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Restoring Group & Incentive Markets in Today’s Business Environment.


Restoring Group and Incentive Fortunes in Today’s Business Environment.

For a little over four years we have watched many of our hotel and DMC partners focus on cost-cutting activities across their organizations in order to hold on to cash in uncertain times.  Cost cutting became the “new” old strategy used to reach their goals.


Since most General Managers and executives had not lived a recession of this magnitude, they quickly searched through their memory banks and latched onto a familiar strategy: cutting wherever possible.  Cut marketing, sales people, support staff and even c-level suite positions.  Marketing and sales staff worked in a permanent “triage” mode handling a multitude of tasks with as much speed and efficiency humanly possible.  This left teams in complete disarray and now executives must consider the Post Economic Stress Disorder (PESD) this recession and job cuts will cost them when they inevitably transition to a sales strategy for growth.


With this apparent shift from cost cutting to growth, the main question is whether executives should dive back into the familiar sales and marketing efforts in a new era, or do they reinvent the entire sales and marketing process.  Since no substantial thought was used to solve the economic woes of companies in 2008, I am fearful that no real brainpower will be used to reevaluate the sales process and marketing strategy for the years to come.  Some say “if it isn’t broke, don’t fix it”, but it is broken and it is time to fix it.


That being said, I offer a few quick observations for hospitality leaders to consider before they move forward on growth plans and strategies.


  1. Consider the strength and weakness of your team. We must consider the traumatic experiences of living a long term recession battle will affect your growth plans.  An exhausted sales and marketing team characterized by little motivation, shock, anger, nervousness, fear, and even guilt, will negatively impact your plans for growth.


What’s the solution?  It’s time to rally your troops.  These crisis years have taken their toll on your team and they may not be ready to fight in the new battle ahead.  You must eliminate their nervousness, their guilt from having remained while their colleagues were let go, and remove their anxiety.  How?  Reinstate a training program, organize an effective retreat, involve them in change and reward them (using simple rewards) for their conscious efforts.


It’s also imperative to reevaluate the way you lead.  A good exercise is to make believe that you have just been hired to do your job.  What would you do differently?  Now go ahead and do it.  Past methods will not produce great results in the years to come so forget them and start anew.


2.  Break away from past year’s blueprints.  Yes, in order for you to transition from cutting costs to growth strategies you must reinvent the way you and your teams operate.  Start with candid conversations about what you have learned about your customers, your service and your real shortfalls as a hotel or DMC.


Your first plans should not be market plans, but plans on how to regain your footing with the new customer sentiment.  Don’t forget, you have gone through changes and so have your customers.


3.  Reevaluate your competitors.  Yes, you knew them, but lost track of them over these years while you were busy cutting costs.  Take a good look at their entire sales and marketing structure.  Are they less competitive because of a reduced staff?  Did they not cut back staffing at all?  Is their service worse or is it now better than yours?  Has their price point changed?


Take a careful look at your market share and see which competitor has walked out of this recent war with the most amounts of victories.  Understand your new situation before you start charting your course.


4.  Interview your clients.  Yes, it has been some time since you have engaged your clients and asked them what they would change about your hotel, its amenities and its service.  Know that customers have moved up and down the star rating line so analyze which ones moved from a 5 star property to your 4 star resort but without changing their deluxe expectations.


Consider changes in customer migration patterns as they moved around the U.S. searching for new jobs, relocating to affordable areas, etc.  Check the gender of your current consumer base. At one of our client properties we pulled a full data feed from customer check ins and discovered an increase in women as business travelers of 12% making them the dominant guest while all marketing plans still catered to men.  It is not time to step back, but to step forward with clarity.


5.  Plan differently.  Most plans are created in sync with the hotel’s fiscal year or calendar year to better understand the year’s budgetary needs.  This year you will need to develop an annual budget, but want short term gains from this long term planning.  It isn’t going to happen unless you change the way you create plans.


We suggest you not write a plan.  Write everything that your team believes will impact sales throughout the year on a long list.  Put these activities into a “backlog” of items.  Now that all items are listed, make sure that costs are associated with each activity along with a quick ROI figure (yes quick ROI).   Have your team tell you what they will take from the backlog list and execute during the next 30 days.  If one person decides they will go on a sales blitz to say New York City in the next 30 days, ask the rest of the team how they are going to help him make that trip as successful as possible.


Perhaps one person will help make appointments, the other will send an email to people in New York they have had contact with and one will set up a breakfast training at a high-end agency.  The key is to generate a tactical plan where the entire team is engaged in the attack.  No war was won without all elements of front line soldiers combined with back end services and support.


Our message is clear:  generate renewed energy to fight the battles to come and do this by motivating your team, changing the way you plan and lead, and understanding your new competitive set, market positioning and demographics.


Victor Bao is a Fellow of Valorem Consulting Group and a Professor of Marketing strategy at Florida International University and a Professor of Market Research at the University of Miami.