Marketing Terms 1

Acquisition cost – This term may apply to either a customer or an organization. To a customer, acquisition cost may include intrinsic costs, such as price, and extrinsic costs such as the time it takes to make the purchase and the cost of gasoline it requires to get to and from the store. To an organization, acquisition cost means the cost of acquiring the customer, including the costs of marketing, the costs of taking reservations and the costs of actually serving the guest.

Action plan – A calendar used for planning and assigning tasks to be completed over the course of a year.

Airline Reservation System – Also known as an ARS. An automated system for taking airline reservations.

Ancillary purchase – A supplementary or additional purchase made in a series of transactions.

Antitrust law – Laws designed to prevent restraints on trade. These laws were enacted in the late 1800s to protect both consumers and business. They prohibit behavior that is unfair and uncompetitive in nature. They also prohibit any actions that violate society’s standards of ethical behavior.

Auction site – A website on which the price of a product or service is determined by the winning bid. Examples are Priceline and Luxury Link.

Average channel contribution – value determined by dividing the total revenue generated by the channel by the total number of transaction it completed.

Average daily rate – Also know as ADR. Calculated by dividing rooms revenue by the number of room sold.

B2B – Business-to-business e-commerce.

B2C – Business-to-consumer e-commerce.

Baby boomers – A generational marketing term. Born between the years of 1946 and 1964, the baby boomers are not only the largest generational segment at nearly 78 million members, they are also the most powerful in terms of both wealth and propensity to spend.

Best available rate – The lowest rate per room available to the general public on a given night.

Best-rate guarantee program – Program that guarantees that the customer will receive the best rate from the organization. If a customer can find a better price than the one posted on the organization’s website, the organization will match that price.

Booking pace – Refers to the pattern and tempo ( rate) of receipt and acceptance of advanced reservations.

Brand equity – The value generated by a brand.

Branding – Placing an identifying mark or logo on a product produced by s specific organization or associating that brand with a service performed by that organization.

Brick and mortar store – The local building that houses a retail establishment.

Bundling – Combining products and services to create a package.

C2C – Consumer-to-consumer e-commerce.

Cannibalization – The concept of a customer leaving a higher-rated market segment to jump over a fence and gobble up lower-priced products or services offered by the same provider to other lower-rated market segments.

Capacity – The amount of space that can be filled.

Central Reservation System – Also known as CRS. An automated reservation system for booking several travel components, including air, car and hotel room.

Central Reservation office – Also know as CRO. An automated reservation system that take reservations for all properties within an organization.

Ceteris paribus – Economic term meaning all things being equal.

Channel – Refers to the source of the booking.

Channel contribution – The revenue generated from a single transaction.

Channel contribution percentage – A percentage calculated by dividing the channel’s total revenue by the total revenue produced by all channels.

Channel production – The number of transactions generated by channel.

Channel of distribution – Avenues that have developed to bring the buyer and seller together. These channels act as distribution outlets through which the sellers offer their products and services for sale to their customers. Channels may be electronic or non electronic. Whereas the sources of a reservation used to be referred to as the source of business, today all sources of business may be tracked via both market segment and the channel that generated the business.

Circular – Moving in a circle. Once a circular process is complete, it simply begins once again.

Closed or closed out – Inventory is no longer available for sale.

Closed to arrival – Means that the customer cannot arrive on that date no mater their intended length of stay.

Commission – The percentage or flat fee above the selling price that goes to an intermediary that must also be added to the cost of distribution. Also known as a load.

Competitive advantage – That component of an organization’s operation in which it excels or maintains an advantage over its competitors.

Basic for Hotelier

Back to Basics

By Caroline Cooper

With so much attention on getting income up and costs down, have we lost sight of some of the basics?

Over the past few weeks I've been interviewing a number of prominent hotel professionals in my series "How to Give Your Hotel a Competitive Edge". One of the messages that kept coming up over and over was about getting the basics right. These are some of the points raised:

The Welcome

Do your guest always get greeted with a smile and made to feel special?

How well do your staff anticipate guests needs before they ask for things?

Do you give attention to detail and have any special little touches for guests?

Do you know what constitutes a good welcome for your guests? Do they like to be fussed over, or would they prefer to be left to their own devices?

When staff service a room do they routinely put everything back to the standard layout, or leave things the way guests have laid them?

The condition and cleanliness of all areas

Do you have a strict audited cleaning programme in place? And does this ensure that the bedroom and bathroom are spotlessly clean (including under the bed, on top of wardrobes, under the basin)? And when was the last time anything saw a lick of paint? Take a look with a fresh pair of eyes and check whether anything looks tired and in need of a facelift. It's a good idea to walk the customer journey at least once a week to check this out.  Better still ask others to do this on a rotating cycle; different people will pick up on different things, and even if you can't address everything at once, at least you'll know where needs attention and can schedule it into your maintenance plan and budget. 

And when it comes to refurbs do you go all out on one or two rooms, or do you spread your budget to the benefit of all areas? There's no one answer to this question, but think about the impact on your guests, your staff and your business as a whole. Is upgrading just one room benefiting only a very small proportion of your business, whilst other areas visible to all guests are left wanting?

The practicality

How practical are your hotel rooms? Unless you experience a night's stay for yourself you wont be able to see what works and what doesn't. I recently stayed in a very snazzy hotel, and it looked great, but when I met with my colleagues at breakfast we were all complaining that none of it was practical. Definitely a case of form over function on that occasion.  Ask yourself these questions:

• Do I have to strip the desk or dressing table of marketing bumf before I can put anything down?
• Is there anywhere to hang the hand towel? Or hang the bath towel so it can be reused?
• Is there anywhere to put down my toiletries in the bathroom, or put my makeup down where I can reach it and still see in the mirror?
• Does the kettle lead reach the socket without having to put the kettle on the floor, and still leave free power sockets accessible if I need to plug in my laptop or phone charger?
• Does the showerhead and water pressure give a decent shower?
• Is there anywhere to hang my dressing gown - either in the bathroom or bedroom?
• Can I see myself in the mirror whilst holding the hairdryer?
• Can I sit comfortably at the desk without banging my knees, and have enough light at the desk to read by without sitting in my own shadow?
• Can I open a window without using brute force? Can I comfortably watch TV from the chair?
• Do I have to strip off half a dozen unnecessary pillows before I can get into bed (and make extra laundry into the bargain)?
• Do you have to get out of bed to switch out the light?

A good night's sleep

When was the last time you slept in one of your own hotel beds? Even if guests don't make use of the hotel facilities or get up early enough for breakfast, the one thing that all your guests will expect is a good night's sleep. So check out your beds. A good quality mattress and base is key; and unless you check your beds regularly you wont know when they need replacing.

A good night's sleep will also be affected by light, noise and temperature.  Do the curtains meet in the middle and cut out street lighting and the sunrise? 

Is there any noise from outside such as bottle disposal from the bar, air-conditioning units, traffic, your own bar or other local bars?  Or internally from lift shafts, banging pipes, neighbouring rooms. I remember one sleepless night being disturbed by music throughout the night, only to discover it was from a radio in the night manager's office in the adjoining room.

And how is the room temperature? Is the air conditioning or heating system clear to adjust without having to call reception? 

Perceived value for money

All of the above, of course add to the perception of value for money, but value for money will mean different things to different people. So how well do you understand what is important to guests? Is what they receive as good as or better than what guests are expecting? 

You should be constantly looking for ways to add value for guests, and particularly look for items that are low cost to you, but high perceived value to your guests. Is everything provided that would be expected at the price point your guests have paid? People's expectation of what's included at breakfast, for example, will be very different if they are paying £12.95 rather than £4.95. Do you let guests know everything that is included in their rate? And do you include everything they might expect to be included, such as free WiFi.

Value for money also means a clear and transparent cancellation policy - having to pay for something you have not used will not be seen as good value! 

Consider how you compare with your competition, and if you are competing with brands and budget hotels focus on the personal touches that you can add that they can't offer.