By: David M. Brudney
Member of Laguna Strategic Advisors
“Sales and operations will never get along?” Has the author been living and working on Mars?
I had to double-check the date of Steve DiGioia’s article “Why sales and operations will never get along” posted last week on Hotel-Online. I thought Steve was writing about sales and operation issues back in the ’70s and ’80s, but certainly not today.
To be sure, there was always that disconnect between sales and accounting, sales and the front desk, and yes, sales and catering/F&B during my career in hotel sales that spanned the late ’60s through the early ’80s. And I must admit a mindset did exist in sales back then that putting business on the books was all that mattered.
Sure, there was business booked by sales managers at far too discounted room rates. And yes, business booked for two to three years or more down the road was booked by some who knew they would not be around when the hotel realized that booking was either bogus or actualized room nights were far less than expected.
And it is true also that many sales managers did not give much thought nor much consideration to those departments that serviced groups once they were sold.
Had I not experienced first-hand working in housekeeping for six weeks – – under the watchful eye of GM Harry Mullikin – – I never would have understood the potential problems inherent in committing group early arrivals and late checkouts.
“Sales managers booking events where the cost of servicing is greater than the revenue generated.” I take great issue with the author here because of the better job being done in managing today’s hotel sales operations; specifically, holding sales managers ever so responsible for all bookings, large and small.
DiGioia asks, “What good is booking a small event when the cost of servicing the event is more than the revenue generated from it?”
Here’s a question for DiGioia: have you met any revenue managers lately? The emergence of revenue managers and/or revenue optimizers in our industry has created a powerful tool and process for management to evaluate – – and yes, possibly reject – – each piece of business (group, catering, business travel, government or simply a single room rate to be quoted) before either accepting or giving the sales team the green light to pursue. Pieces of business must meet definite measurement standards today before being allowed.
That’s our industry’s new “checks and balances” system that is working so well today. In most successful hotels the revenue manager has the power to reject a group booking – – no matter how passionate a case might be made by a sales associate – – if that piece might deny the hotel of booking something more profitable over the same dates. And there are times indeed when a large catering event, a small but higher rated tour group, or even an anticipated high business travel or leisure room demand over those same dates works better for the hotel.
“Sales staffs all have one thing in mind, to book as much business as possible.” Not true, especially with those successful properties where sales teams are held accountable for everything they book, and where sales directors, GMs and revenue managers hold the veto power before any new business in placed on the books.
“Then there are the situations where ‘sales’ will discount the price of the event in order to make the sale.” Is the author unfamiliar with the common practice of “selective selling”? There are certain periods of time, certain situations where discounting is allowed and supported by operations, GMs and even owners. Sometimes it is necessary to book a piece of business with discounted room rates over forecasted low occupancy periods, typically hard-to-sell dates, holes in a week, or especially when a late group cancellation has occurred.
And let us not forget that popular practice of “making up” for discounted room rates by enhancement of a group’s total spend. Professional sales managers today know how to use the common restaurant practice of “check building”. If you know cold the highest yielding revenue products and services a hotel offers, you can work on selling that discounted, flat or not-high-enough room rate groups other items: e.g., higher-yielding F&B items at meal events, spa treatments, room amenities and other hotel merchandise, to name just a few.
Smart sales associates know how to use conditions during the discounted room rate negotiating process. One common practice is to agree to the discounts under the condition that the group commit to booking a series of smaller local, regional and/or national events over (your) preferred dates that year or next.
I know for certain from a career as a hospitality sales and marketing advisor these past three decades that there has been a sales department maturation process put in place, one in which all sales associates take a more professional approach to selling, are held more responsible for not just what they attempt to place on the books, but also on the overall quality of the business they spend time pursuing.