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Recession Lessons – Post Recession Hotel Sales & Revenue Management.
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December 2010

As the dust settles and the sun begins to rise again on the hotel industry, it is clear that hotel sales and revenue management will be different than it was in 2007, the last good year before the industry and economy tanked!  This time the differences will be driven by customer behavior in all segments. “The way consumers think about, plan and purchase travel has altered dramatically.”(Peter Yesawich, HotelNewsNow, 11/17/10)

The good news is that according to a Trip advisor survey “…Ninety percent plan to take two or more leisure trips next year—a slight increase on the 89 percent who said they have done so in 2010.”  However, the bad news is that “… travelers named an increase in online travel deals as the best travel development of 2010 (39 percent)” (HotelMarketing.com, 11/10/10) 

Once upon a time, hotel sales people could pump the phones and it was a numbers game.  Now hotel sales people need to be more precise about who their potential high value customers are and how to reach and approach them.  It’s the difference between firing scattershot and hoping a duck flies through or a shotgun approach, with apologies to Sara Palin’s Alaska! 
  
Revenue Managers used to analyze reports, open and close rates based on demand. The RM is now also a revenue generator.  Now the RM also needs to take into consideration the net after commissions and costs on each channel, which channels to push out which rates in order to follow the elusive customers’ preferences for receiving information and rates across multiple channels.   “When seeking information, the most popular sources are brand websites, search engines and travel-related websites. … ” (Epsilon Survey, Hotel News Now, 10/18/10)

Consumer Behavior Changes in Leisure Travel:  Leisure came back in 2010 but as the surveys above indicated, rate trumps location but when in doubt they go to review sites or get recommendations from family or friends. 

  • Brand Web Sites. The issue is how they locate the 'online deals' that they are so fond of?   If brand websites are one the first places they go, how does your web site optimize to appear on the mobile phones that consumers are increasing using to access info?  Remember, a large consumer group uses the iPad or iPhone and Apple doesn't like flash.  If your site uses 'flash' maybe the hotel should have its own mobile app with a reservation engine or direct link to the one on the web site. 
  • Search Engines. Then there is Google - where does the property come up in a destination search and as an online travel site with hotels and rates appearing on maps.    Where does the hotel appear on other search engines and does it make sense to launch a 'pay per click' campaign as most consumers never get past page three if they go that far.
  • Travel Related Web Sites.  Love them or hate them, OTAs are not going away.  Revenue managers now have to worry about SEO on a number of different channels.    Expedia, the object of much industry resentment, is still the Big Dog.  If Google becomes an OTA, i.e., expands Google maps with hotels & rates and begins to offer air through its acquisition of ITA, there will be consolidation.  Priceline has become the 'go to' channel for many consumers to check and see if a better deal can be had than on brand web Sites or other OTAs.
  • Review sites and Recommendations.   Trip Advisor still rules but at least hotels can reply to reviews on the site.  In seeking out recommendations, most consumers are not making  a phone call - they are checking out FaceBook posts, Tweeting their experiences,  asking for feedback on social media and texting their family and friends.  The property's social media presence is an important factor and social media monitoring is critical going forward.
Consumer Behavior Changes in Corporate Travel.  Corporate travel is returning according to all indicators.  Hotels are pushing rates as demand in this sector increases.  However, many companies are demanding free internet access and breakfast, the two most compelling amenities in a hotel selection, as part of the package. Free internet access is “becoming a piñata everyone is swinging at” in negotiations, writes The New York Times. (HotelMarketing.com, 12/02/10)
  • Pricing Models.   IHG is rolling out a dynamic pricing model, a concept that was abandoned at the beginning of the recession.  They are offering a negotiated percentage off of Best Available Rates versus the RFP model of flat rates. Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, predicted that the average corporate hotel rate would rise about 4 percent in 2011, with increases varying greatly. (New York Times, 11/29/10)
  • Trading Down. While corporate demand is increasing this year, there is still pressure to maximize travel budget and one amenity that does that effectively is breakfast.  "To hold down hotel spending in more expensive markets, nearly half of the companies in the United States will probably require some employees to downgrade from full-service to select-service hotels, Mr. (Bjorn) Hanson said." (NYT, 11/29/10)
Consumer Behavior Changes in Groups.  The U.S. Travel Association forecasts a 7% increase in meeting and convention spending this year, to $90.7 billion. That follows a 15% decline.  However, that still means that groups were down by 8% -- hardly the robust increase in demand as seen in the other two segments.  However, anecdotal evidence suggests that groups are booking and not cancelling with the same frequency as they did but they are booking smaller groups with shorter lead times. 

  • Venue Selection.  A survey of meeting planners in an i-Meet webinar indicated that 70% rated social media as very important in venue selection.    How well is your property presented on FaceBook and LinkedIn?  How professional is your personal profile on LinkedIn and on FaceBook? If your customers are checking out the property on social networks they may also be checking out your profile/pages before they return your call. 
  • Rate Negotiations.   Meeting planners are still looking for value (notice I didn't say rate).  By building in value adds and dollarizing them, the planner feels they have gotten a good deal.  Planners know that this rate climate for group business won't last forever and are trying to negotiate deals for future meetings.  
  • The Reliability Factor.  Meeting planners are still a little gun shy about using properties they have not used before.  They are not only checking out the property but asking for referrals and recommendations from other planners.  Hotel sales people can mine their databases not only for repeat business but also to ask for referrals to other planners that they know.   Shot gun versus scatter shot approach!

Hotel sales and revenue managers should be excited with the increases in demand and the opportunity to find prospects where those prospects are finding them!  2011 will be a year that will see new changes in consumer behavior and those that are poised to take advantage of these opportunities will be the big winners!  

The Best of Hotel Sales & Revenue Management Caffeine – the EBook! Just in time for the holidays!  Weekly Shots of Hotel Sales & Revenue Management Caffeine has been delivered to more than 500 Inboxes every week with a mix of sales, revenue management and motivational tips and trends.    Now it’s an eBook.  At $6.99 it is the perfect gift for the sales and revenue management team!  The book is in a PDF format, downloadable into most eReaders.   Click here to get your copy!   Volume discounts for ten or more copies are available – contact Carol Verret at carol@carolverret.com. It will soon be on Amazon, formatted for Kindle.



Carol Verret and Associates Consulting and Training offers training services and consulting in the areas of sales, revenue management and customer service primarily but not exclusively to the hospitality industry. To find out more about the company click on www.carolverret.net. To contact Carol send her an email at carol@carolverret.com or she can be reached by cell phone (303) 618-4065.  Visit www.hotelsalesblog.com.
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Contact:
Carol Verret, Consulting and Training
Carol Verret
5910 S. University #C-18, PMB 374
Greenwood Village, CO 80121
Telephone: (303) 618-4065
carol@carolverret.com
Web Site: http://www.carolverret.com/
Email: carol@carolverret.com
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Also See: The Hotel Sales Office of 2011 – 4 Processes to Fuel Recovery / Carol Verret / October 2010

Habits of Highly Successful Revenue Managers for 2011 Webinar / September 2010

Niches Selling - Locating Lucrative Business that Few Hotels Pursue / August 2010

The Hotel General Manager - The Complexity of Leadership in a 2.0 World / Carol Verret / August 2010

Why Company Team Meetings are Critical This Year / Carol Verret / July 2010

Market Analysis and Sales Office Audit - Look Beyond the Obvious in Turnaround Situations / Carol Verret / June 2010

Dynamic versus Static Hotel Reviews: The Immediacy of Social Network Reviews / Carol Verret / May 2010

2.0 Your Hotel Sales Processes by Market Segment Series – The Corporate Market Webinar April 16 / Carol Verret / April 2010

Marketing to Changes in Consumer Behavior - It's No Longer 'One Size Fits All' / Carol Verret / March 2010

Outrageous! The Cure for the Post Recession Blues! / Carol Verret / March 2010

The Reset Button --- Innovation for Hotel Sales in 2010! / Carol Verret / February 2010

4 Changes in Consumer Behavior & The Revenue Opportunities for Hotels / Carol Verret / January 2010

Recession Lessons:  What Will Drive Hotel Sales & Revenue Management in 2010 / December 2009

4 Post Recession Shifts  in the Hotel Sales Environment; What You Need to Know for Success in 2010 / Carol Verret

The 20% Solution to Increased Market Share and Revenue / Carol Verret / October 2009

Managing Revenue by Market Segment – The Recovery Challenge for Sales and Revenue Managers / Carol Verret / September 2009

The Mindset of the 2010 Business Plan – Survival Mode or Recovery Mode? / Carol Verret / August 2009

The New 'Tipping Points' in the Planners Decision Process - You May be Surprised! / Carol Verret / June 2009

The New Normal – What Does the New Normal Look Like for Hotel Sales and Revenue Management / Carol Verret / May 2009

The New Hotel Sales and Revenue Management Metrics - This Could save Your Job! / Carol Verret / April 2009

Back to Hotel Sales Basics: The Basics Have Changed Big Time!  / Carol verret / March 2009

Stimulate Hotel Revenue -- The Economic Stimulus Package Opportunities / Carol Verret / February 2009

2009 The Game Changer for Innovation in Hotel Sales Processes / Carol Verret / January 2009

Contrarian Strategies for Hotel Sales Departments to Thrive in an Economic Downturn / Carol Verret / December 2008

‘Selling Into’ a Bad Economy – Overcoming Fear and Stealing Share / Carol Verret / October 2008

Habits of Highly Successful Hotel Sales People – Accelerated Sense of Urgency/ Carol Verret / September 2008

The Challenges and Opportunities for Independent and Boutique Hotels in a Difficult Economy / Carol Verret / August 2008

The Science of Hotel Sales* – The Benchmarking Imperative for Success in a Difficult Economy / Carol Verret / July 2008

Marketing & Revenue Management Plan 2009 - Succeeding in a Difficult Year / Carol Verret / July 2008

Tactics to Drive Business in a ‘Not So Hot’ Summer / Carol Verret / May 2008

All Marketers Are Liars - Web 2.0 Strategies for Hotel Sales and Marketing / Carol Verret / April 2008

Contingency Hotel Revenue Management Strategies 'I Will not Cut Prices'/ Carol Verret / March 2008

The Contingency Hotel Sales and Marketing Plan - Hope for the Best, Plan for the Worst / Carol Verret / February 2008

Change is the Buzz – Rebooting Hotel Sales Activity at the Property Level / Carol Verret / January 2008

Habits of Highly Successful Revenue Managers Ramped Up for 2008 / Carol Verret / November 2007

Five Tips to Improving Hotel Customer Service with User Generated Reviews / Carol Verret / October 2007

Habits of Highly Successful Hotel Sales People – A Seismic Shift in 2008! / Carol Verret / September 2007

GMs – How User Generated Review Sites Can Make you a Better Manager! / Carol Verret / September 2007

Web 2.0 and Hotel Sales Strategies for '08; What Are Your Clients Saying About You? / Carol Verret / August 2007

“It’s not the big that eat the small, it’s the fast that eat the slow” -- Five Revenue Management Tactics for Independent Hotels / Carol Verett / June 2007

Developing New Hotel Business Using Client DNA / Carol Verret / May 2007

The Jigsaw Puzzle – The Fit of the Revenue Management and Internet Group Sales Pieces / Carol Verret / April 2007

Client DNA - The Gold Standard for New Business Development / Carol Verret / March 2007

The 'I Hate Cold Calls' Web Cast - The New Paradigm of Sales! / Carol Verret / February 2007

Hate Cold Calls? - Discover the New Paradigm of Hotel Sales / Carol Verret / January 2007

Issues in Hotel Sales Training - Metics for Success / Carol Verret / December 2006

Is the Party Over?; The Challenge of Decreasing Hotel Room Demand / Carol Verret / October 2006

The Habits of Highly Successful Hotel Sales People Ramp Up for 2006! / Carol Verret / September 2006

Identifying the WIIFM Factor – The Essential of Hotel Sales Success / Carol Verret / August 2006

Revenue Management for Hotel GMs – What You Don’t Know Can Jump Up and Bite You!/ Carol Verret / July 2006

Feeding the Revenue Elephant; Hotel Revenue Management / Summer 2006

The "Tipping Point" - Identifying the Touch Points in Hotel Sales / Carol Verret / May 2006

The "Tipping Point" - Touch Points Make a Difference in Customer Service Training / Carol Verret / April 2006

Selling Up! Taking Group Room Revenue to a New Level / Carol Verret / February 2006

Revenue Management 2006; The Risks and Rewards / Carol Verret /January 2006 

Revenue Management and Group Sales - The Partnership Not the Disconnect / Carol Verret / November 2005

Habits of Highly Successful Hotel Sales People / Carol Verret / September 2005

Triple Witching Hour - The Marketing Plan, Revenue Management Strategy and RFPs for '06 / Carol Verret / August 2005

"Smile" is a Learned Behavior - Creating a Culture of Customer Service / Carol Verret / July 2005

Revenue Management Systems -- Considerations for Evaluation / Carol Verret / June 2005

Disconnect -- Aligning the Revenue Management and Sales Strategies / Carol Verret / May 2005

Independent Hotels & Resorts; Ride the Wave or Float with the Tide? / Carol Verret / March 2005

Hospitality Sales Training Companies Reach Across the Competitive Playing Field to Combine Live Seminar Expertise with  the Convenience of the Internet / Carol Verret / January 2005

Revenue Management - The Challenge for Hotel Sales / Carol Verret / January 2005

Hotel Sales Departments -- Issues in Processes and Functionality / Carol Verret / November 2004

The GM'S Role in Revenue Management / Carol Verret / October 2004

Transforming the Hotel Sales Organization; Alignment with the New Realities of Sales / Carol Verret / August 2004

The Revenue Management Strategy - The Pre-Plan Marketing Plan / Carol Verret / July 2004

Hotel Revenue Management this Summer - a Game of Skill, Art and Most of All Nerves / Carol Verett / May 2004

What Do Meeting Planners Want? Hotel Sales Managers Want to Know! / Carol Verret / May 2004

Revenue Management -- The Integration of Revenue Drivers / Carol Verret / March 2004

CYBER SALES -- Hotel Sales in an Internet World is the New Reality / Carol Verret / February 2004

The New Realities of Hotel Sales - Focus on Revenue Generation / Carol Verret / January 2004

Hotel Sales -- Innovation in the Face of Limitations / Carol Verret / November 2003

The Good News & the Bad News; Improving Economy = New Hotel Development / Carol Verret / October 2003

Leadership - General Managers Managing the Sales Process / Carol Verret  / October 2003

When the Crystal Ball is Cloudy; Marketing Plans for 2004 / Carol Verret / July 2003

Partnership of Sales and Technology; Using Tech Tools to "Sell" the Hotels / Carol Verret  / July 2003

Back to the Basics? The Basics of Hotel Sales Have Changed! / May 2003

Creating Sales "HUNTERS": The Skill Sets Required in the New Hotel Sales Environment / April 2003

Heightened Security Requires New Strategies in Hotels Sales / Carol Verret Consulting and Training / Mar 2003

Revenue Recovery - Building The ‘A’ Team in Sales / Carol Verret / January 2003

Contingency Marketing Plan – War In Iraq! / Carol Verret / November 2002

Playing the Rate Game - Positioning -- Positioning -- Positioning! / Carol Verret / October 2002

The Rate Game - Playing to Win / Carol Verret / October 2002

The Challenge of Marketing Independent Boutique Hotels / Carol Verett / August 2002

Hotel Sales in a Limited Service Environment - The Rules Have Changed / Carol Verett / August 2002

The General Manager’s Role in Sales -Chief Marketing Officer of the Hotel / Carol Verret / April 2002

100% Market Share Penetration is Not Good Enough / Carol Verett / January 2002

The Key to REVPAR Recovery –  New Business Development / Carol Verett / December  2001

Trash the 2002 Marketing Plan - And Just Start Over / Carol Verett / September 2001

How to Use Consultants Effectively –  A View From the Other Side  / Carol Verret / August 2001

How Soft Is Your Hotel's Economic Landing?  / Carol Verret / Aprl 2001

The ‘Value Proposition’: Marketing Yourself to Prospective Employees / Carol Verret / January 2001

Generation Y:  Motivating and Training a New Generation of Employees / Carol Verret / November  2000

Why Customer Service Seminars Don't Work / Carol Verret / October 2000

Creating a Culture of Customer Service / Carol Verret Consulting and Training / Sept 2000 

FAT, DUMB AND HAPPY – The Seasonal Boom and  Bust Cycle / Carol Verret / August 2000

Surf's Up - Ride the Wave or Miss the Boat -The Effective Use of Technology in Hotel Sales / Carol Verret / July 2000 

Measuring Effectiveness of  Hotel Sales Departments / Carol Verret / June 2000

Hotel Sales Training - The Need for Immediate Results / Carol Verret/ May 2000



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