Representation Alert! Part I

uncovering-value-representation-companies-hotels

I still vividly remember the excitement I felt the day I received the first signed contract from the hotel I acquired when I was working as Director of Membership Development for a very prestigious company dedicated to offering global sales and distribution services. At the time, the company represented some of the most iconic independent hotels and prestigious hotel groups all around the world.

Back then, the various companies selling representation services to independent hotels, offered a comparable catalogue of services which encircled three main pillars: Sales, Marketing and Distribution.

Trust me if I tell you that everything was different back then: From the way business etiquettes were observed, to the way the real value and contribution of representation companies were appraised by the affiliated hotels.

At the time, for example, corporate travel had other dimensions and it was also common that some hotels joined a global representation company just for prestige and not necessarily for the business they could deliver.

Back then, GDS and call centers were king and no one spoke about channel mix, revenue management or social media. Can you imagine life without internet?!

Whilst nowadays we have gotten used to be constantly on the lookout for business disruptors, back then, even if you had the crystal ball, no one would have dreamed about meta search, OTAs or shared economies.

20+ years have passed since feeling the thrill of signing the first partner-hotel, and I have to admit that I am forever surprised by the endless and rapid changes that the travel industry continues to experience. One of the areas that has faced a huge evolution, is the subject of global representation for independent hotels.

In my opinion these representation companies can be grouped in two main categories: On the one hand you have those offering full service and, on the other hand, those that offer the “plug and play” format offering connectivity but very limited or no support on other critical areas such as global sales and market intelligence.

Certainly, we can all agree that the representation of independent hotels continues to be an attractive business model for many properties which do not want to offer the chains “cookie-cutter” standardized-experience to their guests and which also do not want to be flagged by one of the major hotel brands available.

It is true that the major chains provide benefits such as high brand recognition but, as mentioned already, there is a steady interest by global travelers for the individuality and uniqueness offered by the independent hotels. Evidence of that is that nowadays most hotel chains are offering non-franchised representation services to independent hotels, or are buying out independent hotel companies to be incorporated into their lodging options.

So, the question is: What are some of the most critical components to evaluate when negotiating a global partnership with any of the full service representation companies for independent hotels?

Based on my experience for 20+ years in hotels representation, let me share with you a few points you should carefully analyze when negotiating a membership agreement for your hotel with a global representation company:

How good of a name?

First is to keep in mind that you should be represented by a company that mirrors your good image at a global level. Therefore, make sure you check the company´s past and present reputation as well as the firm´s trail in terms of their evolution, improvements and financial stability. Is the company´s good image consistent throughout the years or are the company´s “Glory Days” a thing of the past? Has the company´s business model evolve with time and adapted to your needs?

To get a clear picture, don’t be afraid to ask these questions directly to the person who is trying to convince you to sign the membership contract. You should also ask around and talk to industry peers. Another great source of information is present and former affiliated hotels, not only in your own city but in other countries as well. The later will provide you a valuable perspective from the membership´s base point of view.

My advice would be that you talk to GMs, DOSs and Revenue Managers as they each can provide insights from different perspectives of the business.

Let´s pause here whilst I conclude Part II of this piece of writing.

Stay tune for the next article of this series where we will share with you our perspective to help you analyze what do representation companies really offer and discover the real value of their proposal.

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.

 

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.

 

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

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