This is No time for Hotels to Cut Back on Sales and Marketing
By David M. Brudney, ISHC, February 2009
Never in all of my 44 years in the business have I seen so much anxiety among hoteliers, owners and asset managers. - Not without cause, hotels across the nation have taken draconian steps to deal with the current economic downturn that include layoffs, 35 hour weeks, consolidation of departments, hiring, management salary and bonus freezes, reduction of 401K contributions, closing F&B outlets, and suspension or elimination of existing services and amenities.
Further exacerbating this situation, too many convention and meetings-driven hotels and resorts don’t have enough time to solicit short and long-term business because they are spending too much time renegotiating existing contracts and talking groups out of cancelling.
Hotel sales and marketing should be the very last area for cuts and downsizing. Operators that choose to do so risk facing even greater challenges when the market turns – and we all know that day will come.
Those operators that adopt a policy of “bunker down” and “we’re going to sit this one out” may be very disappointed after the economic recovery to find how badly their property has slipped.
Where will your hotel be positioned in the market place after being M.I.A. throughout the economic downturn? How long will it take you to capture or recapture your fair share? How many new competitors will you be facing? How many good sales people did you let go that by then will be selling hard against you now as competitors?Wouldn’t you rather be one of the hotels that come out of this recession positioned and armed so as to dominate your competition? Taking ownership of the group, business travel and leisure markets? How about occupancy and a.d.r. leader from the get-go?
Tighter, smarter controls, new hotel sales and marketing metrics required
I am not suggesting here that operators should continue on spending the same amount of hotel sales and marketing dollars and in the same manner as business and marketing plans were presented and adopted back in the fall of 2008. On the contrary, current economic times demand that operators must establish tighter and smarter controls along with new hotel sales and marketing metrics enabling operators to monitor progress better and - - as Deloitte’s “2009 Industry Outlook” points out - - to help “justify” marketing, advertising, promotion and sales budgets.
More focus is necessary in optimizing all of your e-marketing tools and upgrading your hotel’s website - - drawing more visitors to a landing page where conversions take place quickly and seamlessly. Make certain, too, that your hotel is properly aligned with those OTAs that can drive room nights and revenue when you need it most. Simultaneously, your direct sales team needs to be deployed correctly where they have the greatest opportunity to interact with clients and prospects most likely to book.All of your electronic and print advertising (yes, selected print remains important), P.R., group and leisure packages, and catering promotion must now be carefully and thoughtfully integrated.
It is no longer a valid nor acceptable excuse in not knowing how much to spend, with whom, where and why, or how best to direct and deploy your sales teams. Sales directors and general managers should have the benefit of corporate oversight in making these decisions. If that’s not available to an operator - - or if you seek a second opinion - - there are plenty of very skilled hotel sales and marketing consultants who would be happy to provide that professional service.
Amongst the naysayers, there’s optimism to be found
We’ve heard far too many gloom and doom projections of late that would have us all believe the recovery will not take place until 2011 or beyond. Let’s keep an open mind here and listen to some of the more positive voices speaking out today.
Fred W. Smith, CEO of Federal Express expects the U.S. economy to improve by late summer or early fall, according to a speech Smith delivered to community leaders at a January Town Hall meeting in Los Angeles.
Former White House Economic Policy Director Todd Buchholz told those attending the ALIS Conference in San Diego last month that “I think we’re going to have an economic recovery just in time for back-to-school sales in September” and that “lodging and hospitality is going to benefit from this upswing as well.”
Smith Travel Research President Mark Lomanno reminded hoteliers during the same ALIS conference to take “some comfort in the fact that we are much better at pricing our product, understanding our guests and making sound decisions than we were during past downturns.”
Laurence Geller, CEO of Strategic Hotel Capital has a lot of faith in Americans “getting bored.” Geller believes that consumers will get frustrated by this fall and that they “won’t stand for this anymore.” He says “the American entrepreneurial spirit will lift society out of the recession. It’s this country’s biggest asset to drag us out of this situation.” Further supporting his position, Geller told a hotel industry gathering in Chicago in December that “this time around the hotel industry is more professional than ever before” and that “that the brands have gotten smarter and the owner relationships are more collaborative.”
Don’t fall back on your heels, don’t sit this one out!
Let’s keep in mind we didn’t get to be a $159 Billion industry without overcoming challenges and barriers in the past. The hotel industry didn’t need a bailout from the federal government and we’re not on the verge of going out of business like GM and Chrysler. We’re not getting any of that $780 billion stimulus package even though a portion of that could have been spent marketing the U.S. as a global destination.This marks the seventh down cycle of my career and I’ve managed to have worked and lived through every one of them.
Don’t fall back on your heels, don’t sit this one out, and don’t cut those hotel sales and marketing budgets. Maintain your presence. Be proactive. Despite the bad economic times, groups will continue to book with those hotels that remain visible, those hotels that are able to show real value and those hotels that demonstrate real knowledge and sensitivity to clients’ needs and challenges.Along with my colleague Neil Salerno, I will be co-presenting a webinar in March titled, “10 Reasons Why Not to Cut Your Hotel Marketing Budget in 2009.” For more details and for a personal invitation, please e-mail me at email@example.com.
© Copyright 2009
David M. Brudney, ISHC, is a veteran hospitality sales and marketing professional concluding his fourth decade of service to the hospitality industry. Brudney advises lodging owners, lenders, asset managers and operators on hotel sales and marketing “best practices” and conducts reviews of hospitality (as well as other industry) sales and marketing operations throughout the U.S. and overseas. The principal of David Brudney & Associates of Carlsbad, CA, a sales and marketing consulting firm specializing in the hospitality industry since 1979, Brudney is a frequent lecturer, instructor and speaker. He is a charter member of International Society of Hospitality Consultants. Previously, Brudney held hospitality sales and marketing positions with Hyatt, Westin and Marriott.
David M. Brudney, ISHC, Principal