By Ed Ianarella

Jack DeBoer is credited with founding the extended-stay segment of the hospitality industry. In the mid-1970s, he realized that his apartment empire was suffering from an economic downturn in the U.S. economy, and it needed a fast repair to regain favorable economic standing. DeBoer converted two of his apartment complexes in Wichita, Kan., into a new hybrid apartment-hotel product, called the Residence Inn. It was part apartment, part hotel, but 100 percent ingenious and thus the extended-stay segment was created.

Many hospitality industry experts thought extended-stay was a passing fancy — a blip on the radar screen, which would soon vanish. Thirty years later, this relatively new and very hot segment continues to be the talk of the hotel world with its incredible guest loyalty and healthy GOP (gross operating profit).

Let’s focus on the selling aspect. Here are some thoughts and observations from my experience in extended-stay sales:

• You can’t take ADR to the bank. The only thing you can take to the bank is revenue. Don’t get too hung up on extended-stay average rates, but if you must, know that a few of the upscale brands are boasting ADR’s north of $100!

• Concentrate your selling efforts on the extended-stay travel occasions: training, relocation and temporary assignment. Also known as special projects, temporary assignments are the largest/most complex of the three. Not as large as the first three, but worth noting is the “family flux” travel occasion, including rooming needs associated with personal lifestyle changes such as divorce, outpatient medical housing and home disaster circumstances.

• Remember (and practice) Pareto’s Principle: 80 percent of results from 20 percent of your efforts. Translated to the extended-stay segment, it would be 80 percent of business from 20 percent of your accounts. But don’t take the percents literally! You might have a 70-to-30 or 60-to-40 ratio at your facility, but the concept is typically still viable: a few big producers can provide you with a nice base of room nights upon which you can layer in smaller (and higher rated) accounts.

• Don’t believe that simply if you build an extended-stay property it will attract guests. This is not usually the case. Nothing will replace direct selling in your backyard (typically within a five- to ten-mile radius from your property). Don’t rely on advertising as a major ally either.

• Make sure someone, preferably a full-time employee, is dedicated to selling your extended-stay product every day. If your brand’s financial model doesn’t require you to hire a salesperson, consider breaking the model and hiring a full-time salesperson.

• Get tuned into extended-stay-related SIC Codes, which are issued by the government in the U.S. and Canada. These Standard Industrial Classification Codes identify all industries by assigning them a number. More importantly, history has shown us that certain industries are more extended-stay-friendly and typically yield more long-term business than others. If you are a franchisee, ask your franchisor for the SIC Codes that are most helpful to your specific brand. These codes are not a guarantee of selling success, but are a strong indicator of where we should be looking based on historical performance of extended-stay hotels.

• When attempting to saturate or infiltrate corporate accounts, focus a lot of effort on the specific departments that traditionally generate more extended-stay than most others, including human resources, training and travel departments.

• Remember the largest producer of business: the government. Government business may seem intimidating, but it can provide you with a great source of revenue. Booking it requires special knowledge and most brands don’t offer much help, which is unfortunate. As a basic starting point, do all of your hotels have a FEMA number needed to do government business? The FEMA number is for federal employees when traveling. FEMA oversees the approval process: an inspector must approve any property requesting a FEMA number to comply with federal fire safety laws (sprinklers, alarms, etc.). Some information is available at www.fema.gov, but the process for hoteliers is often confusing and frustrating. This is why I recommend working with a hotel consultant who specializes in assisting in the process of obtaining a FEMA number as well as increasing business through government business webinars and/or government business workshops.

• Make certain you are calling the correct decision-makers in each industry and asking the most pertinent questions that apply to their job descriptions. Otherwise, you’ll be wasting their time and potentially alienating these individuals and businesses.

• Be sure your salespeople are familiar with a professional selling process. It really doesn’t matter if we know whom to call if our salespeople lack the selling techniques to book quality business on a consistent basis.

• So all of your hotels are not extended-stay facilities? Don’t miss out on the extended-stay revolution because of this. More traditional hotels can still capture a portion of the lucrative extended-stay market by having tiered rates with respect to local extended-stay facilities, offering units with more space, and slightly modifying your services/amenities (i.e., add microwaves and refrigerators to some units, offer grocery shopping service, etc.). These changes allow a traditional hotel to “act” more like an extended-stay hotel without major expenses or capital investments.

— Ed Ianarella is the president of Stonehenge Consulting Group, an international consulting firm specializing in sales training and marketing for the hospitality industry. He can be reached at 717-464-8748 or ed_i@comcast.net.