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Neil L. Salerno, CHME, CHA

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Featured Article

"What the Heck is Hotel Revenue Management, Anyway?"

 

Hotel Budgets and Marketing Plans; 

Oh No, Is It That Time Again?

By: Neil Salerno

Iíll go out on a limb and say that few, if any, managers look forward to the budgeting process. Amidst the tension and hand wringing, most general managers have been through the drill many times before, but feeling some stress is common. Todayís general managers are smarter and more resourceful than ever before, but they will face many challenges in coming months. Will your hotel be among those to lead the market in 2004?

The common question is which comes first, the financial budget or the marketing plan. It makes sense to draft the budget first, since the marketing plan should show how those numbers would be reached. In addition, you will at least know how many dollars you have to invest. No matter which you tackle first, 2004 will present opportunities to climb out of the pack and capture a greater share of business in your competition set. . 

The biggest myth is that an exceptionally well-done marketing plan will make the hotel perform at higher levels. Somehow, there is comfort in having the ability to thumb through a beautifully composed document but, caution, it isnít the plan; itís the people working the plan that improve business. 

The best-written, best-formatted, and most comprehensive marketing plan will do or change nothing, if you donít challenge and coach your sales and reservations teams to perform at a higher level. Some hoteliers are concerned about the details in their marketing plan; yet devote few resources to the sales and reservations teams to initiate change and creativity in their daily activities.

If you have done little to improve the level of sales performance in your reservations and/or sales teams in recent months, you would do well to consider doing it now during the market planning process. 

If your mission is to develop an impressive plan for your hotelís financial responsibilities, great; just donít believe that this plan alone will define your results for 2004. It will take creativity and out-of-the-box thinking to get a greater share of business in this tight market.  

There appears to be some optimism that travel is on the increase in most parts of the Country and maybe, with luck, we are on our way out of the woods. The degree of recovery for your hotel will be based upon the efforts of you and your team. You all know the drill. Base business is the key. Group booking backlog and historic booking pace will determine a large portion of anticipated results for next year. Improving these elements is your challenge for 2004. Windfalls happen, but itís difficult to be too optimistic after our experience during the last two or three years. 

Overall, 2000 was a very good year for most hotels, but weíve been through a lot since then. From a potential profit standpoint, most hotels are well positioned to have an excellent year in 2004. Since 2001, hotel managers have concentrated on reducing expenses and payroll to compensate for falling revenues; and they are making better spending choices. Higher revenues could result in historic profits if these new spending habits are sustained.
  
Winning managers make winning choices. There are investments, which can give you the edge you need to challenge your competition. Youíve heard it before, but training and coaching, on a regular basis, can be an excellent resource for new ideas and new ways to perform old ones. There are many excellent training programs from which to choose. Select a program that provides for continued support after training. People learn best by doing, not just listening. 

Any investment in your Internet positioning will drive you ahead of the competition in this ever-growing marketplace. Having a Web Site brings you part way there; but marketing your site through search engine placement and better functional design will set your hotel apart from the competition. Itís easy to get complacent about the Internet. Itís confusing, rapidly changing, and there are many varying paradigms on how to maximize sales conversions. As with training, there are many resources available; several with good hands-on hotel marketing experience. Choose wisely and open your mind to new ideas.

Consider out-sourcing to help your program for 2004 without adding to your payroll expense and to avoid long-term commitments in a fluctuating marketplace. The largest drain on sales resources is to pile-on non-sales or administrative functions to members of your sales team due to job compression. Itís best to avoid the pitfall of choosing the first person available; part-time or outsourced people best perform some of these necessary tasks. 

Last, but certainly not least, make an investment in the time to stay current with changes and happenings in our industry. Thanks to the Internet, there is an abundant amount of current information available. Best decisions are informed decisions. Many general managers tell me that the last fifteen or twenty minutes of their day is devoted to reading newsletters, like Hotel-Online.com and others. This has become a good habit in their daily work life. This investment in time always produces a good ROI.

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