Wasting Walk-Ins: Does your Front Desk have a Strategy

You’re running 50% occupancy at 6pm.

There is little prospect of filling the hotel tonite.

Rack Rate in the Franchise Property Management System is $69.00.

A Walk-In comes to the desk, an older man, asks the rate and is quoted $69.

He pulls out his Smartphone, and shows a $51 rate if he books online.

Should your Desk Clerk require he book it online, or give the $51 rate to him?
If he complains he’s not very good at booking reservations on his phone, does your clerk insist (technically correct) that it’s a rate only Available if the older man Books on the Web?
Does your Desk Clerk let the man walk out the door?

I watched this exchange happen at a Days Inn I recently photographed.
The Walk-In was allowed to leave.

I asked the next morning, the hotel ran 56% occupancy that night.

Shooting update photos of another hotel, I watched three similar situations in one night

The hotel was running 60% occupancy on a Sunday night.

Again, there was little prospect of filling the hotel that nite.

The Rack Rate in the Franchise PMS was $125. (Sunday was treated as a Weekday, so the Weekend Rated of $99 was not available in their PMS)
I watched as 3 couples arrived without reservations (the property is the first hotel on a State Highway as you drive into this small town).
It was 8:00 to 9:00pm

The Desk Clerk quoted each of the 3 couples, a single rate of $125.
The husbands asked if there was anything lower.

The Clerk asked if they were AARP or AAA members.

They weren’t

Should Desk Clerk stick to the rate in the PMS of $125?

Or should he offer them the $99 weekend rate?

The Desk Clerk didn’t offer the $99 weekend rate and all three couples left.

I asked the next morning, the hotel had run 63%.

I was doing the math in my head as I watched; the Desk Clerk probably made $10/hour at the time. If he worked Full Time, 40 hours a week, those three rooms at $99 a night, could have paid Three Quarters of his Salary for the week. At $75 a night, the three rooms could have paid Half of his Salary for a week.

While I was watching this, I politely and uncritically asked if he was allowed to offer lower rates as it got later and later in the evening. I was wondering if he would have let them go if it was Midnight and there was little prospect of more Walk-Ins.

His response was that the General Manager would have chastised him if he had given the $99 rate.

What was even more shocking to me was that the same company owned this Holiday Inn Express and the Super 8 next door where I was staying.

He never suggested the “walk-in” try the Super 8.

I asked him if the Desk Clerk if the Super 8 was full. He didn’t know.

Again, I asked politely and uncritically, if he and his sister hotel didn’t talk each night and try to help each other out. They didn’t.

As a former Front Office Manager of a 300 room Holiday Inn that enjoyed a lot of Walk-In Traffic, this almost made my head explode. Our rate at the Holiday Inn was so low that no one ever found it too high, so we almost never lost walk-ins, unless we were full.

These late arriving Walk-Ins made me wonder if any hotel had a formula, guideline or scale for how much they’d discount their rate if the Walk-In arrived at 8pm, 10pm, Midnight or 2 am, since the quest was getting less and less use of the room. And I wondered what the price was that the management would definitely want to let the Walk-In, walk out rather than go lower on the rate.

If you can’t get $69 for a room, would you rather it go empty than sell it for $51 for one night?

Is an Unsold $69 room better than a Sold $51 room?

If you can’t get $125 for a room, would you rather it stay empty than sell it for $99 or even $75 for one night?
Is an Unsold $125 room better for the bottom line than a room Sold for $100 or even $75?

The big question is whether you want your Desk Clerks to be bureaucrats that only follow rules or do you want people that make decisions that help the hotel’s earnings?

Does the General Manager, whose bonus is based on sales and profit, check what the occupancy is looking like each nite and give the Desk Clerks what lowest rates are acceptable later and later in the nite? Or do the desk clerks have the authority to make Walk-In Rate Decisions?