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Optimize Your Revenue Through a Reservations Center Enhancement
Jul 25, 12 | 12:07 am
By Larry Mogelonsky, MBA, P. Eng. (www.lma.ca)
Recently, I had a chance to sit down and discuss some of the benefits of outsourced inbound central reservation offices (CRO) with John Smallwood, chief executive officer of Travel Outlook (www.traveloutlook.com).
Consider the operations of your own reservations center: Who answers reservations requests during lunch breaks, on weekends, or after hours? Does a call to reservations go to voice mail? In peak hours, do inbound reservations requests roll over to the front desk, where telephone calls interrupt guest service activity? Or, does a reservations call ever go on ‘hold,' pushing a guest determined to stay with you to their favorite OTA to make their booking, or heavy forbid, to a competitor? And, what does a poor reservations call say about your guest service level?
All of these scenarios are real. Their impact on revenue generation is substantial.
Since the 2008-2009 downturn, most hoteliers have resisted adding staff to all departments, including reservations, looking at alternate ways to meet business needs.
A chain property can always rely on their corporate team to fill a personnel gap. For independents, selecting an outsourced CRO to augment the reservations team can meet these needs without building your internal staff. This is where companies like Travel Outlook come in. Rather than just serving as makeshift ‘filler', these new systems seamlessly integrate, and, moreover, fulfill their role on par or even better than your current reservation team.
This is what I gleaned when I approached John for an interview. Read on and perhaps your idea of an outsourced call center will be changed as well.
What's your background in the hospitality industry? How did you get involved with Travel Outlook?
I have been a hotel operator and owner since 1982, mostly in Santa Fe, New Mexico. Since my degree is in marketing, I have always been interested in the challenge of increasing market share. In my view, even though it is often the most profitable channel, the voice channel is seemingly lost in the proliferation of online and mobile booking options. We saw this as a potential niche for a new, innovative CRO, one dedicated to the absolute best possible performance in voice reservations and guest satisfaction.
What are the key differences between your inbound call center and those of your competition?
For starters, our competitive advantage stems from extensive training and hiring the best agents available, often in the cities where we have client hotels. We pride ourselves on the training and performance of our agents. We closely track our performance in the two most critical areas: time on hold and call conversion. The average hold time for all of our calls since January 1 this year was about 26 seconds, and this includes the ‘this call may be recorded or monitored' message. And, for most clients, our conversion of qualified reservation calls to revenue typically exceeds 70%.
We accomplish these results because of our intense focus on our agents' background and training. We've found that it is much easier to train a hotel professional to function in a call center environment than it is to teach a call center agent what they must know about hotels to perform. Because of this, we concentrate our hiring efforts to find the best and brightest hotel professionals to answer calls. In fact, many of our current agents worked as reservationists in our client hotels, enabling the hotel to reduce overhead while also retaining knowledgeable, experienced staff to answer incoming reservation requests.
Additionally, we are the only CRO that trains its agents on our clients' individual Property Management Systems (PMS). Because we're able to book reservations right into a client's PMS, this saves our clients GDS commissions and other pass-though fees. Travel Outlook is entirely virtual, meaning that we're not restricted to hiring agents in one particular location, so we can often hire an agent who resides in same regional market as our clientele. This is invaluable when a guest asks a simple question like, "Can you recommend something interesting for us to do after dinner the night we check in?"
Lastly, we believe that our rate guarantee is unique to this particular niche industry. Our rate guarantee, which is analyzed monthly, pledges that our agents will achieve the same or higher ADR as the hotel's in-house staff, or we will credit the monthly total difference on the reservations we booked on our next invoice.
For example, if in a given month the hotel's agents achieved an overall ADR of $155 and our agents achieved $150, and if we booked 500 room nights, we would credit the next invoice for the difference times the number of nights booked, or $2500 ($5 x 500 room nights). This assumes we have a tiered rate system from which to sell, starting with the rack rate.
How does the cost structure work for hotels?
We charge only on consumed rooms for reservations we book, similar to how a travel agent is paid via a commission rate. There are no per-minute charges and no per-transaction fees for our service; hotels only pay us a percentage of actual room revenue received from the guest after the guest has paid and departed. We don't charge for service calls or cancellations, and we don't charge for the initial set up or training costs.
Our value proposition is simple. We expect that our skilled, professional team will generate more than enough revenue to pay for our services and also add revenue to the hotel's top line, allowing the hotel to focus on serving the guest. The end result: higher net operating income.
What are the benefits of using an inbound call center to handle reservations?
It's not economically feasible for a hotel to hire enough in-house reservations agents to answer every single call that rings in, to not put any callers on hold and to spend the time needed to sell each caller using a defined multi-step sales process unique to the hotel. By recruiting a CRO to augment in-house reservations, we guarantee that the hotel's voice channel ADR will increase, in addition to these other benefits:
1. Increase occupancy. Our team closes 70‐80% of qualified reservations calls.
2. Heighten consistency. No more worries about turnover and training. We'll always be there, ready, and selling consistently, and always with the knowledge that we're only paid on consumed rooms.
3. Improve social marketing ratings. By allowing the front desk team to concentrate on in‐house clients and not bogging them down with reservation calls, we can help to maintain and positively impact online review site rankings like TripAdvisor.
4. Brand equity. We understand that hotels have a defined marketing message, and we present the brand message clearly to reinforce its positioning.
5. Professional reporting. Our sophisticated reporting provides critical marketing information that can be used to earn a better return from the marketing budget.
6. Staying in step with technology. If needed by our clients, we can implement innovations such as click-to-chat and click-to-call.
How do you go about training your staff to handle each property's specific needs?
Property training is segmented into three distinct categories for all agents: rigorous training in our proprietary proactive sales system, individual property and PMS training, and live call shadowing. Our agents are also segmented into three teams called Alpha, Bravo, Charlie and assigned specific property sets based upon skill level and geographic location to the client. At the end of these stages, the trainee is then provided an online testing system that covers Signature Sales®, property management system knowledge and property knowledge for each of clients. The agents must pass this online test with a score of 90% or more to advance to the next training stage. Often, we use hotel management to augment our agent training for a more personalized service.
How do you keep your staff fully up-to-date with individual property revisions?
All properties we work with complete an extensive property survey at the point of signing with us. The form accesses a live database account that each property will use to record its property details, with a unique login to be able to access its account and make changes in live time. The data provided populates our proprietary agent data interface that our agents use to access up-to-date information about the property.
What qualities do you look for in hiring new telephone operators?
Prior hotel experience particularly in customer service (eg. front desk or reservations) is a key determinant for us when looking at potential new hires. Additionally, we also look at computer skills, forward-leaning sales experience and positive outlook to a commission-based structure.
How does a hotel switch from their current telephone operator to Travel Outlook?
We send the hotel a local telephone number that is programmed into our call center software. The hotel forwards its toll-free number and overflow channel from its phone system to ring to this number. The next call comes to us and not to the old call center.
What about quality control? Are the calls recorded so that hoteliers can listen to them?
Our system is 100% transparent. We record every reservations call onto our cloud storage facility. Each month we provide full reporting, documenting parameters such as call conversion, ADR, hold time, call denials and call volume. Clients can and regularly do request recordings for a specific interaction.
We also have a small team of shift supervisors assigned around the clock. In addition to managing the agent interaction, call dynamics and assisting with caller requests, supervisors are also responsible for doing live call monitoring through their shift. This provides an opportunity for the agents to receive live feedback on their performance and, if needed, the ability for a supervisor to cut into the call personally and resolve any issues that have been communicated.
Who are you currently partnered with?
A short list of cross examples includes Cedarbrook Lodge in Seattle, Washington, Tivoli Lodge in Vail, Colorado, , Old Santa Fe Inn in Santa Fe, New Mexico, Resort at the Mountain in Mount Hood, Oregon, Lodge on the Desert in Tucson, Arizona, Hotel Colorado in Glenwood Springs, Colorado, and the Eldorado Hotel in Santa Fe, New Mexico.
About Larry Mogelonsky
Larry Mogelonsky (firstname.lastname@example.org) is the president and founder of LMA Communications Inc. (www.lma.ca), an award-winning, full service communications agency focused on the hospitality industry (est. 1991). Larry is also the developer of Inn at a Glance hospitality software. As a recognized expert in marketing services, his experience encompasses Four Seasons Hotels & Resorts and Preferred Hotels & Resorts, as well as numerous independent properties throughout North America, Europe and Asia. Larry is a registered professional engineer, and received his MBA from McMaster University.
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