Forced to do more with less, hotels squeeze more revenue per employee but at what risk?

New levels of performance are tough to maintain, but hotels can manage productivity as equilibrium returns

The recent trend in strong room revenue generated by fewer staff has boosted annual revenue per employee growth rates to an astonishing 62%, according to CoStar.(1)

This productivity level is likely not sustainable for the long term. So it’s important for hotels to understand what is driving this pressure so they can manage it and be ready for when the industry returns to its equilibrium. The impact is significant, affecting your sales team burnout and turnover, client satisfaction, and ultimately, your hotel revenue and profitability.

How we got here:

ADR strength to drive U.S. RevPAR above 2019 levels.
ADR is expected to increase 16.9% for the year, with resultant RevPAR up 28.1%—approximately 106% of pre-pandemic levels, according to PwC.(2)

Bleisure travel and hotel workspace is on the rise.
Remote work is likely here to stay – at least for the foreseeable future. The last year has seen a substantial number of major employeers commit to long term remote work in the U.S. This means that hospitality venues are being used as make-shift offices for bleisure travelers, as well as locals seeking a change of work environment. According to EHL, this is a great opportunity for hotels to take advantage of the trend and adapt their offering to meet the needs of this emerging segment; ample plug sockets, free high-speed WIFI and great coffee are good starting points.(3)

“New” travelers expect different things from hotel brands. Consumers’ motivations, behaviors, and expectations all shifted during the pandemic— profoundly changing how hotels operate to satisfy their guests, who are increasingly likely to be leisure or bleisure travelers or digital nomads. As a result, technology will be even more critical in a property’s success.
– The Year of the “New” Traveler, AHLA and Accenture

Change in Asset Management Strategy.
Hotel organizations have been embracing an asset-light strategy to brick and mortar more and more. By separating day-to-day management of operations and asset ownership, hospitality companies are free to focus on their core business. This allows more time to serve guests and groups, and optimize processes and technology to improve performance and efficiencies.

Retaining and attracting top talent.
Hospitality has been significantly hurt by The Great Resignation and resulting staff shortage. It’s hard to find experienced hospitality sales people and keep them. Hotel organizations need to work harder than ever before by showcasing career paths, not just jobs. Hotels can build a workforce for the future by communicating the breadth of career opportunities that are available in the industry to current and prospective employees.(4)

So what is the secret to managing the growing pressure on productivity as the industry establishes an equilibrium.

Understand your sales equation: Due to the dynamic nature of hotel sales leaders, it is essential to have a clearly defined plan of attack for your direct sales efforts. Establishing goals in writing will help lay the groundwork for these efforts. Some of these areas tied to your roles are booking goals, solicitation goals, and personal goals. You should always monitor the established goals to ensure effectiveness and productivity.
- Solicitation goals – say you must make 100 calls per month, approximately making 25 calls per week and 5 calls per day to make that goal. Splitting your time up like this will help you achieve these goals.
- Individual revenue or team goals – Splitting out how much business you need to close each week/month/quarter will help you achieve and exceed those goals.
Track your sales successes: From sales training to your team’s sales activities, you’ll need to constantly monitor and find ways to improve those while maintaining motivation. Your organization’s key performance indicators should be aligned with your sales goals. By monitoring KPIs like average ramp time, average deal time, and time spent selling, your team can identify opportunities to maintain seller productivity. It’s also beneficial to regularly review sales metrics dashboards with your reps to understand where the team and their performance stand throughout each quarter.

To dig even deeper into group business strategies and ideas to overcome sales challenges, click here to download your copy of our latest eBook, The 2022 Essential Sales Playbook for Hotels.

Stay current with new sales strategies and coaching: Just like setting goals we discussed above, your teams should also always have training & development goals in place. Did you know that 26% of sellers say their sales training is ineffective, and another 84% say their sales training is forgotten within 3 months? With business activities becoming more digital, we need to evolve our coaching programs. By scrapping the hours-long sessions, try to incorporate 15-20 minute interactive lessons that allow your team to retain knowledge through hands-on training. Your teams will learn firsthand how to engage buyers in simulated buying scenarios by implementing this approach.
Leverage sales productivity tools: The hospitality industry has undergone an unprecedented digital upheaval over the past few years. Sales technology can boast an overwhelming opportunity for managers to increase sales efficiency and effectiveness. Sales enablement solutions help facilitate outbound calls and lead follow-up, while data solutions can streamline new business acquisition and maximize revenue.