In recent years a downturn in group sales has been the cause of our industry’s greatest pain. Massive numbers of meeting rooms, crucial to generating room nights in some of the largest and most marquee properties in our industry, sit empty. Waves of layoffs and hiring freezes have washed over hotels all across North America and beyond. Previously profitable hotels fall into receivership every day. Organizations of all types have been canceling group events at an astounding rate.
According to a study conducted by Smith Travel Research, group occupancy performance dropped more than 18 percent in 2009, with between 5 and 7 million fewer rooms sold during every month. Let me repeat that, five to seven million fewer rooms per month! Call it the AIG affect. Call it a consequence of our times. But the real fact of the matter is a downturn in group sales is the cause of our industry’s greatest pain.
It can also be the answer. Hotel sales teams are hurting for new business. They are desperate to stop the drop in revenue and increase future bookings. Yet often the focus is put almost entirely on re-booking old business. Proactive sales activities becomes an ongoing chore of responding to low probability leads that are mass distributed to dozens of hotels from traditional lead sources or trolling meetings management tools to re-call old clients. What they should be doing is finding new business. Contacting high probability sales leads with a methodical and repeatable process. Hotel sales teams need to embrace proactive sales activities and create a culture of professional business development.
Business Development Defined. In this five-part series, I’ll be discussing the Knowland four-step process for cultivating professional business development in the hospitality industry. What do I mean by a culture of professional business development? A systematic, measurable, and repeatable process to generate group bookings for any hotel or conference center. Business development doesn’t mean waiting for the phone to ring. It means picking up the phone and calling the right meeting planner with the correct sales pitch. It doesn’t mean counting on past bookings to fill your hotel and generate your revPAR. It means creating processes that can be counted on to drive group room nights, even in a weak or recovering economy.
Professional business development occurs every day across dozens of industries; it should be adopted for hotel group sales! With true, professional B-to-B (business-to-business) business development, sales managers are required to actively schedule and contact prospects. They are given high probability sales leads based on past purchasing activity and empowered with competitive value propositions and great sales training. Their activity is tracked in customer relationship management (CRM) or sales force automation (SFA) tools so managers can quickly spot problems and tweak productivity. This allows for the generation of a reliable, measurable and repeatable sales funnel.
True professional business development can be broken down into four simple steps. Within these steps a universe of strategies and plans can be developed for each unique hotel and property. Obviously the strategies for a 1,500-room resort hotel are going to be vastly different than for a limited service airport property. But they all require the same basic methodology and tools. When repeated over time, this four-step process can dramatically increase group sales for any hotel or conference center.
Look for the next in this five-part series on business development, “Step One: Determine your universe of potential business.” In the meantime, learn more by contacting the Knowland Group at 410.860.2270, online at www.KnowlandGroup.com, or on Twitter @KnowlandGroup.
About The Knowland Group
The Knowland Group is a proven innovator, developing intuitive marketing products and services that streamline and support event and group sales in the hospitality industry. The company, headquartered in McLean, VA serves over 2,000 hotel clients and 17,000 users globally. Recently featured on the Inc. Fast 500 List, The Knowland Group is the second fastest growing company in the travel industry. For more information, visit www.KnowlandGroup.com, call 410-860-2270 or follow us on Twitter @knowlandgroup.
Michael K. McKean is the CEO and Director of New Product Development for The Knowland Group. He is a hotel business development and group sales expert and regular columnist for Hotel Business Review and Hotel News Now. Contact him at mmckean@knowlandgroup.com or on Twitter @MikeAtKnowland.
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