Guests who stay at a property multiple times might question why rates vary from one stay to the next, so hoteliers should train staff members to explain why.
While much has changed since I started at the front desk and worked in hotel sales, there’s one question that today’s guests and meeting planners both still ask: “Why are the rates so much higher this time?”
The exact wording might vary according to context, but the challenge is the same: explaining why the price for the same room with the same view and the same services varies greatly from one stay (or one night in the middle of a stay) to another.
Long before the term “yield management” became mainstream, rates changed according to the day of week, season of year and the calendar of local activities and events.
For example, at my first hotel, the Marriott Griffin Gate Resort, rates were generally higher on the weekends, during the summer, during holidays and certainly whenever there was a Kentucky Wildcats basketball game or a thoroughbred horse event. My next hotel was a suburban center property and therefore it was the opposite; rates were much lower on weekends, summers and bank holidays.
As yield management evolved into revenue optimization, driven by automation, a new pricing tactic evolved that I call “mid-stay rate variance.” Now rates might even change several times during a guest’s stay. In this case, some hotels quote a total “stay” price, but many guests still seek to know the rate for each night, especially if they anticipate departing a day or two early. Even corporate/business traveler rates are more likely to vary now, as hotels have implemented “dynamic pricing” strategies.
While it has always been challenging to explain rate changes, it’s even more challenging now that revenue managers have more “levers” to pull.
In the meantime, if they have been trained at all, hotel staff are told to use the same explanation my managers told me to say way back when. Here’s how that conversation usually goes:
Guest: “Last time I stayed here the rate was only $X and now it’s $Y. Why is that?”
Agent: “That’s because it’s busy right now, and our rates go up when there’s high occupancy.”
When you think about it, offering this type of explanation is essentially defending the fundamental law of capitalism: supply and demand. We might as well be saying: “Actually, sir, the rate goes up due to what our revenue manager calls compressed demand. When that happens, she really pushes rates hard, so that we can maximize RevPAR, which is revenue per available room. This helps our company generate the most ROI, which is return on investment, so our owners can the maximize profits from guests just like you.”
In reality, this is in fact all true, but let’s explore another way of explaining all this which is equally as true and which sounds so much better.
Guest: “Last time I stayed here the rate was only $X and how it’s $Y. Why is that?”
Agent: “During your last visit it was a slower period due to (time of year/day of week), so we were probably able to offer discounts. However, for these dates our (“regular,” or “prevailing”) rates apply.”
When this question comes up ahead of time during sales or reservations inquiries, smart salespeople are very happy to help the buyer find discounted rates if their plans are flexible by simply adding a question: “…Are your plans flexible?”
Smart revenue managers love this sales tactic. Any hotel can sell out when demand is strong; the best hotel leaders do all they can to lure guests to alternative dates with lower rates or special rate options.
The reality is that re-programming your sales, front desk and reservations teams to use these alternative explanations does take effort. I know our KTN mystery shoppers often must do reinforcement coaching with our workshop attendees to create new habits, even after they have practiced this in a class.
Here are some training tips for hotel leaders to use:
- Present this concept in the context of real-world conversations specific to your team, according to whether they are working with in-house guests at registration or ahead of time when responding to emails and phone inquiries.
- Have participants role play how to use the concept several times in response to a variety of ways in which the question might be worded.
- Make sure first-level supervisors are monitoring this when overhearing conversations, and that sales leaders spot-check sales correspondence being sent digitally by email or online messaging.
Here are some examples of questions to use when role playing responses at your next meeting:
- Meeting planner: “I had booked another group last year for these same dates for only $X, so help me understand why the rates are so much higher this time?”
- Guest at the front desk: “If I’m staying in the very same room, why does the rate go up for the last two nights?”
- Guest on the phone: “Hi, when we stayed there last time you only charged us $X, but now when I look online I see rates have gone all the way up to $Y.”
Doug Kennedy is president of the Kennedy Training Network, Inc. a leading provider of hotel sales, guest service, reservations and front desk training programs and telephone mystery shopping services for the lodging and hospitality industry. Kennedy has been a fixture on the industry’s conference circuit for hotel companies, brands and associations for more than two decades. Since 1996, Kennedy’s monthly training articles have been published worldwide, making him one of the most widely read hospitality industry authorities. Visit KTN at www.kennedytrainingnetwork.com or email him directly at firstname.lastname@example.org. He is the author of “So You REALLY Like Working With People? - Five Principles for Hospitality Excellence.”
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