Hotel Representation Alert Part II! – What do representation companies really offer?

In part I of this series I shared with you a few advices in the field of  acquisition of new partner hotels for global representation companies. In the previous article I gave a general view of what it was like some 20 years ago in the field of global representation for independent hotels, and highlighted the importance of making sure that the company´s reputation and image reflects yours .

In part II I am sharing with you some of the most important aspects I recommend you should evaluate in relation to the menu of benefits and services these companies offer with the aim of helping you grow your global business. 

What do they really offer?

When you are in negotiations with any representation company, you will be presented with an overwhelming menu of services. The key here is to elaborate or extract your own list including the services that truly benefit your hotel. Let me share with you some essential examples often overlooked by hoteliers when they are in the midst of negotiation:

 

1) Promotional Material:

In case the company still prints a hotel listing or directory, you should start asking how many copies are printed. But most importantly you need to know how these are used and distributed by the company´s sales force in your top feeder markets. In other words, they might try to impress you by saying that they print thousands of copies, but it would not benefit you if the company´s global sales offices do not make proper use of the member hotels directory. Keep in mind that the main purpose of such pieces is to give your hotel exposure and to secure new business for your property.

I would recommend that you look at any collateral with a critical eye and evaluate if it is of high quality and being produced by talented and creative professionals; or if they are simply producing collateral that looks OK but that is useless to the client and to the sales force.

In line with this, you should check what other tools are provided to the company´s sales force in charge of generating new business for your hotel. Remember that these expenses on printed material and sales actions are covered from the fees you pay, so you should know how your money is being used.

You would be shocked by the amount of collateral some of these companies trash at the end of the year as a result of not using this collateral in an efficient manner. Likewise, if at any point the company stops printing the hotel directory or changes the format drastically, you should know how that money, used previously to print the catalogue, is now going to be invested.

 

2) Customer Service:

Another personal experience I want to share with you is that when I was working in membership development, I was amongst the initiators for the creation of a Membership Services department. The idea then was to assist the company´s partner hotels in a more efficient and professional manner.

As the hotel business was becoming more complex, it was clear that the member hotels needed better guidance and expected the level of consultancy that would enhance their competitiveness and growth of their business volumes. With this in mind, we were initially able to put together a great team of professionals dedicated to serving as a link between the partner hotel and the company´s sales force. When speaking to a member hotel, I usually referred to the customer service agents as the hotel´s “guardian angels”.

In essence, the customer service team was working  for the hotel and, at the same time, for the company´s sales team analyzing the hotel´s needs and potential, and dealing with the sales force to design action plans to increase the hotel´s business. The team´s goal was to always think proactively and innovatively to prevent the hotelier from asking the disappointing question: “where is my business”?

So, what should be ideally the profile of a membership services person? It is a fact that this person must possess a solid understanding of revenue management balanced with a sizeable knowledge of sales. What happens in some companies is that this CS person focuses mainly on revenue and analytics but is not capable of translating their business analysis into sales actions. As a result, whatever strategy they discuss with you would be useless for the company´s global sales force.

Some companies operate from the perspective that “Sales is King” and customer service is a complement of sales. Other companies make the mistake of empowering the customer service team to the extent that sales feels neglected. We can debate which format is better and which is more damaging to the member hotel, but we can surely agree that, as in most cases, an intelligent balance is needed to be able to secure the partner hotel´s success.

 

3) Preferred partnerships:

This is a topic most representation companies brag about. Preferred partnerships apply usually to airlines, car rental companies, credit card companies and TMCs, amongst others. You can usually participate in these programs by offering a discount or a unique benefit. Others, like TMCs or consortia, require a significant investment from you in addition to a rate reduction and unique benefits for their clients. The higher the investment, the more you must investigate about the potential to generate business for your property through these partnerships.

Your check list should answer questions such as: does the TMC manage the type of accounts that have business for my hotel?; how effective is the representation company´s sales force in moving business from my comp-set to my hotel? what kind of sales activities will the representation company´s sales team implement to secure the optimal exposure and positioning for my hotel? is the representation company simply making a profit from the participation fee or are they capable of securing a ROI? You should always and at all times keep track of business volume behavior and sales performance.

A sensitive topic is usually airlines partnerships. Make sure it is clear how often you can reach the airline´s frequent flyers to promote your hotel individually, the costs involved, the kind of generic campaigns the representation company coordinates with the partner airlines and  how effective are these campaigns to generate new business for your hotel.

 

4) Sales Force:

A global sales team is perhaps the highest value any representation company can offer you and I have left it for last so that it stays fresh in your mind.

These are the road warriors in charge of qualifying prospects, managing business relationships on your behalf and securing new and high yield business for your hotel. On the norm, a hotel joins these representation companies to grow their international/long-haul business and not only their domestic business.

So it is critical that you develop a close, intense and productive relationship with these people. My recommendation here is that you also observe very closely if these professionals are happy, motivated and creative. How extensive is their client´s network and how well connected are they in their respective markets? Are they receiving inspirational leadership from the company´s management? and how effective are they in moving business from your competition to your hotel? Do they believe in the company´s future? It is no science that a happy employee is more productive.

Lastly, you have to make sure that, based on your hotel´s type; they are capable of generating business from all segments, namely leisure, corporate and mice. Make sure the company has a solid strategy, both short and long term, to develop each one of these segments. Keep an eye on the kind of business produced by the representation company and always ask yourself: are they generating new business or are they simply channeling business I already had?

The concepts and ideas shared in this article should give you a good base of some of the most important areas and items you must pay attention to when evaluating a partnership with any representation company, be it full representation or plain connectivity.

We know that there are many other aspects that require close attention including distribution & technology, membership fees and obligations and penalties included in the membership contract. However, the purpose of this article is to share my experiences and provide you with general advice to help you choose the right partner to represent your hotel.

 

In a nutshell:

  • You surely noticed that I used several times the term “new” business. That should be the main shared goal: To increase your new business volumes and open new markets for you.
  • Try to assess the internal “health” of the company. Is the company´s staff experienced? Are they well connected in their territory of responsibility? Are they motivated and energized? Is there a good flow of what I call “inspirational leadership”?
  • Try to grasp if the most important departments -sales * distribution * customer services- work united or if they operate as individual silos with poor communication thus affecting the quality of the service they offer you.
  • Check if the transaction fee on existing business (i.e. business you already have) and that they will now channel when you become a member, can be negotiated and reduced.
  • Keep an eye on the evolution of the company´s website where your hotel will be bookable. Does it reflect adequate investment and talent or is it just a generic “nice to have” tool? Is it user friendly and fun? Does it offer valuable content without mistakes?
  • Check if the quality of the hotels the company represents is consistent. Or do you get the feeling they accept hotels of poor quality just to make money?
  • Monitor that there is a balance, at the end of every year, between the new hotels that join the company and the number of hotels terminating their membership. A good sign is when there are more hotels joining than leaving.
  • In addition to checking the overall quality of hotels the company represents, place special attention to the hotels they represent in your top feeder markets. Fact is that travel trade professionals, as well as end consumers considering your hotel, will assess your property based on the caliber of hotel represented by the company in their own city.
  • Monitor the turnover of people in senior management positions and sales. A high turnover of staff is usually not a good sign.

 

Contact us at anytime if you wish to profit from our consulting services on sales and distribution. We will be happy to analyze with you the terms and conditions of any partnership you are presently evaluating with any representation company.

Our consulting services apply for both new and existing agreements. For existing partnerships we can focus our study to cover the cost-effectiveness and value of the tools your representation company is offering you related to global sales, marketing and distribution.

 

World Hospitality Alliance

offers a comprehensive “a la carte” catalogue of customized sales, marketing and technology services designed by hospitality experts to build-up global business and market-share.

WHEE – Creative Hospitality

is a representation & consulting company for the hospitality industry dedicated to helping travel-related companies in their growth and successful positioning in South America. WHEE is a founding member of the World Hospitality Alliance. You can find us at wheehospitality.com and in Instagram @wheecreativehospitality

 

The Author

Oscar Gómez is an Expert Multicultural Sales & Marketing Consultant in Global Hospitality who has held various positions in hotel development, global sales, marketing and customer service. In addition to the experience in the sales field, he has also served as lecturer in several private universities in his native Dominican Republic.

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