The pandemic has changed the dynamics of marketing and sales, distribution, franchising, SEO tactics and social media and how productive are these historical channels in an age where hotels may not see any signs of recovery until 2022 and 2023. “CBRE forecasts that demand for the US hospitality industry will return to pre-pandemic levels towards the end of 2022. The team at Luxury Hotel Advisors is taking a hard look at these expenses to make sure efforts are refocused based on the changes we see in demand.
GROUP HOTELS WILL HAVE THE MOST DIFFICULT RECOVERY
Hotels and resorts catering primarily to the group and events market will be further affected as meeting planners will be careful to mitigate risks as a result of large gatherings, events despite the CDC rulings.” It’s time to dissect all our marketing and distribution costs and assess your costs on a per room basis and develop a fresh approach to market directly to the consumer.
Here is an example:
COST BASIS TO DEVELOP GROUP BUSINESS
With 6 to 12 months’ lead-time and with no sign of recovery until 2022 can you really justify three Group Sales Managers, a Catering DOS as well as a Director of Marketing for a 200-room property. That alone could be $700,000 TO $800,000 in payroll including benefits.
What percentage of your sales team efforts is dedicated in developing group business versus servicing requests from CVent, Helms Briscoe, Conference Direct, ALHI and others. 20%, 40%, 60%? Can a sales coordinator be just as effective in booking and servicing that business? Isn’t it time for a reality check?
MEETING PLANNERS DO NOT REALLY WANT TO TALK TO YOU!
Most meeting planners prefer working directly with a booking source or a travel agent in selecting a meeting site. It saves them time and multiple calls from all the hotels. In this scenario, the hotel will have to compensate the booking agent at 5%, the meeting planner or travel agent another 10% of room sales and possibly process the bill through a credit card that is another 3%. And how much SELLING actually took place?
OUR RECENT FINDINGS
We recently audited a property that hosted 80 meetings per year, we found that as many as 60% of all group bookings were generated by a third party or booking agent and not through the on-property sales team directly.
I am not implying that we should eliminate the active sales role from a group hotel property, but we need to zero in and determine the value that each sales executive brings to the bottom line and at what cost. Hotels need to leverage technology to be more efficient and at the same time understand what true value a Sales Manager can bring to the table and hold them accountable for that contribution.
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