Industry Update
Opinion Article25 August 2020

The Profession Of Hotel Sales Is At A Fork In The Road: Which Path Will You Follow?

By Doug Kennedy, President of the Kennedy Training Network

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Certainly, the COVID-19 pandemic has impacted virtually every type of industry to one degree or another, and in different ways. While some industries such as the tech sector flourish, others such as retail, restaurant, hotel, and tourism languish. Yet one thing the pandemic economy has done for virtually all industries is to accelerate the pace of changes long underway. There are so many examples. Telemedicine has been around for a decade now, yet only now are patients and providers embracing it on a large scale. Distance learning became the latest thing in education over two decades ago, yet only now is it being deployed on a wide scale in the public school systems. Shopping malls and big-box retail stores were slowly becoming dinosaurs, now even the upscale, legacy chains are announcing bankruptcies and store closures. Likewise, the gentle breezes of change blowing on the profession of hotel sales have turned to gale force winds.

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Until recently, change happened slowly in hotel sales, and certainly much more slowly than other hotel professions such as revenue management and distribution marketing. The emergence of revenue management technology to assist with tracking demand, pace, and predictive pricing, coupled with the proliferation of OTA's and other electronic distribution channels, pushed tidal waves through the transient and business travel segments. Meantime, the "org chart" and business models most used for hotel group, event, and wedding sales evolved much more slowly. Sure, there were changes; hotels used systems such as Delphi to block meeting space (instead of the "diary"), leads arrived via platforms vs. phone calls, and a few brands moved to regional or centralized sales offices. But compared to how transient distribution changed, group and event sales models were largely the same.

Behind the scenes though, technology for distributing meeting and event space has been advancing, despite that most hotel companies clung on to legacy software systems and thus built their business models around them.

Now, as we hear every week from participants in KTN's virtual sales training and coaching sessions, group, wedding and event demand has slowed to a trickle, or in some cities, ground to a halt with hotel closures. Visionary hotel leaders are using the downtime for a long-overdue reevaluation of their sales tech. They are listening to the newer, more innovative tech vendors offering next-gen hotel sales and catering software platforms that enable 24/7 bookings online, with real-time availability.

Certainly, the self-service style online booking of meetings will not work for major meetings and conferences. Yet automation works extremely well for smaller events, especially those booked with little lead time, and most of the meetings being booked for the foreseeable future are smaller meetings booked at the last minute. Automation of the booking of small meetings and events will have the biggest impact on the focused and upper-midscale markets, which represents the largest segment of the industry by property count, so this is truly going to be a profound change to the profession.

The pace of change is also accelerating for hotel sales professionals who book even the largest groups and events. The evolution of hotel tech is making it increasingly feasible for management companies, brands, and operators of multiple properties to centralize hotel sales operations, leaving only the remaining detailing work that has not yet been automated for on-site operations staff.

This is not just a theory or hunch that I'm having about change. Based on conversations I've had with my contacts at top brands and management companies in the past few months, these are changes that are already in the works. In fact, here's a link to a very recent post from HSMAI Insights in which members of its Sales Advisory Board share similar thoughts: Link.

So, what does the future of the profession of hotel sales look like? For those who sit back and wait for everything to go back to being the way it was, it looks bleak. While there is sure to be a strong rebound when pent-up demand breaks free, it is going to be a long wait. In the interim, as hotel group and event sales distribution is undergoing these revolutionary changes, salespeople who sat back and enjoyed the fruits of an up-market while riding an 11-year wave of economic expansion will find themselves being left behind in the emerging new era. Hotel salespeople with an "order-taking" mentality will soon be looking for work elsewhere.

Alternatively, those who take the proverbial road less traveled will recognize that now always, massive disruption creates historic opportunities. They will embrace a new vision of themselves as "sales hunters," who sniff-out, track down, and harvest new sources of business to feed the pipeline of hungry hotels, especially for gap dates. Surely it will not be easy. The old sources of demand have mostly dried up. Yesterday's corporate traveler who worked as a regional sales representative has been displaced by a contracted healthcare worker or perhaps even a gig worker who is in-house for a long-term stay. One might win 100% of the business from yesterday's top BT accounts, only to have that add up to less than a half-dozen room nights.

Yet sales hunters will be checking for the company names of last night's guests, chatting up guests in the lobby, and looking at license plates in the parking lot. They will seek out business that was displaced from other hotels, possibly those in other cities, from higher (or lower) tier properties, rather than going after their "usual suspects."

They will recognize that the previous "drivers" in an up-market, such as brand loyalty and bonus points, may not be the biggest drivers of new demand. They will upskill their knowledge of profit optimization, and challenge RM's and GM's to think beyond ADR and RevPAR and look instead at the value of fully committed demand, even if at a slightly lower contracted rate.

For those who focus on their long-game, their hotel sales careers will move farther and faster down the path less traveled. The skill sets that allow them to survive in the COVID-19 era will set them up to thrive in the future. Those who follow their same old well-worn path will find the road narrowing into a bottleneck that few will get through while most fall off the road and into another career.

Doug Kennedy

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