SALES TECHNIQUES

VARIOUS SALES TOOLS

Many hospitality businesses are using new marketing tools to generate more revenue. These tools enable the
hotels to create convenient, personalized, compelling campaigns for each customer and lead. Below are
some tools to help the hotel keep their hospitality marketing up to date and effective. These new marketing
tools and techniques will help the hotels connect with more customers and increase revenue.

1. Push Reservations Through Email and Text Message

Making reservations online is easy and convenient. To attract more guests during a slow time of the season
and make more sales on a regular basis, send out an email newsletter or a text message promotion. Include a
discount or coupon code and a “Reserve Now” button. This message gives the recipient an incentive to book
their room right away, and provides them with an easy way to do it.

2. Cut Costs with an All-in-One Marketing Solution

Email is not enough for a complete hospitality marketing strategy anymore. It is important to have a strong
brand presence on multiple channels. But marketing over many different channels is expensive. To lower
your costs while still maintaining a comprehensive marketing reach, you need to use an all-in-one marketing
solution. These include a variety of marketing channels but you only pay for one solution so you save
money.

3. Offer Automated Reservation Reminders

Text message marketing is a popular trend, and it is highly convenient for customers. Enable customers to
sign up for text message reminders as their reservation date approaches. These could be text message or
email reminders, but text message is often preferred as it is quick and convenient.

Make these reminders exciting and informative. You only have 160 characters to work with in a text
message. “Your reservation is only two weeks away, on April 15! Lay out any important items like passport
and medications so you will remember to pack them in.”

4. Use Big Data to Your Advantage

When you use an automated marketing solution, it collects data from everything that happens. You will
learn how many people opened your messages, who viewed which webpages, which customers take
vacation at what times of the year and much more. All this information is all automatically compiled. Use
this data to reach out to customers with personalized campaigns. Send customers automatically personalized
messages to boost their interest rate and make them more likely to open messages, make reservations and
spend more money.

ROLE OF FRONT OFFICE PERSONNEL IN MAXIMISING OCCUPANCY

Front office plays a very important role in maximizing the occupancy of a hotel. The two main roles of front
office in revenue generation are as follows:

 Encouraging guests to use the full range of the hotel services (e.g. business centres, coffee shops,
bars and so on)
 Suggestive an upgrade in accommodation
 Salesmanship of reception staff

Good salesmanship is needed by reception staff when selling hotel facilities. The following are some
guidelines for good salesmanship techniques:

1. Product knowledge: receptionist clerks must be able to describe and suggest the services and
facilities of the hotel. You therefore need to have a thorough knowledge of your hotel and its
products, including room types, rates, and all of the facilities or services available.

2. Willingness to sell: be willing to give guests your full attention and to offer assistance and
knowledgeable advice whenever it is needed.

3. Communication skills: be able to communicate well. You must be able to listen, observe, and
establish the needs of a guest. Additionally, you must be able to ask appropriate questions and
discuss with guests the type of services that best suit their needs.

4. Selling techniques: possess good selling techniques so that guests are persuaded to purchase the
hotel products without feeling that they are being pressurized.

OVERBOOKING

Overbooking means deliberately accepting more bookings than you have room for. Sometimes it can be
necessary for a hotel to sell more rooms than it actually has available. To those unfamiliar with the internal
workings of the Hospitality Industry, which is always influenced by and somewhat vulnerable to the
vicissitudes of the global economic climate, that may sounds strange. But experienced hoteliers will tell you
that selling rooms/spaces that you don't have – Overbooking – can sometimes be the only way to protect a
hotel from diminished revenue due to unexpected cancellations, no-shows or booking errors.

A hotel needs to reach 100% occupancy for obtaining the maximum amount of revenue.

To achieve this, you need to take into consideration in your forecast the following fluctuations:

 cancellations (last-minute / same day)

 stay extension
 early departures
 no-shows

Hotels will calculate based on historical trends how much they can overbook the hotel to reach a
perfect sell out.

For instance a 100 room hotel, might need to sell 103 room, to be 100% occupied in the end.

Unfortunately, working with statistics, means that you are using trends and averages. The result can vary,
meaning that at times you will fall short of the 100% occupancy, and sometimes you will have more guests
than rooms.

For all these reasons, including an Overbooking policy in a hotel's overall pricing and reservations strategy
requires consideration and caution. Careless implementation could cause irreparable harm, but a well-
managed Overbooking procedure could mean that a hotel's profits are maximised year after year.
 What should the Guest Service Manager do in case of overbooking?

 Explain the circumstance and reason for the situation (i.e. guest staying over).
 Apologise to the guest and explain what will be done.
 The hotel must arrange and pay for another hotel in the nearby areas with similar facilities and guest service
standard. It is good to have overbooking agreements ijn advance between hotels. This can allow you to
minimize revenue loss due to a difference in pricing between the rate paid to your hotel and the current rate
where the guest is acutally sent to.
 The hotel also must reimburse the guest for any reasonable expenses incurred by reason of the change,
including transportation and the cost of telephone calls to notify family.

REPEAT GUESTS

Another very important way in which front office staff can help to increase occupancies is to try to boost
repeat business. Obviously, the guest must have been satisfied with the hotel during his current stay,
otherwise you stand little chance of his coming back.

1. A fond farewell - If all has gone well, the moment of departure is a good time to try some forward
selling. Many hotels ignore this opportunity, but there are good reasons for trying to capitalize on it.

2. Face to Face selling - One of the main problems hotels face in terms of marketing is that they are
seldom able to engage in face-to-face selling, since bookings are usually arranged in advance, over
the telephone and often through agents of one type or another.

3. Treat the customer as future customer - Never forget that A GUEST IN THE HOTEL IS A
POTENTIAL FUTURE CUSTOMER. Somebody who has come to your area once may very well do
so twice, and if your hotel suited him then, it ought to do so again.

RETURN RESERVATIONS

1. Offer a welcome back note to the guest - There is another and more subtle point. A hotel is a kind of
home, and departure is often a somewhat comfortless time: the guest has to set off into the cold,
unfriendly world once more, and it is at this moment that he is likely to be particularly receptive to
the suggestion that you would like to see him back sometime. You can ask ‘I hope you enjoyed your
stay?’, and if you get an affirmative answer, go on to ‘Are you going to be coming back this way
again? Can we make a provisional booking?’ Even if only a few guests are able to give you a definite
answer there and then, you’ve still planted the idea in the others’ minds, and it may well develop into
a firm booking eventually.

2. Follow up - The same point applies to the use of ‘follow- up’ techniques. Commercial firms often
pay considerable sums of money for address lists which might include a high proportion of potential
customers. Your registration cards are just that. These are people who have already had reason to
come to your area, have chosen your hotel, and have (presumably) been happy with their choice. We
shall return to this point when we look at marketing.
OFFERING ALTERNATIVES

Guests are not always aware of the range of services available in a hotel. Reception staff can promote the
sales of the services by suggesting the most appropriate service to the guest, or offering alternatives guest to
choose from.

Two strategies that can be used when offering alternatives of accommodation to customers are the top-down
and bottom-up approaches.

1. The top- down technique requires the receptionist to start from the most expensive option, and then
offer progressively cheaper ones if the guest does not intend to take the more expensive offer. This
method is most appropriate with guests whose prime concern is comfort and service, rather than cost.
The most expensive and costly option is described first, as this is likely to appeal most to this type of
guest.

2. The bottom-up technique, on the other hand, requires the receptionist to start with the cheapest
option, and then persuade the guest to take progressively more expensive packages. This method is
most appropriate with the guests whose prime consideration is the cost of the services. If the most
expensive option is offered first, the guest would be put off right away. By starting with the cheapest
option and then suggesting that for a small amount more the guest could have much better
accommodation, the receptionist may be able to persuade the guest to accept services of the medium
or higher price ranges.

When choosing a selling strategy, reception staff to anticipate what will motivate the guest to use a service.
For example, will the guest be attracted by offering a special promotional price, or will the guest be more
interested in the exclusivity of expensive service?
In general, it can be said that:

 Well-dressed , affluent guests are less likely to be on a tight budget and may be more concerned with
the quality of service than costs.
 Guests whose full accounts are settled by their companies tend to spend more than guests paying for
themselves.
 Guests who want to impress business clients or colleagues tend to spend more on high-quality
services.
 Guests who desire comfort are more likely to treat themselves to expensive services.

Reception staff, therefore. Have to observe and listen to guests carefully. They may have to know more
about a guest, such as the purpose of the guest’s visit or the account details, in order to establish a guest’s
needs and to be able to recommend the most appropriate service.

SUGGESTIVE SELLING

This is an important sales technique for front office staff. It involves a member of staff describing the
services and offering to book them for a guest. The technique can be illustrated more clearly by the
examples below. It is important to remember that when employing suggestive selling, care must be taken to
avoid applying too much pressure on guests.

Situation 1

A couple travelling with their baby.

Action. The receptionist may recommend the full range of the hotel services by offering to hire a baby-sitter
for a family on that evening, reserving a table in the hotel’s a la carte restaurant, or describing the laundry
facilities and baby meals available from room service.
Situation 2

An exhausted business woman.

Action. The receptionist may suggest that the guest upgrade to a room with a whirlpool bath. The guest may
find the bath a well-deserved relaxation after a hard day’s work, although it costs a little more. In addition,
the receptionist may also inform the guest that meals and cocktails can be provided in the guest-room, and
explain how the guest can ask for room service.

Situation 3

An FIT businessman with a reservation for a standard room on rack rate terms.

Action. The receptionist may explain the benefits of the special business package ( which may, for instance,
include breakfast charge, use of the business centre facilities, and use of hotel transportation ) and suggest
that the guest change to the new tariff.

ACTIVITY

Imagine that you are a receptionist in a hotel.

a) Explain why good salesmanship is important when carrying out your duties.

b) What selling techniques would you employ when offering accommodation for the following walk-in
guests ? Explain why.
- a mature man on an all-expenses-paid business trip
- a middle-aged couple who are on holiday
- a young man with a rucksack

c) What kind of services would you suggest to the following guests in order to increase sales?
- an independent traveller coming to your city on business purposes
- a group of teenage pleasure travellers
- a newly-wed couple on their honeymoon.

ROLE PLAY SITUATIONS

a) An FIT businessman with a guaranteed reservation walks up to the front desk and asks to check in.
What procedure would you follow?
b) Mr. Chin Man Wong arrives at the desk asking to check in. You are unable to find his reservation
details. What would you do, assuming you have rooms?
c) A guest arrives late in the evening with a confirmed booking and asks to check in. You discover that
the hotel is full and no rooms are available. What would you do if you were the receptionist on duty?
d) Mr. Jones( Room 101) comes down to the front desk asking to change rooms. He complains that his
present room is noisy. What procedure would you follow?
e) Mrs. Smith wishes to stay one extra night. What procedure would you follow?
f) Mr. Walker, staying in Room 107, asks for his account to be settled by his company. IBN Ltd. What
procedure would you follow?

INTERNAL / IN-HOUSE SALES PROMOTION

When developing a program to increase front office sales activity, the front office manager, in conjunction
with other department directors and employees, should identify as specifically as possible the hotel products
and services to be promoted. A typical outline of promotional areas are as follows:
 I. Front office
A. Reservations
1. Upselling when reservation is placed 2. Additional reservations during registration and
checkout

B. Rooms
1. Upgrading reservation during registration 4. Movie library rental
2. Promotional packages 5. Computer games for children
3. Office rentals

C. Office services
1. Photocopies 4. Fax transmission
2. Dictation 5. Laptop computer rental
3. Typing 6. In-room videocassette recorder rental

D. Personal services
1. Babysitting 4. Concierge
2. Shopping a. Theater/music/art tickets
3. Bell staff assistance with luggage and b. General tourist information
equipment c. Tours of the area
d. Airline reservations
e. Emergency services
f. Information on local transportation

II. Food and beverage department

A. Restaurants
1. Special menu items of the day 4. Reservations
2. Signature menu items 5. Gift certificates
3. Special pricing combinations for diners

B. Room service
1. Meals 4. Snacks
2. Early-bird breakfast service 5. Beverages/alcohol
3. Party service

C. Banquet service

D. Lounge
1. Specials of the day 3. Featured entertainer
2. Special theme of the day 4. Promotional package

III. Gift shop

A. Emergency items
1. Clothing 2. Toiletries

B. Souvenirs

C. Promotional sales in progress

 IV. Health facilities
A. Swimming pool
1. Availability to guests 2. Memberships/gift certificates

B. Jogging paths and times of organized daily group runs

C. Health club
1. Availability to guests 2. Memberships/gift certificates

DIRECT SALES –

The difference between direct sales and the kind of selling you do in front office is that instead of waiting
for the customers to come to you, here YOU go to them.

 The first step, therefore, is to decide who are to be your sales targets. You have to analyse your
sources of business, both actual and potential, so that you can increase the former and penetrate the
latter. This comes under the heading of market research, which is dealt with fully in a number of
excellent marketing textbooks.

 The one point we would stress is that such research doesn’t stop with the construction of the hotel or
the preparation of the annual marketing plan. I t should be a day-to-day activity. Does the local paper
contain a report of a forthcoming event? It doesn’t matter what this is: it can be a one-off centenary,
an annual festival or a dog show: the question should be, is there any business in this? And just who
would be able to deliver it? The organizers, perhaps, the local travel agents, or t h e local Tourist
Information Centre?

 Again, weather forecasts are worth watching. If fog is expected, the airline schedules might well be
disrupted, and they and the tour operators may be in the market for beds. National or international
transport strikes can have the same effect.

 The targets for direct sales include travel agents, tour operators, exhibitors, short course organizers,
conference organizers and local businesses, who often make a whole series of bookings for their
visitors throughout the year.

How do hotels go about selling to these individuals?

 First, they find out who is the decisionmaker. Sometimes these are professionals who are easily
identified, but quite often businesses delegate the organization to somebody relatively junior.

 Organizing committees present yet another kind of problem, since it is very often difficult to know
precisely who carries the main ‘clout’.

 A great deal of effort goes into lobbying the representatives of the major national and international
associations. This is a job for professionals and is outside the scope of this book, but the essential
principles remain the same: discover who really makes the decision and concentrate your efforts
there.

 Next, they choose the most appropriate method of approach. There are a number of these, and, like
many other things, they are best used in combination. Let us look at them.
1. DIRECT MAIL,

 ‘Direct mail’ is the term used for the kind of circular letter outlining some opportunity or other which
we often find in our morning post. It is superior to advertising in that it can be addressed to a specific
group of people and can outline a particular selling point in considerable detail. Take as an example a
hotel introducing a complicated new weekend break tariff. I t would be wasteful to advertise this
nationally because the message would reach a lot of people who wouldn’t be interested no matter
how persuasive it was. By contrast, a direct mail shot could be aimed precisely at the travel agents,
who would then have details of the new offer in front of them.

 The problem with direct mail is that people often throw the contents away unread. This is partly
because circulars are often perceived as being impersonal. You can get round this to some extent by
using the mail merge facilities on your computer to produce personalized letters, but this still doesn’t
solve the other basic problem, which is that your letter may be seen as irrelevant. This is because
there is no guarantee that it will arrive just at the time the recipient is about to make a decision.
People don’t throw away direct mail related to their immediate problem. Timing is thus crucial.

 This brings us back to market research. One of the key things you need to know is when these key
decisions are made. Conferences are often arranged months or even years in advance, for instance, so
there’s no point in sending out direct mail soliciting bookings for next week. Moreover, experience
suggests that there’s not much point in sending out just one mail shot, either. Direct mail makes its
point by repetition, so if you are targeting a particular group of people you should send out three or
more ‘shots’, starting well in advance of their decision date, repeating your basic message but
emphasizing something slightly different each time.

2. PERSONAL CALLS

 The personal call is potentially the most effective means of all, because you are dealing with your
target on a face-to-face basis and can interpret and respond to every nuance of expression (remember
the importance of being able to ‘read’ body language?). Moreover, you can take all the information
you need, select and emphasize exactly those features the discussion calls for, then leave your
brochures or price lists for the client to consider at leisure.

 Everything we have said about telephone selling applies to personal calls. You have to identify who
you want to talk to and then get in to see him, so you will need the co-operation of his secretary just
as you did when you were telephoning. You should plan what you want to say and try to say it as
smoothly and persuasively as possible.

 There’s a problem here in that it isn’t as easy to refer to a checklist as you can with telephone sales,
though if the visit is a follow-up to a phone call during which the prospective client has raised certain
points, it is permissible to refer to your notes. After all, this shows that you are taking him seriously.
You should also try to structure the discussion so that it focuses on your client‘s specific problems
and interests. If you are trying to sell your hotel to someone organizing some kind of senior citizens’
get-together, the fact that you have child-minding facilities is likely to be irrelevant at best and
positively off-putting at worst. Finally, you should follow up with a letter, just as you did with the
phone call. Salespeople making personal calls should be fully equipped with all the information they
need.

 A glossy presentation folder with colour photographs of the accommodation, floor plans, sample
menus, wine lists and copies of letters from satisfied and prestigious clients is ideal.
  All this assumes that you are calling on the client. It is, of course, much better to persuade the client
to call on you if you can. This not only allows him to see what you have to offer, but also capitalizes
on one of the hotel’s biggest advantages, namely, that it offers hospitality. Of course, any reasonably
intelligent client knows this, so what is offered has to be of the very highest standard. The slightest
slip-up will lead the client to think ‘If that can happen when they’re really putting themselves out to
impress me, what would it be like when it’s just another function?’

3. SELLING LETTERS

 Unlike the circular, a letter is addressed specifically to one particular reader. It is a good deal more
flattering to the recipient because he usually has a pretty good idea of how much it actually costs to
draft and type.

 You can emphasize this by adding some kind of personal touch like ‘It was nice to meet you at the
conference last month...’. This has become even more important lately, since technical developments
are making the better quality ‘personalized’ circular letter increasingly difficult to distinguish from
the real thing. In the old days, letters tended to be fairly formal, with a lot of phrases like ‘We beg to
assure you’ and ‘I enclose herewith’.

 The modern trend has been towards simpler, more colloquial sentences, but one thing hasn’t
changed, and that is that the letter should look and feel impressive. Good quality paper, an
impressive heading, wide margins and clear type all convey one clear message to the recipient, and
that is quality. Spelling and grammar need attention, too.

 It is no use having an impressive letterhead and expensive paper if the letter itself says something
like ‘We got sum luvly rooms ...’ Letters should be simple, direct and, above all, orientated towards
the recipient. He’s not interested in your facilities: he’s interested in satisfying his requirements, and
the only reason he is reading your letter is that he thinks you might be able to help him. He knows,
too, that he is going to have to pay something for this service, so don’t try to hide the price. Wrap it
up by all means (remember ‘the sandwich’?), but let him know it fairly early on so that you have
space to cover all the nice things he is going to get for it.

 Finally, personalize your signature. You’re not just ‘A. Clerk, you should be ‘Angela’ or ‘Alan Clerk
or whatever your full name happens to be. No matter how friendly the tone, a letter is still a
relatively cold and formal means of communication. This suits some situations, but it isn’t ideal for
selling. Other things being equal, a customer will buy from the friendliest salesperson available. You
can demonstrate that friendliness by inviting your prospective client to use your first name. That
doesn’t mean that you should use his, of course. A touch of deference at the start doesn’t do any
harm.

Marketing Aspects
We have seen that front office can do more than is sometimes thought in terms of raising room revenue.
However, attracting new customers is properly the concern of the sales and marketing department.

Reaching the customer: advertising

Most commercial organizations fall into one of two classes:

1. Their market is local, and thus easily reached through media such as local newspapers, TV, cinema
advertisements and the like. Most restaurants fall into this category.
 2. Their market is dispersed, but linked together by a common enthusiasm so that it can be reached via
’special interest’ journals. There are any number of these magazines available, catering for interests
as diverse as boat-owning, computing, dog breeding and walking.

Hotels do not fall into either category. Although there are always some guests who live nearby (they may be
moving house, for instance, or reluctant to drive home after a celebration) and a certain number of bookings
result from local recommendations (neighbouring firms will often arrange accommodation for visitors with
nearby hotels), the greater part of a hotel’s business comes from people who live some distance away and
who have few ties with the locality (if they had, they might well be invited to stay in private houses).
Moreover, in most cases visitors come from a variety of regions and even countries. This makes localized
advertising difficult.

Nor is the hotel’s market a specialized one. Businesspeople are seldom confined to only one sector of
industry, and there are also travelling professionals, tourists and people visiting friends or relatives. These
guests have little in common except a need to stay in a particular locality for one or more nights. In other
words, the market is very heterogeneous, and this makes it difficult to reach via any of the ‘special interest’
channels we have mentioned.

Reaching the customer: relationship marketing

The difficulties hotels have in reaching new customers make it all the more important for them to retain the
loyalty of their existing ones. Hotels have always tried to do this, but the development of the ‘branding’
concept in industry as a whole, coupled with the creation of computerized marketing databases, has led to
modern groups tackling the issue in a much more systematic manner. This new approach is called
‘relationship marketing’.

Relationship marketing aims to build business by:

 Maintaining existing customer loyalty.
 Creating brand awareness among new customers.

It does this by advertising various concessions to frequent-stay customers. These can include:

 Privileged check-in facilities.

 Room upgrades.
 Late check-out privileges.
 Free or concessionary rates for partners.
 Free nights after a certain number of stays.

This approach may seem to be aimed primarily at the existing customer. However, relationship marketing
aims to attract customers from other hotel groups, too. It uses sophisticated market research techniques to
identify these, then highly personalized methods such as mail shots or telephone calls to approach them.
Obviously, this is only economic if the individuals concerned generate a lot of room revenue (i.e. they are
frequent travellers and normally stay in expensive accommodation).

Reaching the customer: intermediate agencies

The problems hotels experience in reaching new customers lead them to use third parties as intermediaries.
This costs money in the form of commissions, of course, but then so does advertising. Let us consider the
various means by which hotels and their customers can be brought together (Figure 43).

A point to consider in connection with Figure 43 is whether the intermediary is an ‘agent’ in law or a
principal. If a travel agent books accommodation with you on behalf of a customer, your contract is with the
customer, not with the agency, and since an agent cannot be liable for the actions of his principal, you
cannot claim damages from him if the customer does not turn up. On the other hand, a tour operator
normally books accommodation on their own account, in which case you can sue if he defaults.
TRAVEL AGENTS,

There are two main types:

1. Retail agents. These are the common and familiar high street agents who sell direct to the public.
Their main business is to arrange holidays for their customers, including hotel accommodation.

2. Company agents. Some city centre agencies specialize in business house travel, while organizations
such as major multinational companies are so big that it is worth their while to have their own travel
agency to handle all their business. Sometimes they buy one outright, sometimes they simply invite a
small agency to specialize in their business. Either way, the agency is likely to handle a lot of
valuable bookings. It receives the usual commission, though some of its profits are likely to be
passed on to its parent company or major client.

Travel agents make their money from commissions received on the sale of tickets and bookings. Since
tickets are fixed in price, the mechanism is simple. The agency carries a stock of blank tickets and simply
remits the money less the commission to the carrier after it sells one. Hotel accommodation is more
awkward because the final bill may include ‘extras’ like drinks and laundry. This has led to differences of
approach:

1. In some cases, the agency leaves the customer to pay the bill and then invoices the hotel for its
commission. This is advantageous for the hotel but less so for the agency, since payment can be
delayed. Moreover, the amounts are often relatively small and are sometimes exceeded by the
clearing charges.

2. In other cases, the travel agent gets the customer to pay a deposit, which it then forwards to the hotel
after deducting its commission. This is less satisfactory for the hotel since smaller agencies can have
cash flow problems and sometimes the customer arrives before the deposit does. Credit facilities
should only be extended to travel agents if they have been approved by the appropriate regulatory
association.
 3. Yet again, the agency may charge the customer the whole of the accommodation cost in advance and
issue him with a voucher in exchange. He presents this to the hotel, which credits him with the
amount. The hotel then presents the voucher to the travel agent concerned and receives payment less
commission in return. Agency vouchers are very convenient for the agencies (which get their
payment in advance) and for the customers, but hotels need to treat them with some care since there
is no standardization. Some agencies issue impressive looking ‘passports’ which actually do not
commit them to paying anything at all.

TOUR OPERATORS

 These include the familiar names whose brochures you will find in any retail travel agent. Many of
the larger ones have their own retail outlets. In all, they sell an enormous number of holiday
‘packages’ and book a comparable amount of space at hotels.

 This category also includes a vast number of smaller operators of various sorts. Some undertake
‘speciality’ work, arranging battlefield or bird watching tours, safaris, ski trips and the like. Others
specialize in arranging conferences. One of the fastest growing sectors is t h a t of incentive travel,
usually arranged by a company for its clients or its successful sales staff. This is a specialized field,
and it has attracted its own full-time companies which provide a range of consultancy and
administrative services.

 Group tour operators do not receive commission because they are not introducing clients but rather
booking the space themselves. They make their money from the difference between the cost of the
separate elements of the ‘package’ (transport, food, accommodation, entertainment, etc.) and the
price they are able to charge for it as a whole. Clearly, the more cheaply such an operator can obtain
hotel accommodation the better from his point of view, so negotiations with them are keen,
especially since the volume of business they control gives them enormous leverage.

 Foreign tour operators often delegate local arrangements to specialist companies called ‘ground
handlers’, who make transportation, tour and other arrangements on behalf of their principals. This
means that while your basic contract is with the tour operator, detailed arrangements may be in the
hands of someone else. Since the ground handler is usually local, this is helpful rather than
otherwise.

HOTEL BOOKING AGENCIES,

 Some areas are short of hotel space and it is particularly difficult to find accommodation in them at
busy times of the year. This is fine for the local hotels, but not much fun for those trying to make
bookings there. This has led to the development of specialized hotel booking agencies.

 Some of these offer this service to individuals. You can often find their outlets in important travel
centres such as major railway stations. They are a particularly useful source for ‘last minute’
bookings. As with most intermediaries, they make their money by charging commission on the
bookings they arrange.

 This is frequently levied in a quick, simple and foolproof way. The client pays the agency a booking
fee (typically about 12.5 per cent of the first night‘s accommodation charge) and receives a receipt.
He then presents this to the hotel and has an equivalent amount deducted from his bill. In effect, the
hotel has paid the agency. Other hotel reservation agencies deal mainly with travel agents or
conference organizers and offer a national, continental or even worldwide service. Such agencies
earn their living from commissions in the usual way, though there is usually also a ‘systems’ charge
to cover the installation of any specialized equipment.
INTERNET,

 As we have seen, group reservation systems restrict the customer to just one company or
consortium’s hotels. The Tourist Information Centre system is not limited in this way, but it suffers
from resource problems which reduce its usefulness. In any case, it still puts an intermediary
between the customer and the hotel.

 The Internet does away with these limitations, as more and more customers are discovering. Any
would-be guest equipped with a computer and a modem can now call up a hotel database covering
his proposed destination and select an establishment on the basis of its location, price and facilities.
He can use the built-in e-mail facility to check its room availability, make a booking and even pay a
deposit by quoting his credit card number, all without having to leave the comfort of his home or
office.

 With a fax connection as well, he can have a confirmation slip printed off. in short, it allows him to
select a hotel anywhere in the world and offers him instant connection at minimum cost, with all the
advantages of immediate response and a permanent record. Figure 46 illustrates the situation as it is
now. Not surprisingly, the Internet has become a major growth area for hotel marketing.

 Effectively, a web site puts the hotel’s front office in front of the would-be guest, and does away
with most of the problems connected with intermediaries. The cost to the guest is limited to the
equipment (which he will have bought for other purposes anyway) and the Internet subscription. The
cost to the hotel is somewhat greater, because it also has to join what is called a ‘destination
database’ (i.e. a kind of electronic brochure or list of hotels in a particular area). This involves a
joining fee, a subscription and possibly the payment of commission as well. If the hotel does not do
this, then guests searching the internet may not come across its name. This development has added a
new impetus to what is called ‘destination marketing’, which (as our
 ear- lier reference to brochures indicates) is actually a very old concept.

 The security of on-line Internet transactions has been a source of some concern. As we Town C have
seen, modern hotels seek to guarantee their bookings by asking the customer for his credit card
details. Until ‘web transactions’ can be shown to be absolutely safe, many customers will be
understandably reluctant to divulge these. The problem affects web commerce as a whole and we can
expect to see various sophisticated developments designed to solve it. The aim is to make such
electronic payments as safe as handing over cash.
TOURIST INFORMATION CENTER,

 The idea behind the Tourist Information Centre is quite different to that of the group reservation
system. The latter aims to help customers to book at group hotels anywhere in the world.

 A Tourist Information Centre aims (among other things) to help customers to book accommodation
at any hotel within its own local area. It resembles the hotel booking service, except that it is not a
commercial enterprise but a local government service.

 The Tourist Information Centre also differs from most of the other intermediaries in terms of the type
of customer it deals with. Group reservation systems tend to be set up by the big international hotel
chains and used by agencies specializing in business travel services.

 Tourist Information Centre booking services tend to be used by private individuals interested in
much cheaper accommodation, often of the bed and breakfast type. Information services for tourists
are very much a European institution. Holland introduced them as long ago as the 1890s, and now
has close to 500 ' W s ' (the Dutch term) at village, district and provincial level, all co-ordinated by a
national advisory body which has standardized reservation procedures. Most other European
countries have similar systems. Some are operated by local authorities, some by regional
governments. The basis for their financing differs in detail, but typically some 60 per cent of their
funds comes from the local or regional government, 20 per cent from registration fees paid by listed
hotels and other establishments (restaurants, camp and caravan sites and the like), and 20 per cent
from profits on the services provided for tourists (the sale of maps, guides, profits on sightseeing
tours, etc.).

 The Tourist Information Centres' main role is to provide information about local tourist facilities,
including shops and restaurants, historic buildings and other sights, festivals and other celebrations.
They also provide details of local hotels and boarding houses, and the great majority will undertake
to book accommodation. Although this is only one of their activities, it is the one which concerns us
here.