Bringing back guest revenues is the number one priority for those working in the hospitality industry right now.
In a world of reduced and shifting demand, hoteliers need to get creative. This means honing in on data to create hypersegmented business mixes, examining macro factors to generate demand and bringing teams together to align strategies and goals.
In the sixth of The Growth Works Networks’ Thoughts on Thursday webinars, Sandro Fonseca, Head of Sales and Revenue at Louvre Hotels Group, and Karla Brooklyn, Global VP, Enterprise at SiteMinder, formerly of Selina and Expedia, discuss some of the creative approaches commercial teams can use to generate demand.
You can watch Sandro and Karla’s presentation below.
After the talk, The Growth Works Network, a global community of mentors and mentees from brands such as IHG, Selina, Sofitel, Laut, Mews and Les Roches, took part in an interesting discussion on the need to align strategies across teams and technology.
Our next webinar will focus on Managing yourself through the industry recovery, on July 9th, covering learning and development plus necessary softer skills like resilience.
Thoughts on Thursday is a weekly discussion between members of The Growth Works Network. Sign up here if you’d like to join the debate next week or participate in our mentoring programme as either a mentor or mentee.
Adapting to Change
As a result of the pandemic, we are witnessing huge shifts in demand.
Sandro kicked off the presentation with some data from Brazil, where the business mix has shifted away from corporate to leisure travellers. Corporate travel is down from 46% of business in 2019 to just 15% in 2020. While tour and travel is up from 15% to 26%. Global markets are reporting similar fluctuations.
He explained that commercial teams need to adapt their strategies in response to these travel trends if they are to bring back occupancy and maintain revenue.
Are your marketing campaigns aimed at the right people? Is your website ready to maximise traffic and conversion from the new travel segments? Are you offering appealing packages and deals that will attract guests without affecting your headline rate?
Government regulations are also important to consider. If your destination requires a period of quarantine for new arrivals, then you could drive lots of demand by finding ways to cater for this with your business.
It’s all about being analytical and strategic with data in order to drive commercial strategy.
Hypersegmented Business Mix
Karla mentioned that some brands have actually been able to maintain occupancy and rates during the pandemic by focussing on the right segments.
She introduced the concept of hypersegmented business mixes. The idea is to break down traditional segments into smaller, more focussed groups.
For example, corporate could be broken down into many different hypersegments, such as oil and gas. While many business travellers have cancelled trips, oil and gas workers still need accommodation, making them a fertile category to target. Do you know what segments are proving resilient in your location?
This is also about long-term sustainability. If you create effective strategies for these hypersegments now, you will be able to rely on their business later down the line during the next economic struggle.
Look Outside of the Industry
In order to adapt your commercial strategy to shifts in demand, Karla stated it is necessary to go beyond traditional data points such as STR reports and OTA insights.
She suggested using a wider lens, especially forward-looking data, to collate business intelligence from macroeconomic forecasters, tourist boards, flight passenger numbers, related industries, etc.
This way you can really get to know the different hypersegments of your customer mix. Why are they travelling? What do they need from you?
You can then use this insight to tailor your marketing, revenue and sales strategies, matching the right message to the right guests.
Creative Demand Generation
With global travel plans disrupted, it’s time to get creative with demand generation. Sandro outlined some of the most important areas to focus on:
- Human touch – Getting back to the core of the hospitality industry, the human touch is so important right now. Use tech to gather data and then use that insight to personalise your sales approach. This could be through prospecting phone calls, webinars or even YouTube Live events.
- New demand – Now is the time to re-evaluate your place in the market. If you run a four-star hotel, are you now able to attract guests from three-star hotels who are willing to pay extra for the peace of mind that you have superior safety measures? Have hotel closures left a gap in the market that your property could benefit from? Could you bring in new F&B revenue by offering food delivery from your kitchen? Take this opportunity to generate new demand.
- Primary Market – The industry is witnessing an uptick in demand for short, local trips. There are also opportunities to turn meeting rooms into office spaces for certain hypersegments. It’s all about using the right strategies to turn this demand into revenue.
- Safety – Communication is key. It’s vital that everyone from operations to sales is clued up on your latest safety measures at this time, so they can give peace of mind to prospective guests.
Tech Enables Personalisation
Winning in sales will take clean, contactless and personalised stays.
Personalisation is an idea that has been thrown around for years, but Karla explained ways that commercial teams have found success through the pandemic by using tech to standardise processes, such as contactless check-in, and reach out to guests to offer personalised experiences.
She alluded to upsell platforms that can help hoteliers communicate with guests pre- during and post-stay. This can help to alleviate anxieties by explaining hygiene procedures, organising transport, customising room necessities, booking dinner reservations, room service, etc.
She stressed that a service-led approach, rather than being overly salesy, will lead to higher revenue.
Collaboration Between Commercial Teams
As the industry bids to bring back guests and revenue, collaboration between commercial teams will be more important than ever.
Karla suggested that efforts could be made to bring sales, marketing and revenue management together, stating that it’s difficult to work together if metrics are unknown and unaligned.
This means getting back to basics. Understand what each team’s processes and functions are. Look at the value teams are driving into each other’s metrics. Finesse your communications plan. Find ways to align metrics across all three teams.
She also touched on the idea of people as product, suggesting that HR and hiring processes also had a massive role in ensuring the right front of house staff are on the ground to greet guests and steer them towards ancillary revenue streams.
Sandro concluded the presentation with a reminder that the pandemic has changed the world of hospitality, meaning hoteliers need to respond with radical changes.
This means using data to really understand who your clients are and creating hypersegments to tailor appropriate commercial strategies. It’s about refocussing on value, service and personalised experiences. And it means bringing commercial teams together to align strategies and achieve success.
Following Sandro and Karla’s presentation, The Growth Works Networks debated the best ways to bring commercial teams together.
Stefan Schreier, Founder and Managing Director of Laut, formerly of Starwood Hotels & Resorts, agreed that collaboration between sales, marketing and revenue management was so important for success. He explained that Starwood aligned plans and goals between these teams 10 years ago and it led to great results.
James Lemon, CEO and Founder of The Growth Works, asked whether smaller brands could fully merge sales, marketing and revenue management teams?
Karla Brooklyn, Global VP, Enterprise at SiteMinder, added that it was important to unify strategies, not just end goals, across teams. She gave the example of a hotel with poor TripAdvisor reviews whose external agency was driving huge amounts of spend through metasearch on TripAdvisor. The traffic obviously didn’t convert well.
Stefan Schreier agreed that alignment was crucial. Forward spend is wasted if teams are not working together on activities.
Gibran Crismatt, Global Sales Manager at Selina, suggested that 2021 hospitality candidates would need a combined skill set of sales, marketing and revenue management in order to perform data-driven decision-making.
Adapting to New Operating Conditions
Martin Kubler, CEO of Strategic Partnership Solutions, formerly of Ramada & Bonnington, argued that our industry has missed the opportunity of the pandemic to look at new ways of working. He said that hospitality has not adequately adapted to remote working, with many businesses still insisting on commercial teams working on-property. He urged hoteliers to move away from an on-property skillset to an expert, remote skillset.
James Lemon, asked whether a shift to remote teams could work against the drive for closer collaboration between commercial strategies?
Stefan Schreier mentioned that strategic work was made more difficult on-property by the constant distractions, such as meetings, supplier calls, property tours, etc.
Andrew Wheal, Director of Mews Systems, formerly with Shangri-la, asked why revenue management and distribution had not embraced attribute-based pricing? Could this be an opportune moment to look at revenue management in a different way? Incremental pricing based on customised stays, such as baths, showers, views, etc offers personalisation for guests and additional revenue for hotels.
Sandro Fonseca, Head of Sales and Revenue at Louvre Hotels Group, agreed that attribute-based pricing was a great idea that could deliver value to guests and drive additional revenue. He said the difficulty was advertising accurately on websites and that he’d found friction from third-party channels and partners who didn’t have the processes to implement these pricing models.
Karla Brooklyn said that partners are using tech to drive efficiencies for hotels and standardise marketing. This allows brands to get their rooms and rates out to lots of different people. The challenge now is how can hoteliers maintain these efficiencies while differentiating their product from other businesses. She acknowledged there is no quick and easy solution at present, but suggested that success would come to hotels that form partnerships focussing on total revenue management, beyond beds and heads. This would take away the reliance on occupancy and shift the focus towards getting people into properties, utilising the space for different revenue streams.
Creative Commercial Strategy
Anuja Rananaware, a Manager at Sofitel, said that she was focussing on local markets, taking the personal approach to prospecting in order to fill up rooms. She said that partnerships with local organisations had unlocked demand from quarantine travellers.
Karla Brooklyn reiterated that creative approaches included analysing external data, such as economic indicators and incoming passenger numbers, in order to influence marketing drives. Corporate travel strategies will depend on different hypersegmented industries and targeting those still active.
Stefan Schreier said that there are lots of tech tools out there that pull data from multiple sources and present it in a single dashboard. On top of that, he recommends teams collaborate with the same online tools so that priorities and activities are open and shared. This makes it much easier to share data across commercial teams to make better decisions and become more agile.
The debate concluded with the idea that collaboration is a way of working. Tech tools exist, we just need to find ways to bring data and teams together to make the best decisions.
The Growth Works Network is hosting another Thoughts on Thursday discussion on July 9th. Sign up here to join our community to broaden your network, gain expert insight and participate in the debate.