Our industry is moving toward a state of normalcy following the “big disruption.” While there may be reports of a potential recession, 2023 will be the year of group meetings and events and business travel will continue to increase. While the hospitality and travel industry is still dealing with issues, such as labor shortages, it is resilient.
Recovery efforts are still in full force, particularly as it relates to restoring lost revenue. In light of that, it is critical to be vigilant in group sales strategies. These include diversification of your base, pivoting your sales plans and providing sales teams with the proper technology and data insights they need to be successful.
Diversifying Your Base
Every hotel has a specific mix of business. It likely shifts seasonally, but there is a distinct mix that defines the business of a hotel. This mix likely changed as a result of the pandemic—now the question is whether or not that change is relatively temporary or permanent.
Chances are it’s mostly permanent. Certain segments—such as training/education, pharmaceutical/biotechnology, technology, and financial/banking—may never fully recover. If your hotel is or was heavily dependent on these segments (both from a group and a transient perspective), finding other sources of business is imperative.
This will hold true should the economy take a downturn. It will be more important than ever to know who is booking your hotel, your competitive set, your market and even alternate destinations your market competes against.
Business intelligence tools that help you understand what’s happening now and how that has shifted over time are paramount to developing a new business base and staying ahead of the curve. Developing relationships with organizations as they begin to change behavior is vastly more productive than trying to unseat a preferred vendor after buying patterns are established. Additionally, balancing your mix so no single industry segment dominates your business means you can more easily recover if the next downturn heavily impacts a particular segment.
Creating a Plan to Pivot
If you use your business intelligence tools effectively, you will see the trends before they fully develop. This means you will have the ability to adapt your business plan nimbly. However, this won’t happen if you don’t have a plan in place for how to pivot. Or, more importantly, recognize when you need to pivot.
To do this effectively, you need a team of individuals at your hotel who work together to read the tea leaves. At a micro level, the team needs to understand what accounts are booking your hotel from a group and business travel perspective. This should not be limited solely to those accounts you know. This should encompass all accounts—small, medium and large.
For each of these accounts, the team needs to know what the production looked like in the past and how it is today. Additionally, the team needs to understand the same metrics at a macro level (within your comp set and your market).
Using Data Analytics Tactics to Increase Group Sales Wins
Your sales team should be able to determine at the individual account level if your hotel is going up or down in production. Whether the comp set is going up or down and if the market is going up or down. Each account needs to have a defined category based on these metrics. These categories are not about their importance to you but your importance to them.
- Trusted Partner: This means your hotel captures the lion’s share of its business in the market. You are their go-to hotel.
- Solid Second: Your hotel is secondary to their business. Most likely, they use you when their Trusted Partner is unavailable.
- Last Resort: Your hotel is used whenever no one else is available.
You should score each account separately for group and business travel and then create a combined score for total customer value.
Next, you need to score each account based on its importance to your business. Then compare those scores to see where your teams should focus time. Do you have sellers farming accounts that consider you a Last Resort? Are you ignoring those accounts that consider you a Trusted Partner? Are there accounts you weren’t even aware are using you?
Additionally, you need to look at those accounts booking into your comp set and perhaps your market but not using your hotel. Score each of these accounts on the likelihood of moving them to your property.
- Quick Wins: Use for accounts buying properties exactly like yours that don’t show a significant preference for a single property.
- Target Range: Use for accounts with less defined specific buying behaviors. For example, an account that uses multiple hotels with no brand or chain scale preference.
- Major Project: Use for accounts with a defined preference that matches your property. As an example, an account that uses a single property in a chain scale comparable to yours with a defined brand preference different from yours.
- Low Return: Use for accounts with a defined preference that doesn’t match your property. As an example, an account that uses a single property in a chain scale that is more than two removed from your chain scale and also belongs to a different brand.
As part of your comp set process, it’s important to balance your time between Quick Wins and Target Range. For each account (in both buckets), you need an action plan to target them, and a definition of what success looks like. This will help guarantee early and sustained success.
These exercises should be repeated at least quarterly, and your teams should adjust their actions to reflect changes in these scores. This will allow you to see shifts in behavior while it’s early enough to respond versus react to the changes.
Rise of the Sales Generalist
The trend for 2023 seems to be returning to full staffing. This is excellent news for our industry, your hotels and meeting planners. However, have you given thought to who you will be hiring back? Is the plan to duplicate what you had in 2019 and before? If so, you are likely setting yourself up for failure.
Before the pandemic, many hotels had single-market segment sellers. This resulted in specialists who often weren’t productive in other segments. Each of your sellers must be cross-functional and adept at multiple verticals. If not, as you pivot your efforts to changes brought about by potential downturns, you will find it difficult to adjust.
Taking this one step further, as you staff up, it’s vital to move away from the book and cook strategy employed during the recovery. It’s time to have sellers who hunt for and close business and service people who bring it to fruition. Your sellers should be solely focused on filling the pipeline while your servicers handle the details and potentially farm the account for additional opportunities.
Retain the Lessons Learned
One of the most valuable lessons from the pandemic is that we don’t have to discount even in the darkest of hours. This was the first time in the history of our industry where rate recovered well ahead of occupancy. It’s actually one of the reasons many hotels survived.
Should a downturn happen, let’s not take a step back and discount willy-nilly. Maintaining our rates and our rate integrity will serve two purposes. One, it will preserve revenues even if occupancies stall where they are now. Two, it will make the rebound even easier if we don’t have to recover the rate loss due to discounting.
As your hotel continues to rebuild its revenue, a little effort now to ensure your hotel is diversified and ready to pivot means you can weather any oncoming storm more effectively and be prepared to soar as recovery surges us forward.
Kristi White is chief product officer at Knowland.