STRETCH YOUR CASH WITH TRADE
I want to encourage you to develop a program that can stretch your marketing dollars.
Back in my Marriott years, my staff and I developed a very profitable venture, our Marriott Reciprocal Trade Agreement (RTA) program. Most of our early RTAs were with local radio stations and involved Marriott rooms in exchange for radio time. Room taxes were to be paid in cash by the person occupying the room.
We made agreements with major networks. When I visited Milton Carney of American Broadcasting Company, who handled trade-outs for the network, I was shocked to see hotel folios from our competitors stacked high on his windowsills. He blamed the clutter on his nightmare responsibility: Collecting room taxes his people hadn't paid on check-out and making sure federal, state and local governments were paid.
Discovering similar situations at other RTA partners led to a breakthrough that saved them thousands of hours. We negotiated a two-for-one ($2 of advertising for $1 of hotel goods and services) agreement with all media, covering all room taxes, food and beverage, gratuities/taxes, phone calls and small charges from the gift shop that the guest should have paid. While our clients objected to the ratio, they soon realized that not only was their accounting nightmare solved, they were getting much more than the immediately pre-emptible time they were giving.
By the time we had 25 hotels, we used trade-outs for all of our local and national broadcast needs and most of our national magazine needs and had two full-time accounting employees at our headquarters in Washington, D.C.
One deal I'll never forget was with Washington Redskins Coach George Allen, who traded us red carpet for the team's locker room in exchange for a full-page ad in the Redskins program for Allen's first season in Washington.
One consulting client traded a wedding reception for a new state-of-the-art sound system for his ballroom. Because of his costs for the reception, he didn't get the system for nothing, but I'll guarantee you he got it for at least 50 percent off the regular price.
I've always wanted to trade room and board for college students for painting and other maintenance at the hotel. Many summer resorts have empty rooms during the school year and could feed students in the employee cafeteria. If you accomplish this, please let me know.
By the way, for damage control, we picked out a Bible school with married couples to try this, but my client left before we could sign the deal.
Some reciprocal trade agreements make sense; many more don't. Think them through before rushing into ones for which you'll be sorry. Call me when negotiating. I'll be glad to review the proposal and make suggestions — at no charge for readers of Lodging Hospitality magazine.
Tom McCarthy, CHME, CHA, spent half his career with Hilton and Marriott in sales, advertising and public relations and half in his own training and consulting business, Hotel Professional Education and Consulting of Falls Church, VA. He is a past president of Hospitality Sales & Marketing Association International (HSMAI) and is a member of the HSMAI Hall of Fame. He can be reached at firstname.lastname@example.org or 703-931-0757.
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