HSMAI’s CSO Executive Roundtable Identifies Industry Trends and Challenges Facing Hotel Sales People
The program was developed to provide senior sales executives access to experts and an opportunity to interact with their peers in an environment where they could feel safe in talking about unique challenges faced by their companies.
Rach said that part of the challenge for salespeople and managers in general is the tendency to go to their comfort level - rather than taking the time to ask, "Why is my company doing that?" What surprised her, said Rach, is that companies have finally realized that the economy has been reset. That doesn't mean that it's time to give in and give up but that it is time to move on. That consensus has been a long time coming as it is four years since the post-recession period began.
"There has been enormous hope of moving past this situation, but it is now being realized that we are past it," said Rach. In a cyclical industry, Rach concluded, it's important to try to break out of the cycle.
Top Trends and Challenges
- Third parties/Intermediaries. More and different types of third parties are claiming commissions. Also, business travelers are using intermediaries - following the leisure segment. If the current trajectory continues, distribution costs will increase to $100 million by 2016 - that amount coming right off the bottom line. This is a "hard ball" issue and the industry needs to be prepared for that. One company represented at the roundtable books 4,800 rooms a day on Expedia alone. It was felt that this was not necessarily a bad thing because it provides that company with new customers and provides pricing leverage with Expedia.
- Managing the proliferation of electronic requests for proposals. With the ease of submitting proposals, it has become difficult to deal with the sheer number of eRFPs and to weed out legitimate proposals.
- Commoditization. With consumers "trained" to shop for discounts, brand loyalty is threatened.
- Dramatic growth in leisure travel. This includes a surge in inbound international business, even from countries with struggling economies.
- Short term bookings. With budgeting uncertainties continuing to prevail, meeting planners are booking closer in and for fewer room nights.
- Millennials may not be as different as many believe as far as their hospitality patterns and preferences. They enjoy reading print magazines, etc. They may spend a little differently. For instance, they may spend on day and night clubs in Las Vegas, rather than on gambling.
- A lack of industry leadership/ finding and keeping talent/exaggeration on resumes. Many mid-level executives left their positions during the recession so there are veterans and novices left. Related to this is providing a value proposition for salespeople finding value in what they offer.
- The need to pay more attention to making meetings appealing. That includes meeting rooms themselves.
- The renewed importance of the North American market.
- The growth of wholesalers reselling rooms contrary to contractual obligations. They are morphing and becoming more OTA-like. An educational effort is needed to counteract this trend.
The Hospitality Sales and Marketing Association International (HSMAI) is committed to growing business for hotels and their partners, and is the industry"s leading advocate for intelligent, sustainable hotel revenue growth. The association provides hotel professionals & their partners with tools, insights, and expertise to fuel sales, inspire marketing, and optimize revenue through programs such as HSMAI ROCET, Adrian Awards, and Revenue Optimization Conference. HSMAI is an individual membership organization comprising more than 7,000 members worldwide, with 40 chapters in the Americas Region. Connect with HSMAI at www.hsmai.org, www.facebook.com/hsmai, www.twitter.com/hsmai and www.youtube.com/hsmai1.
HSMAI is the leading association of sales and marketing professionals in the hospitality industry. With over 7,000 members in 35 countries, HSMAI is a global network of individuals, chapters, businesses and organizations. All industry segments are represented including hotels, resorts, airlines, cruise ships, car rental agencies, restaurants, attractions and theme parks, convention and visitors bureaus, destination management companies and reservation sales organizations.
As the regional chapter for the metropolitan area, HSMAI Greater New York serves a community of over 500 hospitality professionals who are committed to the highest standards of service and ongoing professional development.
Membership is open to anyone in hospitality sales, marketing or management as well as travel and tourism educators and service providers who support the industry. HSMAI continues to lead the industry by providing education and market research to its members.