The very last thing owners and asset managers need to be reminded of is how awful the past few months have been in our industry. We are all acutely aware of the impact of COVID-19 with plummeting occupancies, evaporating revenues and hotels furloughing all but essential staff.
However, no one would be in this industry if they were not a “glass-half-full” kind of individual and we now have tangible data and leading indicators that business is returning.
The logical and very fair question as we look to build our revenue streams is, “what do I do with my sales team?” Instead of seeing this as solely a problem, owners, asset managers and executives should look to see the silver lining in this recession. You have the opportunity to re-engineer your sales team from the bottom up to be both more effective and profitable as we weather a challenging 24-plus-month recovery period.
Let’s be honest about our sales teams. Over the past 10 years they may have lost their edge because the amount of business was plentiful, and the inbound request for proposal mechanism allowed us to turn many of the teams from higher-cost hunters to lower-cost farmers (some would say order-takers).
COVID-19 has blown that period of time out of the water and it is unlikely to return in a similar way. The good news is group business is actually occurring—in fact, we’ve seen a 120 percent increase in meetings since the beginning of June. However, zero of these meetings came through inbound RFPs. All of it was sourced and closed by sales teams on a local and direct basis.
There are really two options:
1. Wait for clear signs of recovery and restaff your sales team. (I would contend you’ll be out of business long before that occurs.)
2. Lean into a direct sales model and turn your hunters loose to find the business and build the pipeline for the future as health conditions improve.
The following are what you must find, or acquire, in rebuilding your sales team:
- Do we need as much staff as we had? (Unlikely—you’ll need to re-engineer what they go after and how.)
- Can we re-deploy our teams to be more efficient and are we serving the right segments?
- Do I have the right mix of hunter/farmer skill sets in my team and are they deployed properly?
- Have we neglected business relationships in favor of automated responses to inbound RFP’s?
Occupancies have declined, in many areas by 50 percent or more. Staff has been furloughed. Before you bring back staff, it might be time to evaluate if this is the right decision and not just because occupancies aren’t expected to return fully.
This is about running the office more efficiently. Inbound RFPs have dramatically declined and likely won’t return in full force for a long time to come. As a result, we need to carefully evaluate each member of the team to make sure they can hunt.
Each member of your team will need to be able to generate new business and increase market share from existing business. Additionally, to boost the recovery, they will need to do this while competing on value and not just price.
As occupancies recover and you begin the process of bringing back staff, evaluate each member on his or her ability to fit this requisite. Anyone can respond to an RFP, not everyone can hunt and maintain a book of business.
Over the past 10 years, as your team expanded, it’s possible you had specialized positions (especially at larger hotels). Perhaps you had staff that handled transient only while others were responsible for the same segments or accounts but only handled group.
In these leaner times, this level of specialization may not be financially possible. Your team will be required to handle both sides of the business. This will be another requirement in your decision on who to bring back. Which team members will be your best utility players?
A few more things to consider in this area:
- Segmentation deployment: Keep in mind the market segments that will recover first. After most recessions we see corporate and government recover first and association and larger social, military, education, religious and fraternal business recover last. Not every salesperson can sell to these segments. Make sure you front-load your furlough returns with individuals who can sell into these critical segments and hunt efficiently.
- Catering sales: It might feel like you want to make your salespeople do it all: hunt, book and service. If you are a larger, more complex property, resist this urge. There are two reasons for this. First, you want your hunters hunting, not filling out banquet event orders. Second, good catering managers have the ability to upsell, thus driving more revenue. As you look at your furlough returns, look for catering people who are best at upselling customers.
- Cluster selling: If you are an ownership group, it might make sense to move to a cluster selling environment. Keep your hunters above property with multiple property responsibility. At the property level, keep minimal staff to service events. This will work best when the properties are relatively close geographically so a seller could be on property if a site inspection is needed. But this might allow you to afford stronger talent as you spread salary across multiple properties.
Deployment is a great way to streamline staff and potentially attract better talent. It should be at the top of your list when thinking about what your post-furlough staffing looks like.
As previously mentioned, market segments will bounce back differently. This will need to factor into your recovery strategy. We know corporate and government will return first. Additionally, those first meetings will be smaller in size. Is your hotel equipped to service these segments and these meetings?
As with all things, the devil is in the details. Corporate customers may be less demanding than other customers, but they will be more exacting. Additionally, having the entire hotel booked for a single group is sometimes easier than servicing ten separate meetings at the same time.
Add in the complexity of having to manage social distancing and your on-site teams will need to pay even more attention to the details. Now is the time to manage those processes and understand how that will impact breaks, mealtimes and how your support staff will service public areas. Your sales staff, especially catering professionals, will need to be ringmasters.
The last 10 years have seen the rise of the RFP. In fact, many hotels tailored their sales team to respond to the rising tide, however RFPs have all but dried up and they aren’t likely to return any time soon.
Getting back to the basics of selling is how your hotel will recover. It should be the first point of action when you bring back teams. Identify all of those key accounts and baseline the level of relationship that exists. Your new hunter-based sales team needs to lock-down those relationships and make sure your hotel is top of mind when recovery starts.
Groups are already starting to book. But they are most likely booking with hotels they know and with people they know. After every downturn in the past 20 years, recovery started locally. If you don’t have a relationship with Susie at the “company down the street,” you likely aren’t going to get her small meeting when it comes.
Business as Usual?
It will be a while before we see numbers return to prepandemic status. The work we do today will help determine how quickly business can bounce back, so bringing back your sales leaders and strong team members, or those willing to learn new skills, is critical. However, it might not be the right move to bring back the whole team. Now is the time to be thoughtful on how you might be able to re-imagine your team as a leaner, efficient machine.
At the end of the day, recovery will prevail. It is the hallmark of our industry and our society. We overcome. It is how we adapt and manage the current situation, and respond to our customers, that will define the winners of tomorrow.
Kristi White is the VP of product management at Knowland.