This post is by Dave Lutz, managing director of Velvet Chainsaw Consulting.
I spent most of my career running one of the largest site selection companies in the country. I learned a ton about group sales and how customers buy.
I had the privilege to work with some of the best and most influential hotel sales professionals in the meeting and convention business. I am saddened to see companies send these sales folks careers off to pasture in favor of a new sales reorganization plan.
Group Sales Going Transactional
For years, many have claimed that the buying and selling of group business is a relationship sale. It is highly consultative, not transactional.
Now, there are several trends that are challenging that mindset:
1. More small meetings and thus more transactions.
2. Shorter booking windows.
3. Buyers’ adoption of procurement purchasing practices.
4. Buyers outsourcing site selection.
5. Consolidation of flags with more big chains managing multiple brands.
6. Hotels sold their souls to the OTA’s (Online Travel Agencies).
As these realities collide, some chains, led by Marriott, are reacting by reorganizing their on-property sales force into regional clusters. According to this Meetings & Conventions article (and my grapevine) Starwood is going down a similar path.
No longer does the hotel maintain a sufficient on-property sales team. Customer opportunities are now sold through regional sales offices that amount to nothing more than a lead processing center.
Regional clusters handle transactional responses. They sell across all company brands. They will have more inventory to improve their chances. Basically, it’s a model of throwing more RFP’s against the wall to see what sticks.
The Results And Tough Questions
Some hotels have cut on-property sales personnel by as much as 75%. This is a knee jerk to an overwhelming increase in RFP volume. I believe the end result will be: dramatically lowered close ratios.
• Are these chains heading in the right direction?
• Will personnel changes and lay-offs send some of these chains best and most loyal talent to the competition or to site selection firms?
• Will their relationships follow them?
What Sticks In My Craw
Here’s what really bothers me.
Good on-property sales people are often inspirational leaders for hotel managers and staff. They serve as the property’s ambassadors. Clients benefit by having a trusted resource that can pull rabbits out of a hat. Who will fill this void? Convention Services and Catering professionals? Are hotel chains and owners making plans for that?
Less Creativity, More Laziness
If juggling other groups or leg work is required to make a piece of business work, regional sales folks are going to quickly jump to more available options in their portfolio. There is less fighting for what is in the best interest of the client or hotel owner.
Less empowered staff decreases the ability to deliver quick answers regarding contractual issues, negotiations or property specific questions. This leads to increased response time for special requests. Business will go to the competition that is faster, more nimble and better at addressing these issues.
Squeaky Wheels And Selling Ugly Babies
If I own a 250-room suburban hotel (ugly baby), I may question who is selling and fighting for me on a daily basis. With fragmented hotel ownership, owner asset managers do a better job of making chains accountable. Expect an increase in squeaky wheels.
Total Account Management To Disintermediate
I think one of the main goals of these reorgs is to build closer relationships with the client’s organizations. Each chain wants to increase market share. They want to promote the benefits of direct bookings versus the use of third party site selection firms. In theory, it sounds like a good plan…if the relationships extend to the property level. And that’s a big if.
Factory Or Store Front?
Proponents of these reorgs claim that you don’t put sales people in the factory. When did hotels become factories? They’re store fronts! Stores without sales professionals must have a product that sells itself or offers deals that you can’t get elsewhere.
Time Will Tell
Some seasoned planners aren’t crazy about these changes. It’s a bit too early to tell if they will take their business to hotels where they have more trusted relationships.
Whether the regional sales cluster reorgs work or not will take time. In an up-market, the initial results may look good. In the long run, I think it’s going to mean even less brand loyalty.
How do you feel about the new regional sales clusters? Why do you think it will or won’t work successfully?