The Challenge
Alix Filart, Complex Revenue Manager at the Westin and Sheraton Kansas City Hotels, realized they had a problem. They weren’t charging late fees for late cancellations—specifically when the reservations were booked through Online Travel Agencies (OTAs). They analyzed the reservations dating back 3 years and found they collected less than 1% of late cancellation fees from OTAs. Their baseline was basically zero!
Their dismal record left Stakeholders from the Finance and Revenue departments understandably disappointed. When they brought the issue up with the Front Desk Team—the department responsible for collecting the late fees—they let the team know they felt frustrated. They felt they were being blamed when they knew they weren’t being set up for success.
Given the opportunity, Alex set a target to increase the collection of late OTA cancellation fees by 50% by the end of the year. Then the team started a conversation with the associates at the front desk.
The Discovery
After spending time with the Front Desk Team, they realized there was no clear direction or method for them to identify which reservations were from Online Travel Agencies (OTAs). Another issue was that due to the high turnover rate, not everyone had the same level of training and familiarity with the rate plans necessary to make the determination.
There was also a disconnect within the department. The Night Manager thought that the Auditors were doing the work and the Auditors weren’t aware they were supposed to be doing anything with the cancellations. No one at the Front Desk wanted to own the process so they pushed it to other departments citing an overwhelming workload.
They discovered that the billing method for Online Travel Agencies was significantly different from the method used for normal reservations. OTAs included both direct billing and virtual credit card payments. It was inconsistent. The team did not have the tools to identify which rate plans were associated with Online Travel Agencies and they didn’t know how to charge cancellation fees specifically for the OTAs.
The team responsible became receptive to the project once they understood that Alex and the improvement team were working to make their lives easier. They listened to their pain points and then worked with them to create a simple yet effective solution.
One of their most important realizations was that it was nearly impossible for the associates at the Front Desk to become familiar with hundreds of rate plans and then use them to determine which rates were eligible for late cancellation fees. Given the high turnover, they realized the solution would most likely involve some supporting technology.
The Improvements
Alex reviewed the report being used by the Front Desk Team to identify canceled reservations, and then identified which rate plans belonged to the Online Travel Agencies. Instead of training the associates to remember the rate plans they devised a report, using Crystal reports, that identified only the cancelled OTA reservations so they can collect on them.
The team conducted a 6-month pilot and managed to improve the collection process at both properties by over 60% by the end of the pilot period. They did even better than our 50% goal and Stakeholders were elated with the results. The Front Desk Team was much happier with the new process because it was so much simpler—and it required much less effort.
The improved process resulted in increased revenue for both the Sheraton and the Westin. Building a workable solution also led to increased associate engagement and higher engagement scores for the Front Desk Team.
Reflections
Alex realized that being customer-centric doesn’t apply exclusively to external customers—it includes internal customers and people you work with. It’s often best to look through the their side of the window rather than peering “in” from your side to understand the whole situation. Seeing the process from both angles helps you come up with a solution that works for everyone. That’s success!
Alex Filart was most recently the Complex Revenue Manager at the Westin and Sheraton Kansas City Hotel at Crown Center. He was responsible for leading the Group Housing/Reservations Team. He managed room inventory and rate plans at both properties while providing forecasts to promote productivity and meet budget needs.
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