If you don't have that many rooms, a simple equation to determine what discount structure you should start with is to take your range of rooms, 6-10 rooms for example, and divide it by the total number of rooms you have in your inventory. Then divide that number by 2 and multiply by 100. If this number falls below 5 percent round-up and offer a 5 percent discount.

Example:

And don't exceed a 20 percent discount even if they sell out your entire property. There are other ways to add value that don't involve discounting your cash cow further. Plus you need to account for the potential for service recovery.

Likewise, if you have fewer than 5 rooms I wouldn't consider offering discounts much at all, depending on your market, events and other factors. Consider other ways that you can add value to perspective guests other than discounting your room. Perhaps you could offer complimentary breakfast if they sell out the property or 2 drink tickets for all guests over 21. Get creative with upsells and value adds that you can throw in for free to close the sale.

Also, people love it when you're helpful. If you don't provide group lodging, consider researching who does in your area. A great place to start is by asking the prospective guest what competitors they may have already spoken with. Keep these other properties in mind and send business their way if you can't accommodate a group. Helping other businesses is just good business practice, even if they are your competitors.

Curate relationships with these other properties so you know where they like to receive group leads. This way, if that hotel does sell out, they will think of you for their overflow and in turn recommend your property.

Customer Service by Saying No

Don't be afraid to say no early and stick to your guns. We took on a wedding block at our hotel of about 30 rooms. It was a great chunk of business. Naturally, I wanted to be helpful when the coordinator asked if she could store her flowers in cold storage at the property but it was a request we certainly couldn't accommodate.

I wasn't going to be liable if her flowers were mishandled in any way. I could see the worst-case scenario flashing before my eyes already. Ultimately, I reminded myself that I run a hotel, not a storage unit. But I suggested that she contact the venue to see if they had an option for her. Don't be afraid to say no. If you don't, this can lead to over-promising and under-delivering to your guests, which can cost you in service recovery. We have another article on service recovery found here.

Summary

Prospecting group sales is an important part of your hotel business. Group business is often a fast way to sell rooms at volume. Even if you are a small property, having a group sales strategy is important so you don't get caught unprepared. Group and corporate business can help smooth out weekday disparities and smooth out revenues.

In general, my advice is to have a strategy:

Resources

U.S. Travel Association
Welcome to the National Tour Association | NTA Online
Join ASTA | ASTA

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