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Bed and Breakfast Industry Trends |
Wednesday January 7th, 2009 |
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Selling Into a Bad Economy - Overcoming Fear and Stealing Share - By Carol Verret |
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Tough times require creative solutions not just business as usual! Not only are hotels being buffeted by the economy but also by the new competitive hotels have come online and/or are coming online in the near future. Make no mistake, there will be winners and losers in this environment - some hotels that will prosper and those that will capitulate! |
The Business Travel Coalition recently conducted a survey of corporate travel managers. 'The Business Travel Coalition, which represents corporate travel buyers and suppliers here and internationally, surveyed travel managers last week and found a sense of real urgency. More than a quarter of nearly 200 travel managers surveyed said that their companies had recently started emergency cutbacks, on top of the cuts already in place this year.' (New York Times, October 20, 2008) The good news in this is that 75% of travel planners were not in panic mode but, as we all know, are watching those travel dollars.
However, if we look at the reports there are hopeful signs. In an excellent report, Global Insight reported that 'Full year 2008 domestic travel is now expected to reach only 1.987 billion Person-Trips, down 0.6% over 2007. Leisure travel, about 76% of total, will register 1.5 billion Person-Trips, a 0.5% increase over last year. Business travel (is) expecting (a) decline of 3.8%...' The report went on to say 'Relief has already begun, however, in the form of moderating oil prices and average daily room rates. This favorable trend will begin to accelerate beginning in the second quarter of 2009' and '...leisure will begin to recover in the second half of the year.' (Hotel Resource, October 27, 2008)
This report indicates that leisure travel actually increased by .5% in 2008 and business travel will post a decline of 3.8%. There are hotels that benefited from the increase in leisure and those that are able to maintain or increase share of business travel despite a decrease. A 3.8% decrease in corporate travel is challenging but certainly not a disaster!
When every other hotel around you is slashing budgets, the one budget that can be maximized is the efficiency of the sales department and marketing dollars redirected to more cost efficient channels. Here are five things you can do to 'sell into' the recession:
Overcome Fear and Panic
It is often said that stock market declines are being driven by fear, panic and a lack of confidence. If you buy into the fear and panic syndrome, you are accepting that business will decline and subconsciously that will seep into the sales and marketing effort. Those hotels that look at the research look for the opportunities and think 'out of the box' (I hate that term, how about 'out of the circle). They will develop cost effective, innovative ways to reach out to the real people and companies within those opportunities.
Rediscover the Lost Art of Prospecting
There are those companies that publish lists of web sites for internet prospecting. These are okay but of no value unless you have a very clear idea of what kinds of clients you are looking for. Foraging through market specific web sites without a DNA profile of potential clients likely to be in a position to give the hotel business is a waste of precious time. Focus on those stock market sectors least affected by the economy for business travel - put marketing and sales efforts in place to take advantage of the 'pent up demand' in leisure summer travel.
Internet Platforms for both Leisure and Business
Pull way back if not eliminate expensive hard copy print advertising in favor of internet based strategies. How do you buy things, how do you research your options for a purchase? Consumer buying behavior has changed and this also applies to the business and leisure consumer - accessing information on the web. Take calculated risks - try platforms that you haven't tried before or increase your presence on those that you are already on. Some of these will represent 'electronic billboards' that consumers will use for research prior to making direct contact.
Rethink Sales Office Processes to Become Customer Centric
Many current sales office processes were developed when demand was robust and designed for the convenience of the operation not the customer. Case Study: A meeting planner tried for 8 days to book a small last minute meeting in Las Vegas. After a series of unreturned phone calls and the inability of seven sales departments to confirm rates and meeting space on one call, she finally booked with the 8th hotel -- the only one that was able to confirm meeting space, guest rooms and room rates on the first call. It's now all about the customer and their convenience. How customer centric are your sales office processes?
Sharpen Skill Sets
Many potentially great sales people entered the industry in the last four to five years and have spent those years managing demand. Many experienced sales people have great sales skills but haven't had to use them for a while. When a potential customer is on the phone, sales people need to have the skill sets to be able to check availability, instill confidence, qualify and close them on the first call. This also takes a willingness on the part of the operation to give sales the rate parameters and the confidence to trust them to book 'good' business. Tom Peters in his book on Leadership estimated that the typical American company invests only 26 hours per year per employee on training - that is probably an overestimate in the hotel industry. Would Tiger Woods be Tiger on only 26 hours a year of training?
Those hotels and hotel companies the 'sell into' the current economic downturn will steal share from those hotels that don't and succeed in this economy. 'Selling into' this economy means not only doing more of what you're already doing but actively drilling into the opportunities that present themselves in the trends. For example, continuing to try and wring business from the Financial Services sector would not be logical but starting to drill down into the upbeat HealthCare stock market sector is 'selling into' this economy based on the opportunity. It will require overcoming the fear and natural instinct to 'hunker down' - that is exactly the wrong reaction to become a winner in this economy and emerge stronger than prior to this economic challenge!
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.com. 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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