As a conference speaker and trainer, I am finding that one of my most requested topics lately is hotel sales negotiating techniques.
Based on the initial inquiries received, I get the impression that many hotel leaders still view negotiating as being a separate part of the selling process such as it was originally taught in 1990’s era training.
These days, successful negotiating starts from how one handles leads at their “intake point,” which is important in order to maximise effectiveness further along in the sales engagement. First, let’s look at where in the sales process negotiating is taking place in the era of electronic sales correspondence.
For most properties, the majority of leads come in electronically via direct email, online RFP forms, meeting planning platforms such as CVENT or CVB websites, or the leads are forwarded electronically from brand sources.
Once received, salespeople check availability of rooms and meeting space and then consult with a revenue manager or a rate guidance system.
Thereafter, too many salespeople simply drop proposed rates into a proposal template, which is either an overly-detailed electronic brochure in PDF format or one of the many online proposal tools which also tend to have too many details.
Savvy planners, many of whom have previously been employed in hotel sales, skip over reading all the excessive “fluff” since it is not personalised and to them feels spammy.
Instead the buyer’s eyes go straight to the room rates and related fees. If they are self-sold on the hotel, it’s at this point that the first real seller-buyer contact occurs, typically via a blunt email or IM conveying rate resistance.
Alternatively, the first step in a successful negotiating strategy circa 2020 is to respond to every inquiry by reaching out to the planner. One cannot negotiate effectively if you have not forged a relationship.
Unless specifically asked not to do so, pick up the phone and at least leave a personalised voicemail.
If you reach the planner, do not expect them to be all thrilled and happy that their workday has been interrupted. If you really want to annoy today’s buyer, start off by doing what old-school 1990’s era sales training endorses, which is to engage in so-called “rapport building” and then immediately “ask open-ended questions.”
Example: “Hello Jane, how are you today? How is the weather there in Anytown? Tell me, what does your perfect meeting look like? What has worked well and not so well in the past?”
Meeting planners are busy and many are indeed biased to preferring electronic correspondence, so you have to immediately give them a good reason to give up some talk time before you investigate.
Instead, politely introduce yourself and your company let them know up front that you truly read their RFP by asking some intelligent questions.
Example:“Good afternoon Ashley. I’m Doug Kennedy with Brand X Hotel and we are delighted to have received your RFP. I just have a few brief questions so that I can provide a more detailed proposal. Pause for them to agree to talk, then ask “I noticed on page three of your RFP that you mentioned (X), so I wanted to see if (Y) would work for you?”
Asking them questions specific to their RFP shows you are engaged. “I noticed that on day two you are looking for unique break-out experiences; can you tell me more about the planned activities? Because I have some alternative meeting spaces that might work out perfect.”
If you do not get the planner on the phone, which is the most likely outcome, leave a short, personalised voicemail saying pretty much the same. If they don’t call back, follow up with an email (or IM reply in the platform) making it easy for them to respond with a time for a call such as: “It would be wonderful to connect briefly by phone. I am open from 2pm – 4pm today and again tomorrow from 9am – 11am. Let me know what works and I will confirm it back.”
Some planners specifically say in their RFP not to call, so instead send intelligent questions back in a personalised mail indicating you noticed their request but encouraging them to call you. (Or even better, send a short video email as I show participants how to do in my sales training workshops.)
There are many benefits of making a personal connection at the start and having a chance to “feel them out” on date flexibility and price sensitivity before you send the initial quote. Personal connections also allow an opportunity to sell value and point out any unique benefits.
However, the most important advantage is that you have made a personal connection, which greatly helps later when it is time for negotiating.
After connecting, or if you don’t receive any response to your voicemail and email, proceed with sending the proposal.
Make sure that the collateral is personalised and customised and not just a standard 10-15 page PDF or electronic brochure over-stuffed with irrelevant stock images and feature lists.
Here are additional training tips for negotiating in today’s hotel sales environment.
- Have confidence in the rates, terms and fees you are quoting and trust that your revenue manager is armed with historical data and accurate business intelligence.
- Use “rate framing” techniques, which is to mention top-tier “prevailing” (traditionally called “rack”) rates to position lower rates as being a good.
- Similarly, rate-frame your hotel’s benefits. For example, “Unlike other hotels in our area, we do not charge a hotel fee…” or “Our hotel fee provides a good value for your participants at $X, which includes ultra high-speed WiFi that others charge a premium for…”
- Do not make concessions on rates oe fees up front, nor directly imply that you will do so later. Instead, simply express interest in securing their business and make a vague reference to flexibility: “As our hotel seems like an ideal fit for your meeting/event, I would really love to work with you to ensure its success, so let me know what else we can do on our end to win this opportunity”
- When prospects do come back and request concessions, position yourself as being on their side. “I really hope we can work this out and I will take this to our revenue leader and see what I can get her to do for you.”
- Then try to increase commitment before conceding such as by saying “If I am able to secure the lower rate (or waive the fee), do you think we can proceed with a contract?”