A hotel sales manager reviews potential business with her Director of Sales. The supervisor offers suggestions and sends her off to begin negotiating the deal. It doesn’t end well.
Negotiating is a fundamental skill, used in all aspects of life. Unfortunately, most sales managers have no knowledge of what negotiating is all about. Upper management assumes that the sales team knows how to negotiate the best deal for the hotel. But is this actually the case? Test calls have found that the vast majority of hotel sales representatives do not even attempt to negotiate. In fact, test calls show that the customers were actually stronger and more competent at negotiating than hotel sales managers! In the end, managers are leaving huge hotel revenue opportunities on the table.
Consider the following example where a customer has up to $180.00 per room to pay for guest rooms and $500.00 per day for room rental.
Customer: I’ll need 50 rooms arriving on May 8th and departing On May 10th. We will need a meeting room for 50 people and lunch and morning and afternoon breaks each day. Can you give me a price on that?
Sales Manager: Sure, we can offer you a $129.00 rate and room rental will be waived since you are having lunch and breaks each day.
In the above scenario the sales manager left over $5000.00 on the table. Basic negotiating skills could have easily captured the additional revenue and still left the customer feeling good about the price they paid. Let’s take another example. In this case, the customer and the sales manager have already verbally agreed upon a group rate of $189.00 per room and an $800.00 room rental per day. The customer is just about to sign on the dotted line.
Sales Manager: Bob, thanks for selecting our hotel, if you’ll just sign off on the paperwork, we’re all set to go.
Customer: Great, but before I sign, I was hoping you could also give our group transportation to the Downtown Theater. It looks like it’s just 20 minutes from here. Is that okay?
Sales Manager: Umm, sure we could work that out.
Customer: And one more thing, can we get two free suites for three days?
Sales Manager: Okay, we can do that for you.
In the above scenario, the customer (obviously a better negotiator than the sales person!) was able to negotiate over $2500.00 in last minute concessions. But by using just a few negotiating tactics, the sales manager could have turned the deal around, saved the hotel over $2500.00, and still landed the agreement. It is amazing how few hotel sales managers take full advantage of negotiating opportunities. In short;
Learn to negotiate – now! It can land your hotel hundreds of thousands of extra dollars each year. Stay up to date with negotiation strategies by canvassing the latest trade magazines and web discussions, such as those at LinkedIn. It’s well worth the effort.