Those in the field of logistics refer to “the last mile” as the crucial, final leg of the supply chain, where goods are moved to the buyer’s doorstep.
In the accommodations industry, “the last mile” is often a direct inquiry phone call from someone who is searching online, but who is confused by reviews, overwhelmed by the choices they see or wanting to ensure they are getting the best value. Sometimes the reservations inquiry is disguised as a simple “quick question” about amenities, services or fees.
Now, how well is “the last mile” managed these days? What happens when the phone rings? Too often web designers hide phone numbers, making it difficult to even call. Too often callers endure excessive IVR selection options. Worst of all, too often those who answer are politely indifferent, simply answering questions and letting a sale slip away.
Now, think of the marketing costs spent to get website visitors to make those calls:
- Website design and maintenance. Photo images. Copy writing. Updates such as posts, blogs, events.
- Pay-per-click budget
- Channel managers
- Design and execution of email campaigns
- Social media ads and posts, retargeting website visitors
Perhaps the biggest cost of all is OTA commissions, which may not seem like a marketing cost. However, consider that many of those who call first found you on an OTA, also known as the billboard effect, then Googled your phone number to call with quick questions about parking, fees, amenities, views or simply to double-check for deals.
If your staff does not offer to check rates and book them directly, there goes 10% - 25% or more in commission. Worse yet, if the caller goes back to an OTA, they may pick another option.
Here’s another thought. Think about all the hidden costs of an individual website booking. Most leaders do not recognize these as transactional booking costs, as the sum amounts are buried elsewhere in P&L statements and/or included in franchise fees. Some examples:
- CRS direct booking engine fee, which ranges from one to a few dollars per reservation
- GDS booking fee for corporate, travel agent bookings, including GDS pass-through charges and agency commissions
- OTA channel connection / pass-through fees for simply passing the booking along to your PMS
- Brand booking commission fee for brand.com and brand app bookings
So when someone calls at “the last mile” of hotel distribution with a quick question or to double-check a rate, if your staff secures that booking, costs such as these are saved.
Think also about the potential value of these calls. Just calculate your average daily rate x average length of stay as a starting place, and the value of a call becomes very clear. Example: $200 ADR x 1.5 night ALS = $350.
Yes, people still call, and contrary to popular belief, people of all ages are calling. In fact, according to a recent article from McKinsey & Company about its "Mind the Gap" survey:
- 71% of Gen Z consumers listed live phone conversations as among the most preferred customer service support channels, compared to 81% of millennials, 86% of Gen Xers and 94% of boomers.
- One company we surveyed reported that its Gen Z customers are 30 to 40% more likely to call ’em up than millennials, using the phone as frequently as baby boomers.
A quarter of Gen Zers say they expect live phone support tools when dealing with premium brands or services.
While urban legend has it that only the aged Baby Boomers call, in the travel accommodations industry, the motivation to call is actually related to how important the travel plans are. In other words, the more important the trip, the larger the party, the more emotionally connected they are to their travel plans, and — pay attention here luxury operators — the higher the rates, the more likely their research will also include a phone call.
So what should hospitality leaders in the accommodations industry be doing to better-manage “the last mile” of distribution?
- Post your phone number prominently, and if you still have in-house reservations OR a dedicated call center team, add web copy that says “Call Inhouse Reservations” or “Call Us Directly” or similar.
- Ensure that your staff recognizes phone calls as being revenue-generating opportunities, not interruptions.
- Train them to turn what appear to “only” be quick questions into opportunities by saying “Now that I’ve answered your questions, can I check our rates for you?”
- Engage a telephone mystery shopping company, such as my company or any of the other fine providers we compete with, to identify training and coaching opportunities.
- Consider a “bucks for bookings” incentive program to motivate and celebrate success. One to a few dollars will add up for your staff on payday, and the cost is far less than any online booking, even a direct one.
Doug Kennedy is president of the Kennedy Training Network, Inc. Contact him at doug@kennedytrainingnetwork.com.
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