As seen on Hospitality Upgrade, May 19, 2020
2020 is a year like no other — at least we hope so. At the end of 2019, who could have imagined what would happen to our industry. Smart hoteliers were planning for the possibility of a small downturn. Smarter hoteliers were considering how to steal share before a downturn took hold. Either way, a global pandemic was not in anyone’s plans.
Now as Asia is on the path to recovery, Europe is stabilizing, and the Americas seem to have turned the corner, it is time to prepare for the next steps. Hopefully, you have not waited until now to start the process. With any foresight, your teams have been planning their recovery path and are waiting for the right moment to strike.
Sales teams need to look at history to understand when to advance. In every economic downturn over the last 30 years, recovery has started with transient business (both corporate and leisure) then grown with group business. These segments will recover in the same way they always have.
Lean In to the First Segments Likely to Rebound
Targeting the business segments that will rebound first with a customized strategy versus taking a one-size-fits-all approach will aid your recovery efforts. Look at the unique requirements of each market, their travel challenges, and how your property can address their needs, and build a personalized strategy for connecting with them.
Corporate transient travel returns as companies loosen purse strings and allow employees to travel again. What changes in a recovery is travel spending — companies will manage their travel tighter than they did during boom times. Sales teams need to make sure they are part of mandated corporate travel programs. Additionally, they need to make sure all rate plans are bookable via all channels. It’s important that you know where you fit in the pecking order of their managed programs. Are you the preferred hotel, an overflow hotel, or a last resort hotel?
Transient leisure travel typically returns within a month or two of transient travel. However, this is dictated by the pocketbook of the traveler so it’s possible in this recovery it might be a bit delayed in returning. However, it will return, and it will be led by the drive market. Individuals and families will want to get away; but they are unlikely to hop on a plane. Now is the time to partner with local attractions, your CVB, or other tourism organizations to see what you can do to drive business to your market. Develop packages designed to attract the eye of local leisure travelers.
Group travel will rebound last. It will be led by corporate and government followed by SMERF (Social, Military, Educational, Religious, Fraternal), and association business returning last. Your teams will need to be prepared to launch a sales plan into these categories once transient occupancies hit 35-45% in secondary or tertiary markets and 40-50% in primary or gateway markets. Regardless of which type of market you are in, the recovery, when it comes, will start locally. As a market recovers, meetings are generally booked locally. So, relationships with the local offices around your hotel are paramount. Your team should put together a list of key accounts with offices near you and deepen or establish relationships with them.
Transient business can drive occupancies in most markets only so far. In secondary and tertiary markets that point is typically to the 35-45% mark while for primary markets, it is higher – closer to the 40-50% mark. After that, group business is necessary to drive occupancies higher. Monitoring those occupancies for both your hotel and your local market will help your team understand when it’s time to start selling.
Hotels with the strongest local relationships are the hotels that will recover first. It is the same as every economic downturn in the past 30 years. This one will also have one additional component. Trust! Travelers will need to be able to trust your hotel and its ability to protect them.
Commitment to Building Consumer Confidence
Travel will not come back until your guests have confidence that they will be safe at your hotel. To establish that comfort, you will need to have a strong “Duty of Care” protocol in place. Additionally, this will need to be apparent to all. Now as things are stabilizing, you should be putting your communications plan into place. Additionally, you should be communicating it everywhere. Starting with social, then moving into email and phone campaigns. Your COVID-19 cleanliness and Duty of Care plan should be communicated often and consistently, online (website and OTAs), on property and by every member of your staff.
These initial communications with customers across all segments will be your building blocks for group and meeting sales. They will allow you to develop or deepen relationships with business customers without the hard push of sales. Customers will appreciate the effort of both informing them and having empathy for the times.
Rebound of Group Business Requires Sales “Hunters”
It is important to keep in mind, sales will look different in a recovery economy. Large events won’t return for at least a year (perhaps longer). What we will see are smaller, regional meetings. Sales teams will need to adjust to this and be prepared to sell differently in this smaller economy. It might even make sense to realign your sales offices to reflect this change in focus.
In this market, the day of the hotel RFP order-taker is gone. Now is the time to refocus your hotel sales teams on how to hunt – or go after new business instead of waiting for it to come into their inboxes. The fundamentals of selling and building relationships should start in your local markets and work outward into your drive markets. Your efforts should be focused and strategic, aligned with the logical flow of the segments beginning to travel first.
Recovery has already begun to take form across much of the world. It will be slow and, in many cases, predictable. We know what segments and markets will lead the way. As industry leaders, we need to be ready. Preparing our teams to be proactive while compassionate and establishing a safe environment for staff and guests to return to will be paramount as the industry moves into a slow, steady recovery.
About The Author
Kristi White, Vice President Of Product Management
Kristi White is a recognized expert in her field, she is a frequent speaker on revenue management and distribution at industry conferences and hospitality schools. She was a member of the Board of Directors for the HSMAI Revenue Management Special Interest Group. Kristi has a B.A. in Political Science from Louisiana State University and a Certified Hospitality Sales Professional and Certified Hospitality Supervisor certification from the American Hotel and Lodging Association.