Optimize Group Business by Bridging the Gap Between Revenue Managers and Sales
Experts in hospitality are forecasting growth in most major markets over the next few years. Even as hotels reinvest in their properties and bring more supply online, occupancy is staying healthy in most major markets. That's in part attributed to growing demand for meetings and events. These days sales teams don't have to do as much hunting, but that means they have to be smarter about the way they work with high value clients.
Experts in hospitality are forecasting growth in most major markets over the next few years. Even as hotels reinvest in their properties and bring more supply online, occupancy is staying healthy in most major markets. That's in part attributed to growing demand for meetings and events. These days sales teams don't have to do as much hunting, but that means they have to be smarter about the way they work with high value clients.
One way to make any organization more efficient is to improve communication. For hoteliers, the best way to start is by empowering sales reps to start thinking more like revenue managers, who are critical to optimizing profitability. When it comes to guest rooms, most revenue managers are more than capable of monitoring availability and adjusting room-rates from a tidy spreadsheet. But what about function space?
The challenge with group sales, is that closing even a single group deal has a ripple effect across your hotel. Beyond rates and availability of the function space itself, your sales team now has to determine if you have available staff for the event, that you can provide catering, and that you have the necessary inventory for the room set. All that and we still haven't factored in room blocks and occupancy. Today, your sales team is probably smart enough to work around the hurdles that keep contracts from being signed. But how can you get ahead of those hurdles especially when negotiating with higher value clients?
Data is Your Diplomat
Transparency could not be more important, especially at larger organizations. Larger sales teams will have different individuals managing corporate accounts, events, and guest-room sales. Without proper coordination, they could be preventing one another from closing higher value deals down the line.
For instance, it might sound like great news to hear that you've locked down a massive group, and room blocks for next fall. However if you do end up fully booked, and that fall turns out to be a record breaking season in your destination, you have no flexibility on pricing. Which leaves higher yields on guest rooms to competitors in the area. That's a rookie mistake if you ask any seasoned revenue manager.
To avoid a situation such as that, revenue managers typically know exactly when to keep rooms in reserve. That's the kind of information that should make its way down the chain to every sales contributor. Conversely, sales can keep revenue managers accountable if they're relying too heavily on group business deals. It might seem natural to push room rates in a period of +80% occupancy, but remember there's added volatility when those rooms are tied up in groups.
Hotel sales managers should be held responsible to bring data transparency across the business, to help sales stay on target. How educated is a typical sales rep on the criteria you look for in high value clients? We know that lead time, group size, and meeting type all factor in. Revenue managers almost always have a good grasp on the channel mix. Try to bring that level of knowledge and granularity to your sales staff. A simple way to start is by having revenue managers provide a weekly metrics update and guidance to the team. Revenue managers don't always occupy senior leadership roles, but their unique expertise can be highly influential.
It might seem like a manual way to get started, but soon we'll see technology come online that brings automated recommendations to the way sales teams approach groups. Imagine if the event space at your property could be booked online. It would bring the kind of predictability and flexibility that we're accustomed to with guest rooms to event and banquet sales. In fact, some hoteliers are already doing that today.
For more ways to optimize group sales. Download Social Tables group sales playbook for 2017 and see how group business will drive revenue growth in hospitality over the next few years. Go in depth with ten methods, tools, and partnerships that can help your property stay laser-focused on the highest value group deals.