By Jeff Bzdawka
There has been a tendency to focus on the negative over the past nearly two years, and rightly so. We’ve watched the trends, hoping our industry would bounce back more quickly than it has. As with many industries, we continue to hold our breath as we move into another variant strain of the pandemic, and yet there is still hope. The hospitality industry has demonstrated time and time again its resiliency in the face of adversity, and we will rise up stronger.
If we look back to the beginning of the downturn, it was heartening to see our industry come together. There was a level of comradery, co-opetition (the collaboration between business competitors, in the hope of mutually beneficial results) and mutual concern that brought us all together. Then as restrictions began to lift, we also came together to assure the public that it was OK to travel. We saw the results of these efforts as the leisure market woke up and travelers hit the road to see family and friends once again.
From a group business perspective, 2022 is shaping up to be a “bridge year” as projections tell us we won’t see the full recovery of events until late 2023. Corporate travel took a big hit during the pandemic, but it is making its way back. A report by Deloitte noted, “Corporate travel is expected to pick up significantly in the second half of 2021 but will still sit well below pre-pandemic levels. Total spend in Q4 2021 is projected to reach somewhere between 25%–35% of 2019 levels, although a third of companies say they will likely remain below 25% of 2019 spend at the end of 2021.”
Even though corporate travel will continue to look different for some time, there will be an increase as we head into 2022, with the return of meetings and events likely beginning to escalate towards Q3/Q4. As we move into this bridge year, we can begin to raise our heads and continue the transformation process of re-evaluating, retooling, and redefining our businesses.
Surveys have shown meeting planners optimistically booking group business into 2022. Co-opetition will be key to assuring the corporate meeting market segment that the hotel industry is ready to host them.
Remember one bad experience can erode confidence and comfort in group travel and ultimately could set the industry back. Just as we came together at the beginning of the disruption, we will need to continue to work together to ensure our foundation has stabilized for the growth period ahead. Responsiveness to requests for information is key. For example, one of the biggest concerns expressed by meeting planners is the lack of timely responses to RFPs by hotels. This has resulted in meeting planners casting a wider net, creating more noise in the system, thus compounding the challenge of managing unqualified inbound RFPs.
To ensure your staff is prepared to be responsive now is the time to re-evaluate your hotel sales team. Do you have staff available to answer the phones, evaluate leads and book those meetings? Are your sales teams trained to manage new business as well as service returning customers, beyond the RFP? Do they know what new/different services they can offer to set you ahead of the competition?
The evolution of the hotel sales team
You’ve heard the mantra: everything is different. What has become strikingly clear is the need to re-evaluate everything from back-of-the-house operations to the technology used to create and deliver quality experiences. With a staffing crisis in the industry unlike any we have seen in the past, and one that will likely not go away anytime soon, sales and marketing have taken their share of the hit. Necessary personnel cuts based on hotel closures, and an extended pause on travel and group for most segments and markets throughout 2020 and 2021, meant properties simply didn’t have enough business to support previously sized sales teams.
Today, hoteliers are in the process of pushing the reset button on sales roles. There is more clustering of sales teams, less of a focus on specific markets, and more of a cohesive, blended approach that requires sales teams to become smarter and more focused in the face of shifting industry dynamics.
We have already seen the need to sell differently in today’s environment. Sales managers at every level are taking stock in how to train their teams to sell differently, ensuring sales staff is adept at hunting for new business and has the tools to do it.
As we anticipate the return of group business, the past year has revealed the need to restructure this critical role in hospitality, and it is quickly becoming a top-of-mind priority for management and owners. We know despite the drastic changes in meetings and events, people across industries and geographies are ready to return to face-to-face meetings.
However, with the uncertainty of the pandemic, we also know the hybrid event/meeting is here to stay, at least for a while, and meetings will continue to be smaller. Some hoteliers have incorporated the hybrid meeting model into their technology spend. Moving forward, it is likely meeting planners will view this not as a replacement of the in-person meeting, but rather an enhancement of it, especially pre- and post-events.
That being said, if you aren’t booking for 2022 now you will be behind as your competition ramps up efforts. While variants are still a concern, they are more a speedbump as opposed to the disruption we have seen; however, many sales teams are a fraction of the size they were before the pandemic.
Combining this with the fact that many sales personnel are new to the role, it becomes obvious they will need access to data tools to help them do their job more efficiently. They will need the capability to parse information to better identify the business that is appropriate for their property, such as groups that don’t have restrictions on meetings and are booking corporate events.
Some properties have turned to new market segments they may never have worked with in the past. Others have re-evaluated the importance of RFPs. For instance, some responses require upwards of two weeks or more to build a proposal and often require dedicated sales personnel to manage the process. Then, when all is said and done, it turns out the deal was not a good fit for your property.
What we do know is meetings will continue to grow, and smaller businesses are leading the way towards a return to corporate travel. The road warriors are coming back, markets are reopening and while meetings will look different, with smaller meetings increasing and getting bigger, behemoth meetings getting smaller and more distributed, companies are poised to get back to the business of business–including travel, meetings and eventually industry events.
Co-opetition and partnerships provide a bridge to hospitality industry profitability
The staffing crisis goes beyond housekeeping and sales. There is a need today more than ever before to leverage the efficiency of technology. However, those hotels that invested in proprietary software are rethinking this decision. During the disruption, staffing to directly manage in-house technology proved to be costly and the loss of staff caused operational challenges that would not have occurred using non-proprietary solutions.
We talked about co-opetition from the hotelier perspective but from a technology perspective, software solutions seem to be leading the way. We see more RFPs in the market today about building partnerships and collaboration. While the build vs. buy model was a major consideration when the industry was flush, this is no longer the case. Buying vs. building as well as seamless integration into existing tech stacks is quickly becoming a priority for many executives and owners, with some actively looking to replace these proprietary solutions.
If we take all of this into consideration, partnerships and co-opetition will become key as we move over the bridge to recovery and success. To support this movement, artificial intelligence (AI) and auto-machine learning (AML) continues to gain momentum. We only need to look at our smartphones or the “robots” that populate much of our lives today to understand how data is parsed, disbursed and distributed to guide and enable the consumer.
Every data vendor is working on solutions to advance AML, a trend that has traditionally been very expensive and difficult to achieve. However, technology has evolved to bring these capabilities within reach of our industry. While software developers, engineers and integrators have been hard at work to ensure these tools are available for us, it is only now becoming affordable, and made relevant, for hospitality in recent years.
The key word here is relevant. There are hundreds of AI/AML solutions on the market. Hundreds more that bring the internet of things into the guestroom, voice activating everything from the temperature of the water to shutting off the lights. But hoteliers question if today’s guests are ready for this type of technology? Do they really care? Likely not yet. Perhaps in 2030 when the Gen Z population makes up the bulk of the travel set will this type of technology be the norm vs. the new.
Decision automation: Imagine a world…
As meetings and events return, RFP distribution houses will begin flooding your inboxes with RFPs. Imagine a world where your sales teams could score an RFP using AML that sorts through the myriad requests to define which one is most relevant for your hotel?
Imagine a world where the RFP for groups and events may even become obsolete or at least materially reduced in volume. By using AML what if we could identify opportunities and proactively connect with meeting planners before they even raise an RFP? Or what if we could respond to requirements before the RFP is even generated? Imagine the time you would save and the performance you would achieve with that type of decision automation—now that’s relevant.
The enablement of automated decision-making, and data modeling is a reality. Like it or not, the evolution of voice-activated technology, facial recognition, room automation and back-end robotics are a part of our world. The labor shortage has certainly made it a higher priority in many an executive’s mind today.
It is only a matter of time until we will see more relevant technology become a necessity for the hospitality industry—across all applications from sales and marketing to revenue management and guest services. In the meantime, it’s all about determining what will help make the road to prosperity a little less bumpy and a lot more profitable. Let’s all move forward on the bridge to profitability together and make the survival phase a dot in our rearview mirror.
Jeff Bzdawka is CEO is Knowland, a provider of AI-powered meetings and events data for the hospitality industry.
This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.