Hotels are notoriously complex places to do business for suppliers. There are various decision makers including brands, management companies, owners, group purchasing organizations and the hotel itself. Even within that ecosystem, there are dozens of stakeholders within each type.
That’s why traditional food or product brokers and manufacturer representatives are mostly non-existent in the lodging industry. Significant experience in hospitality and a track record of sales within the hotel industry is required to know the ins and outs of the business.
If you are a company that has food equipment, furniture, and furnishings (FF&E), then a professional manufacturer’s representative can be a great partnership generally. But, if your company offers products or services that are operating supplies, food or beverages in the restaurant or lobby stores, guest room products, or technology, etc., you’ll be hard-pressed to find a qualified broker or rep.
With so much at stake, it’s important to choose a knowledgeable company or partner with the necessary experience and contacts to help your business succeed and grow in the hotel business.
Here’s why traditional brokers and representatives likely don’t work:
- Not hotel industry specific. Their focus may be on the retail or grocery industry and they’re not familiar with the hotel industry’s unique selling points and don’t have a rolodex of contacts and relationships with hoteliers.
- They don’t talk hotel language. Anyone in the hotel industry will attest, we have a language of our own and only experienced hoteliers and those suppliers in the industry for a long time will understand ADR, OCC, NOI, MOD, BEO, REVPAR, OS&E, etc.
- Quick burn-out and frustration over lack of income. Because brokers and manufacturer representatives are generally transaction-based, commission-only contractors, there is a long history of the efforts of sales into hotels being frustrating and short-lived if sales lack due to inexperience, which is typically the case.
- They are not solution-based sellers. Yes, hotels want a great deal on products they buy, and they are open to innovative products. However, if the broker or rep does not offer full strategies and after the sale solutions, then the chances of a closed sale are slim. Assurances, communication, and account management relating to your products sale for owners, brands, management companies and GPO’s will be expected by hoteliers.
- The hotel market size is too complex and big to keep up with a database. Think about food brokers selling to grocery stores. These supermarkets are owned and operated by the same company and decision making is easier and faster to get into all stores. Not true for hotels. There are 90,000+ hotels in North America, 650 management companies, and hundreds of owners. Maintaining that database of complex contacts is too hard for most.
Finding experts in selling products to hotels is the first step to help you navigate the process. The cost is significant for companies who try to work with non-hospitality specific reps and brokers that are commission-only based.
iDEAL Hospitality Partners Group always recommends that companies that are new into the hotel market in North America and the CARMECA region, to consider having someone on your own team do the selling and let iDEAL guide the path and launch your company properly. Or, if you have a broker you have found, let us interview them. The cost is too great for companies to try sales methods that don’t work. Take a look at this CASE STUDY as an example of hospitality sales planning.