Improve sales performance via personal selling activities: the case of Hoang Hai Long Hotel

Table of Contents Acknowledgement ........................................................................................................ 2 List of Table ................................................................................................................. 5 List of Figure ................................................................................................................ 5 1. Introduction ................................................................................................................ 6 2. Sales Analysis .............................................................................................................. 7 2.1 Guest sources analysis............................................................................................ 7 2.2 Revenue stream .................................................................................................... 11 2.3 Problem context .................................................................................................... 13 3. Problem Identification ............................................................................................. 15 3.1 Methods ................................................................................................................ 15 3.2 Ineffective personal selling activities ................................................................... 16 3.3 Lack of advertisements activities ......................................................................... 18 3.4 Unattractive sales promotion................................................................................ 19 3.5 Problem validation................................................................................................ 20 4. Causes ........................................................................................................................ 23 4.1 Poor selling skills ................................................................................................. 24 4.2 Lack of target customers data............................................................................... 25 4.3 Weak customer’s relationship .............................................................................. 26 4.4 Cause validation ................................................................................................... 27 5. Alternative Solutions ................................................................................................ 29 5.1 Develop tracking customer system: CRM software ............................................. 29 3 5.2 Doing surveys on partners’ customer ................................................................... 31 5.3 Solution validation................................................................................................ 33 6. Action plan of Organization .................................................................................... 34 7. Conclusion ................................................................................................................. 35 8. Appendix ................................................................................................................... 36 References ....................................................................................................................... 49 4 List of Table Table 1: The price of Hoang Hai Long Hotel Table 2: The price of Hoang Hai Long Hotel Table 3. Revenue stream from Y2017 to Q3.2019 Table 4: Action plan Table 5: Revenue statement 2017 - 2019 List of Figure Figure 1. The sources of Hoang Hai Long Guests from 2017 to Q3.2019 Figure 2. The purpose of staying of Guests Year 2018 Figure 3. The purpose of staying of Guests up to Q3.2019 Figure 4. Breakdown revenue on purpose of staying 2018 Figure 5. Breakdown revenue on purpose of staying 2019 Figure 6. The channels of booking in Year 2018 Figure 7. Revenue of each services from Y2017 to Q3.2019 Figure 8. Revenue quarterly from Y2017 to Q3.2019 Figure 10. Possible problems map Figure 11. Cause – effect map Figure 12. Possible causes map 5 IMPROVE SALES PERFORMANCE VIA PERSONAL SELLING ACTIVITIES: THE CASE OF HOANG HAI LONG HOTEL 1. Introduction Hoang Hai Long hotel is a three-starts hotel in central of Ho Chi Minh City which is located on Pham Hong Thai street, Ben Thanh Ward, District One. There is one of the best locations in the center of Ho Chi Minh City as it is near Ben Thanh market, many famous destinations and crowded entertainment places. The hotel does not only provide rooms services but also has other services such as restaurant & bar; gyms, spa & massage; conference room; laundry service 24/24, tour booking; air ticket/ train ticket booking; shuttle service Hotel – Airport; motors/cars for rent. The capacity of Hoang Hai Long is 110 rooms which can provide service for about 400 guests. The restaurant can accommodate more than 200 guests while the conference room can contain around 100 guests. Hoang Hai Long hotel has nearly 50 staffs working in shift including fulltime and part- time in hotel room area and restaurant area. Types of Room Monday - Friday Saturday - Sunday Double Superior 1.896.000 VNĐ 2.275.000 VNĐ Superior Twin 1.896.000 VNĐ 2.275.000 VNĐ Deluxe Twin 2.109.000 VNĐ 2.531.000 VNĐ Executive 3.153.000 VNĐ 3.784.000 VNĐ Suite 3.580.000 VNĐ 4.296.000 VNĐ Deluxe Double 4.262.000 VNĐ 5.114.000 VNĐ Table 1: The price of Hoang Hai Long Hotel 6 2. Sales Analysis 2.1 Guest Sources Analysis: Guest Sources 2017 2018 2019 (Up to Q3) Ho Chi Minh City 12.30% 11.20% 14.80% The North (excepted HCMC) 4.80% 4.30% 5.30% The Central 16.90% 19.10% 22.80% The South 29.70% 30.40% 27.90% Asia (excepted VN) 30.20% 28.20% 23.70% Other countries 6.10% 6.80% 5.50% Table 2: The price of Hoang Hai Long Hotel 120.00% Guest Sources From 2017 to Q3/2019 100.00% 6.10% 6.80% 5.50% 80.00% 30.20% 28.20% 23.70% 60.00% 29.70% 30.40% 27.90% 40.00% 20.00% 16.90% 19.10% 4.80% 4.30% 22.80% 5.30% 0.00% 12.30% 11.20% 14.80% 2017 2018 2019 (Up to Q3) Ho Chi Minh City The North (excepted HCMC) The Central The South Asia (excepted VN) Other countries Figure 1. The sources of Hoang Hai Long Guests from 2017 to Q3.2019 7 Purpose of Staying 2018 Conference guest 33% Business guest 21% Others 4% Independent tourist 15% Group of tourist 27% Figure 2. The purpose of staying of Guests Year 2018 Purpose of Staying 2019 Conference guest 33% Others 4% Independent tourist 12% Business guest 22% Group of tourist 29% Figure 3. The purpose of staying of Guests up to Q3.2019 According to the Report, most of guests come from The North and Asia area (mainly is Korean and Chinese) which account for nearly 60%. However, this amount is decreasing from 2017 to 2019 in the structure of the guest sources. This amount of year 2018 decreased lightly 1.3% compare to year 8 2017 (59.9% to 58.6%); forward to Q3/2019 this amount reduces 7% compare to year 2018 (58.6% to 51.6%). The next large amount is accounted for around 30% - 35% which belongs to the sources of Ho Chi Minh City and the Central. Besides, more than 50% of hotel guests come for joining in conferences/meeting and for business purposes. Conference guests can come privately or in group of people made reservation by companies or government entities/organizations. These guest come for conference lead to the using of conference room and restaurant service while the private guest come for their own business outside or meeting outside do not bring revenue for other service beside room service. We will analysis the revenue stream to see the picture of all services of the hotel in the next section. From year 2018 to third quarter of year 2019, almost different group of customers had the percentages unchanged or lightly fluctuated except the group of independent guests which decreases 3% in nearly a year. BREAKDOWN REVENUE 2018 Others BREAKDOWN REVENUE 2019 Others 3% Conference guest 40% Independent tourist 18% Group of tourist 24% Business guest 15% 3% Conference guest 41% Independent tourist 14% Group of tourist 25% Business guest 17% Figure 4. Breakdown revenue on Figure 5. Breakdown revenue on purpose of staying 2018 purpose of staying Q3/2019 9 Learn deeper about the contribution of each groups classifief by staying purpose, the author can conclude based on the pie charts above that the revenue earned from group of independent guest dropped worst from 2018 to third quarter of 2019 while the other groups are constaint or growing. The increasing of the other groups because of the decreasing of group of independent guest instead of increasing in sale index. The reason is the total revenue goes down from 2018 to Q3/2019. In conclusion, based on both the amount of staying purpose and revenue contribution, the number of independent guests and revenue earned from them are decreased. Channels of Booking 2018 7.70% 39.80% 5.20% 28.90% 18.40% Hotel Directly Tourist Company Outsources/Agency Private company Others Figure 6. The channels of booking in Year 2018 Almost booking are made through outsources and agency which accounts for approximately 40% and directly with hotels which covers nearly 30%. And more than half of them staying at hotels for conference and business purposes. To sum up, for booking channels, the hotel has been focusing on group of people booking through both channels outsources and directly with hotel. 10 2.2 Revenue Stream Room Services Restaurant Services Other Activities Other revenue Hoang Hai Long Hotel receives revenue from not only room service but also restaurant service and other activities such as tour booking, air ticket booking, motor hiring, etc.… The other revenue related to financial such as interest. So we will put more effort on the revenue stream from rental room, restaurant and other activities/services. Breakdown the revenue based on activities to see clearly their contribution for the total revenue of hotel. Each line has different characteristic and tasks as well as working process. Revenue Stream 2017 2018 2019 (Up to Q3) Room services 65.5% 62.7% 58.1% Restaurant services 28.3% 26.3% 24.9% Other activities 5.1% 7.1% 11.9% Other revenue 1.1% 3.9% 5.2% Table 3. Revenue stream from Y2017 to Q3.2019 11 Revenue Stream from 2017 to Q3/2019 65.5% 62.7% 58.1% 28.3% 26.3% 24.9% 5.1% 11.9% 7.1% 1.1% 3.9% 5.2% ROOM SERVICES RESTAURANT SERVICES OTHER ACTIVITIES OTHER REVENUE 2017 2018 2019 (Up to Q3) Figure 7. Revenue of each services from Y2017 to Q3.2019 14,000,000,000 12,000,000,000 10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000 - Q1/2017 Q2/2017 Q3/2017 Q4/2017 2017 8,304,451,000 11,152,383,00 12,475,719,00 9,723,357,000 2018 7,490,323,000 10,719,036,00 11,636,834,00 9,421,551,000 2019 7,865,228,000 10,059,344,00 10,438,275,00 2017 2018 2019 Figure 8. Revenue quarterly from Y2017 to Q3.2019 According to the sales report, the revenue fluctuated from 2017 to Quarter 3 of 2019. Although it does not decrease continuously through these period, the total revenue of year 2018 is less than around 10% compares to the amount of year 2017. The revenue reaches to the highest level at every 12 third quarter and drops to the least at first quarter each year. As the third quarter includes the summer holiday so it affects to the amount of tourists while the first quarter includes the Lunar new year without meeting or conferences during this time. Beside the difference among these quarters, in general, the revenue from 2017 to 2019 seems to decrease. The revenue earns from room services and restaurant decreased while the revenue of other service not change a lot lead to the changing in the structure of revenue stream. The percentage in the structure of rental room and restaurant decreased. The percentage of room service drops around 12% in 2019 compares to 2017 while the restaurant service reduced about 11% in 2019 compares to 2017. In year 2017, although the meeting room or conference room were not to be hired, the group of guest who joined the meeting/conference outside the hotel still use the room service or restaurant or party at Hoang Hai Long area. In 2018 and 2019, the rental of meeting room or conference room still not reach many bookings but the number of group of guests are decreasing. Hoang Hai Long not focus on marketing strategy to attract more customers. They pay more commission for the outsourcing. The outsources of Hoang Hai Long are including personal and companies, agencies. The commission rate is agreed between two parties depending on number of guests or rooms and the regularly schedules or other agreements. The target customers of the hotel is group of guests. They use the relationship with the person that has right to booking or relationship among outsourcing with companies or entities to make the reservations and sales. There are many inviters of conferences and meeting staying at Hoang Hai Long hotel come from government entities such as People of Committee, Department of Justice and other Departments, Institutions, etc.…. 2.3 Problem Context All the customer groups’ revenue decreased from year 2017 to Q3/2019 while the main groups of hotel are still conference guests and business guests, which accounts for more than 50% of total guests of Hoang Hai Long. However, with the development of digital marketing and technologies, 13 the performance of group of independent tourist of Hoang Hai Long hotel is quite poor. This development not only creates strong competition market but also bring a huge change for the companies. Nowadays, tourists can make booking themselves in many choices of channels such as Traveloka, Agoda, Skyscanner or Wego…. The tourists, special teenagers like backpacking tourism so they use these channels quite more often. That is the reason why we want to improve the number of this group of guests which just accounts for 12 - 15% of the structure. And this group is the only one group that its percentage in total structure decreased in year 2019. The reasons of this reduction in the structure are rare loyal customers and the number of new customers in this group consecutively decreases. POSSIBLE PROBLEM SYMPTOMS Ineffective personal selling activites Poor sale performance of group of independent guests Lack of advertisements activities Unattractive sales promotion Figure 9. Possible problems map 14