It was the perfect storm. After a decade of robust growth, the cracks in the North American hospitality industry were beginning to show. Then the COVID pandemic hit, and with it, an economic downturn that had an impact on travel nine times worse than 9/11. Everything came to a grinding halt.
Without a doubt, the COVID pandemic hit the industry hard, but it wasn’t the only cause of the challenges facing hotels now trying to build sales in an industry shaken to its core. A storm was brewing that would expose what was really going on: leaving sales to chance and not knowing what to do when leads aren’t pouring in.
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The reality is that what worked for salespeople the past 10 years is not going to work for them in the future. The playing field has been leveled.
Difficulty Finding and Keeping Good Salespeople
The hospitality industry is one of the world’s largest employers. It also has an extremely high annual turnover rate: 73.8 percent. Sales and operations are no exception. In a good economy, this meant a labor shortage for those running sales departments in hotels or trying to make their own sales quotas.
Over the decade before 2020, it had become almost impossible to find and keep a good salesperson. For a few dollars more, your star player in sales could be persuaded to join the competition. Finding a replacement could take months, adding a further burden to the already overworked general manager. This was devastating for the sales function.
As a result, sales was forced to take a back seat to operations. Those employed in sales functions were also frustrated. The day-to-day drag of selling rates, dates and space, getting pulled into operations or having to attend too many meetings didn’t contribute to positive employee engagement. And so, the cycle spiraled downward: Salespeople ended up going to the competition or leaving the industry altogether.
All of this exposed a general lack of sales training and rigor in the industry, particularly when it came to hiring and retaining staff—factors that show up when we talk about how most got into the industry in the first place: by accident.
Accidental Salespeople
No one grows up saying they want to become a professional salesperson when they get older. Most salespeople stumble into their sales career. If there’s a labor shortage, they get reassigned, often from operations, because they were good at working at the front desk or as a coordinator and showed some aptitude for building relationships.
Most have a good overview of the market and may have even taken online training with their brand. They know all the features of the hotel, can conduct a property site inspection with a potential client and can even attend a networking event and hand out business cards.
But for accidental salespeople, that’s usually the extent of their training in the sales arena. If you’re trying to be a qualified sales professional, there’s no training or required certification to make sure you understand and know how to do all aspects of your job.
This brings us to another problem when it came to the state of sales: Any salesperson who came into the industry from 2009 to 2019 didn’t have to look too far to find business.
Transactional and Reactive Sales Environment
A strong economy with numerous demand generators for many hotels meant that for years, salespeople were kept busy managing existing accounts and dealing with incoming inquiries from various channels (that is, they were farming). Bookings came in from walk-ins, incoming inquiries and third-party channels, across many market segments.
The hospitality industry can thank a strong economy that delivered these leads—conventions, entertainment, endless sports tournaments, corporate travel, leisure travel, etc. Most hotels also expected their brand to deliver a certain percentage of reservations, so things were humming along for most of the hotel industry between their brand contribution and incoming inquiries.
The other dependency that happened was a hotel’s reliance on online travel agencies for base business. Many hotels would prefer not to work with OTAs because of the high commissions, but in the absence of a proactive sales strategy and base business, OTAs became a major sales channel.
Below the surface, a dangerous trend was unfolding: The sales function wasn’t being properly managed or supported for a time when sales wouldn’t just “happen.” During an economic downtown or an increase in competition such as an oversupply of hotels in your market, those who survive do so because sales is something they have consistently and effectively managed in good times and in bad. They are not starting from scratch—they have experience hunting for new revenue resources. But in 2020, not only did many salespeople not know how to hunt, few (if any) were ever trained in sales fundamentals.
It’s not that they lacked information and data. Most salespeople already had the technology and tools they needed at their disposal, but they were not using the information to better understand the customer. They were not taking the time to do research, and they were not taking the time to understand if they were a fit. On all fronts, it was a mainly a reactive environment, and hotel teams became complacent. When the downturn hit, and hit hard, hotels suddenly faced a reimagined sales environment, one where salespeople could no longer rely on traditional revenue sources and incoming leads.
Key Strategies for Bridging the Sales Gap
With vaccines rolling out and many major corporations lifting travel restrictions, there is a stirring in the industry that is at once exciting and disconcerting. Staffing shortages have increased as many furloughed workers found other positions in the past year. This is quickly becoming the new normal and it will be critical that we accept the fact that previous employees may never return. So how then to fill the staffing gap and reimagine sales to prepare for the recovery?
1. Know what good looks like—hiring, onboarding and retaining sales staff
Today’s sales realities mean that the salesperson you hired 10 years ago is not the same as the salesperson you need today. Whether you are rebuilding your team because of turnover and layoffs or an increase in business, the goal is the same. Building a sales team and not leaving sales to chance means making sure you have the right people in the right seat and have an effective hiring and onboarding program to set them up for success.
2. Everybody is in sales—or at least they should be
Sales is the lifeblood of any organization. No company has ever succeeded without it. Running a hotel with a sales imperative happens when the responsibility for sales and service extends beyond one person or one department. In every sense of the word, sales is an inside job first and extends to those on the front lines and those who do it full time for a living. It has a seat at the same table alongside operations and everyone in the organization understands they own a piece of it. With standards and processes in place for each department, sales remains proactive and consistent, not reactive and only thought about when there is an economic downturn, an increase in competition or a pandemic.
3. Understand how to engage with the modern buyer—stop selling like it’s 1990
Many directors of sales, operations staff, owners and general managers fall under the description of “accidental” salespeople; some are responsible for sales even though it’s not in their job description. Every assignment is different; every brand, franchise, single hotel owner, general manager or team comes with circumstances and resources unique to them. But they all seem to have one thing in common: They are struggling with sales.
Buyers are more informed than ever before and have access to “rates, dates and space” details online. Salespeople need to shift their mindset from having a sales conversation about their product or service to having a business conversation.
Remember, customers are not buying what you are selling—they are buying what your service enables them to do. Staying at a hotel is a means to an end. It’s up to salespeople to understand why they are traveling and what they value. This requires that we stop “smiling and dialing” and spend more time researching a prospect to determine if there is even a fit. It will be a buyer’s market for the next few years and there will be no shortage of salespeople calling for their business. Successful salespeople will be prepared to have relevant business conversations with prospects and rise above all the other noise.
At the end of the day, there’s a lot of work to be done. Disruption such as we have seen this past year will result in a re-evaluation of everything, but especially the way we sell. Are your sales teams retrained, retooled and re-energized to sell in this new environment? Now is the time to build your “A” team and get ready for the recovery to capture your fair share of business.
Tammy Gillis is the CEO of Gillis Sales.