Chapter Nine

1. Chapter Nine Understanding Organizational Customers

2. Overview • The organizational customer purchases hospitality products and services for a group or organization that has a common purpose for the purchase

3. Generic Organizational Market • The planner or manager seeks to satisfy the different needs of all members of a group which makes the task difficult • Corporate downsizing has complicated this market relationship • The planner must understand and predict the groups’ needs

4. Generic Organizational Market • Influential factors: • Site visits • Correspondence with sales staff • Word of mouth

5. Meeting Planners • Rely heavily on hotel staff rather than the individual customers • Salespeople, conference service managers, chefs • More experience translates into less dependence on salespeople • The importance of “buy time”

6. Meeting Planners • “Buy time” • Also called purchase cycles or lead times • How far in advance the decision is made to purchase the hospitality product and book the reservation • Determines scheduling of sales, advertising and related marketing activities • With purchase group variety, managing inventory is critical • Depends of the use of the property at different periods of time – days of the week or seasons

7. Meeting Planners • Assessing needs • Each collection of a group with a common purpose has different needs • Major complaints of salespeople are regarding not taking enough time to know the needs of their business

8. Meeting Planners • Resolving conflict • Planners have to work within the organization and with the hotel to anticipate and resolve conflict • Numerous issues • Types of guest rooms, meeting rooms, special meal requests • Schedule a pre-conference meeting

9. Meeting Planners • Executing the meeting • Can be simple if planned well, or difficult if not • Sometimes end user needs are not met as last minutes changes take place • In the end, it is the responsibility of the hotel to provide that service

10. Meeting Planners • Evaluating the results • Post-conference meeting • Hotel can take immediate steps to correct malfunctions and reinforce positive aspects • Planner needs to assess results and communicate with hotel before planning the next meeting

11. Corporate Travel Market • Plans travel and entertainment for a company’s employees • Plan individual schedules • Different trips may have different missions within the same organization • This market is very large, pays good rates, and is consistent business throughout the year

12. Corporate Travel Market • Planner needs to know the service needs of the organization and negotiate contracts on their behalf • Can be important as travel can represent up to 25% of an organization’s cost • Can significantly affect hospitality industry revenues

13. Corporate Travel Market • Knowing the volume • Important on both sides • Room rates are negotiated from the published rack rates • Large travel consortia can provide purchasing power for combined corporate customers

14. Corporate Meetings Market • Covers a wide range of organizational customers • The management meeting • Small meetings with upper management • The sales meeting • Discuss company sales goals and strategies; usually once a year • Training meetings or seminars • Exchange of information and improving performance

15. Corporate Meetings Market • Corporate planner needs • Ensure they will be successful in the eyes of their organization • Need honesty about the capabilities of the hotel and personnel • May need the professional conference service manager more than the salesperson • Quiet meeting rooms and adjoining rooms • An efficient front desk for assigning rooms appropriately • Expected and unexpected needs should be met

16. Conference Centers • Carefully designed lodging facilities that target and meet the specific needs of the small-to-medium size meetings market • Dedicated conference centers with specialized services that are market specific • Governed by the International Association of Conference Centers (IACC)

17. Conference Centers • IACC Criteria that must be met for designation as a conference center: • 60% of available meeting space be dedicated, single-purpose conference space • Rooms separate from living an leisure areas • Available 24 hours for material storage • 60% of total revenue must be conference related • Average group size must be 75 or smaller

18. Incentive Market • Trips that are taken by dealers, distributors, customers or employees of an organization as a reward for superior performance • Meeting and recreational needs • Increases teamwork and morale • Incentive houses are companies that provide professional planning services for this market segment • Incentive planners plan every detail of both business and pleasure

19. Incentive Market • Three forms: • Pure incentive • No business related activities • Incentive plus • Pleasure trip with some sort of informational meeting • 70% of all incentive trips • Incentive weekends • Three day weekend is more business productive because less of the workweek is effected

20. Association, Convention and Trade Show Markets • Groups that need guest rooms, food service, and function space to accommodate their meeting needs and convene at the local, regional, national, and international levels in which membership is usually voluntary

21. Association Elect officers, have social functions and organize activities for the organization Usually meets in smaller groups and social contacts are the main reason for attendance Convention planners Usually meet annually for setting policy and distribution of information Trade shows Goals are to showcase and sell products Hotel can sell rooms and meals to the exhibitors who attend Association, Convention and Trade Show Markets

22. Association, Convention and Trade Show Markets • Hotels must be flexible to the needs of the attendees to be successful • Food and beverage can be lucrative, but not always guaranteed attendance • Need good convention service managers over salespeople • Can be price sensitive

23. Convention Centers • A freestanding large exhibit hall where trade shows are typically housed • Do not have lodging accommodations • Publicly owned and privately operated • Booths or space are sold to purveyors

24. Convention and Visitors Bureaus (CVBs) • Publicly and privately supported by those they serve: • Convention centers • Hotels • Restaurants • Merchants • Theaters • Airlines • Are nonprofit, serving their major constituents who pay fees • Mission is to promote the city as a destination area and as liaison to coordinating all visiting entities

25. SMERF • Price sensitive, not-for-profit organizations including social, military, education, religious and fraternal • Also is a catch-all for organizations that do not fit into other groups • Can fill guest rooms and meeting space during slow periods

26. Government Markets • Can also be booked during slow periods • Reliable source of revenue for budget and midlevel properties • Per diem rates are usually set by local or national law

27. Group Tour and Travel Markets • Leisure travelers who travel in groups with or without an escort • Wide ranging market including travelers with different motivations • Motivations include: convenience, companionship, lover cost, planned itineraries • Motor coach tours

28. Discussion • The various organizational customers discussed in the chapter have a variety of different needs. Do any of them have similar needs? What do they all have in common, if anything?