Incentivize your staff to sell more

Most hostels prefer direct bookings over reservations through a third party.

In another thread we talked about how to convert phone inquiries into bookings. This article outlines how we could actually go about motivating our teams to push for those direct sales.
How to incentivize your employees for direct hotel bookings

The most commonly stated objection to incentives for those who take reservations calls is that “Taking reservations is their job. Why should we have to pay them anything extra?” At first glance this seems logical. However, when their actions translate directly into additional business, there is no reason not to reward them, especially when the reward itself can motivate them to raise their performance to even higher levels. Put simply, when properly structured, transient sales incentive always generate an ROI.

In a hotel, selling is the Sales Department’s job too, but they still get commissions and bonuses for it. Why not the receptionists?

If you want to set up an incentive program, the first thing to do is to determine the measurable goals that will result in bonuses. These should be based on the things that generate the most profit for your hostel. The article suggests:

• Actual Monthly Revenue Vs. Your Revenue Goal
• Call Conversion Ratios
• Upsells To Higher-Priced Accommodations
• Average Revenue Per Booking
• Total Revenue Sold By Agent
• Reservations Sales Mystery Shopping Scores
• Sales of ancillary hotel services and outlets

This assumes that you are able to collect accurate data on these areas. Getting call conversion ratios, for example, could be hard because most hostels just have a simple phone line that doesn’t run through any kind of fancy monitoring software.

The article gives the following pointers for designing a successful incentive plan:

• Rewards should be directly tied to extra revenue. Only pay for those efforts that take your hostel above and beyond the money you were already expecting to make in your forecasting.
• Make sure you’re forecasted goals are realistic. If you notice that you are consistently falling short of your goals each month, then your reception team has no chance of getting a bonus. In that case, the motivation for pushing sales dries up quickly. Maybe you need to adjust the forecast.
• If your forecasted goals are regularly being exceeded, maybe they need to be bumped up. Otherwise the team may start to feel entitled to the bonuses regardless of their performance.
• If you use a metric that does not directly drive profitability (like secret shopper scores or hostel reviews) then the bonus should be smaller or simply presented like a contest with a prize. Or set a minimum score as a requirement for receiving the other bonuses. You can increase or decrease the payout based on whether the actual score is above or below the minimum requirement.
• The incentive can be set up for individual performance, team performance, or both. If you use individual performance it can create a sense of competition which might motivate some people to win. If the same people always win every month though, it might eventually discourage the average workers from striving to be superstars. To combat this, set each person in competition with themselves (ex. Comparing their performance to the previous month) If you have a small team, then an incentive based on team performance usually works better.
• Make the incentive program and its metrics easy to understand and monitor. K.I.S.S. (Keep It Simple, Stupid)
• Keep the time span short. Monthly incentives seem to work the best, especially if the staff is updated regularly on how they are progressing.
• Assign an expiration date when the incentive will end. This helps to ensure that your team sees the rewards as a bonus and doesn’t just take them for granted.
• Post the results for the whole team to see.
• Pay out the awards with a separate check from the normal salary and give them out on a different day from the regular pay. This ensures that the money is viewed as a bonus and not confused with regular compensation.
• Suck it up and pay the taxes on the bonus so the employees get what they are expecting. It’s disheartening when a $100 bonus gets paid out at only $76.

Does your hostel have any kind of incentive plan for your reception staff or for anyone else? What is it based on? (ex. number of guests, number of bednights, total revenue, customer reviews, number of guests who extend their stay, number of guests who participate in activities)

Here’s a thread about Motivating Your Staff in general and another about Motivating Non-Paid Staff.
There is also a thread in the Members Chat section (restricted access) about Hostel Manager Bonus Schemes