What to Know Before You Outsource

By Kevin Croke, Director of Sales and Marketing, The Roosevelt Hotel New York | August 10, 2009

To effectively manage their bottom lines, many independent hotels require sophisticated revenue management technology and specialized sales and marketing support; however, the budget and manpower needed to sustain such endeavors internally may not be an option. If such is the case, the selection of third-party representation is one path that operators can choose to follow. The companies that hoteliers select for these or other initiatives will operate as an extension of their own team, so operators need to be thorough in their evaluation process.

Know your tech needs
Before making any technology decisions, the first thing operators should do is understand their own technology needs. Are you looking for help with revenue management, your booking engine, your website, or something else? By narrowing down the focus early on, operators won't be bogged down with reviewing extraneous services.

Most hotels seeking representation need a reliable central reservations system (CRS) for efficient distribution to ensure up-to-date rates and availability globally, without which sales and marketing efforts are wasted. Without the big chains' IT budgets, independent hotels have to offer a comparable shopping and booking experience.

Hoteliers also need to evaluate a representation service's technology in terms of reliability. One percent downtime is admirable. However, in terms of performance figures for your CRS, one percent downtime amounts to a colossal seven hours each month, or more than three-and-a-half days a year that your hotel won't be available.

It is also beneficial to understand the importance of a technology's response time. Research suggests that if a website doesn't respond to information requests within four to five seconds, your guests will go elsewhere. The same applies to global distribution systems (GDS), which will automatically time out if you exceed the response time limits. Your replies to shopping and booking requests need to be on their way back to the customer in a fraction of a second, every time.

Sales and marketing support
Sales and marketing support is also incredibly important when considering third-party representation. For example, the Roosevelt New York (www.theroosevelthotel.com), which works with Utell Hotels and Resorts (www.utell.com) and World Hotels (www.worldhotels.com), benefited from increased visibility with potential guests around the world. Management didn't want to assume the overhead of an internal sales and marketing department, and nothing in-house could compare to the relationships and manpower the outsourced teams offered.

In this economy, it's flagrant to not be as aggressive as possible in your marketing efforts. As an independent hotel working to compete for global business, operators need the representation company to bring to the table parties that hoteliers can't reach on their own. Good sales and marketing starts with good relationships.

Campaigns & promotions
Review the types of campaigns and promotions that are offered. Once you join, you should feel the benefits of membership through proactive promotion. For example, Utell runs periodic GREATRATE campaigns for agents and buyers that allows member hotels to opt-in to participation. Will you have the opportunity to be a part of similar promotions? What about regional events targeting agents and buyers?

Your representation decision should result in greater efficiencies and, of course, more bookings. Look for the company that fits your property's unique needs. Once you make a decision, nurture the representation relationship so you can realize the greatest technology, sales and marketing benefits. Speaking globally, that should translate to your success.
 

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