Case Study Distributing Sales Functions Between a Hotel's Sales and Catering Departments Carla Mills is the general manager of the Woodfield Plaza, a 400-room first-class suburban hotel. It's early July, and Carla has just reviewed the forecasted year-end profit and loss statement. A couple of areas concern her. First, assuming the hotel ill hit budget the rest of the year, banquet food sales will be down $60,000 to bud- get. Also, the audiovisual revenues and room rental revenues will miss budget by 530,000. Carla calls a meeting with her catering director, Alan Jenkins, to discuss ays to remedy the situation Carla opens the meeting by contrasting the forecasted statement with the bud- get and asks Alan what he plans to do about the decrease in banquet food sales. "You've been here sixty days now, Alan. You should have a good feel for the property and the community. Tell me, why are sales down in your area Alan shifts in his seat. He thinks about the question for a moment, then responds. "Well, I think ultimately it comes down to a problem with selling, he says. "The sales staff knows how to sell guestrooms, but they don't seem to sell function rooms. They don't seem to be aware of opportunities to sell cater- ing, or how to take advantage of those opportunities. I can't remember one event since I've been here that was generated by sales. And from what I've seen in past reports, this has been an ongoing problem. "Okay. That's a legitimate point," Carla replies. "Salespeople certainly could take advantage of those kinds of opportunities. Sales and catering aren't often as united as they could be when it comes to selling our services It's just that no one in sales will take ownership for selling catering." Alan interrupts. Then you take ownership of it," replies Carla. "Look, in fairness to sales, it's not their job to sell function rooms and banquet events, primarily. Their job is to sell guestrooms. In some situations they could probably work a little harder on selling function rooms. But the responsibility for selling catering events ulti- mately belongs to catering, not sales. And since you're so concerned about sales selling functions, how many guestrooms has catering sold? The street goes wavs. lan sits back in his chair, thinking about what Carla has said. "Not many actually" he finally says. "As far as catering taking responsibility for its own sales, Marketing Catered Events and Meeting Rooms ou're right. We need to. But we're so busy taking the calls coming in, trying to 607 them as fast as we can, we haven't had time to focus on increasing our sales skills." You can't continue to be just order-takers and expect your sales to do fine, Carla says. "You need to take responsibility for your sales. You need to take an active role in this. In your own words, you need to take ownership of it. Let me ask you Do you know where you're losing business, and why?" Not offhand, no "Do you know how you're going to solve the problem?" "Well, I think I can come up with a solution," Alan replies. I know you can. And I know your staff is capable. What I'd like you to do is me up with a plan as to how you'll sell catering, and how you'll work with the let's see," Carla looks at her co sales staff to sell catering. Could you get that to me calendar. "Two weeks from today? "I think I can do that Great. Now on to my next concern." Carla holds up the forecasted statement. As you can see from this forecast, by the end of the year audiovisual revenues and room rental revenues will miss budget by $30,000-that's if all goes well the next six months. Now, what do you suggest we do about that? Alan thinks about the problem. "With the room rentals, I think the problem is that we're giving function space away to book more room nights. I understand we have to do this, to some degree, but we're losing money doing it. But don't you think that's a worthy trade-off, to get more room nights?" It would be if it were necessary. But I don't think it is "What do you mean?" Carla asks I think we can keep the room nights without losing the room rental com pletely, if we institute a sliding-scale function fee. "Yes," Carla nods. For example, if the customer picks up 80 to 100 percent of a room block, there's no rental. If they pick up 50 percent of the room block, they'll get 50 percent off the rate, and so on." consider putting a similar scale in place for catering revenues. rentals. Maybe scales will help them deal more effectively with that issue. Excellent idea. That should increase room rental revenues. You may want to Hmmm. Come to think of it, my staff does seem a little too eager to lower Good. Now, what about audiovisual rentals? Ala I need to look into that. I know there are several ways to increase the A.V. revenues, as well as additional ways to increase room rental revenues. How about if I think about the problem in the next couple of weeks, and include n pauses. " my proposals in my plan?" you've come up with." I trust your judgment. Let's get together again in two weeks and see what Great. I'll see you then." Alan leaves the room. Both he and Carla feel that they made some progress in solving their budget problems. And they're confident that in two weeks they'll a plan in place to help prevent similar problems in the future. 608 Chapter 14 Discussion Questions 1. In an ideal situation, what should the distribution of sales functions between 2. Given the responsibilities of a hotel's catering department, what challenges a hotel's catering and sales departments look like? will the director of catering face as the department shifts from simply being production-focused to being sales-focused? audiovisual and room rental revenues? What steps should the director of catering at the Woodfield Plaza take to iden- 3. How could the catering department at the Woodfield Plaza recover more 4. tify the specific causes of his budget problem? Once the specifics of the budget problem have been identified, how should he address the