As a supplier for the hospitality industry for two decades, it has always been interesting to see how hotels and hotel companies react during times of economic downturn.
This current downturn has been especially interesting to observe because for most hotels, it follows several years of record profits, which all seasoned veterans know can't last forever. Even with the downturn many hotels will still produce respectable profits next year overall.
It is interesting to see how hotels are reacting at this current moment in our industry's history. After such great years through 2007 and a decent start to 2008, then a steady and deep dive in the third and fourth quarters to end last year, there is no doubt logical reason for uncertainty about how the market will play out for 2009 and beyond.
Certainly in a labor intensive business such as ours, it is absolutely critical to reduce payroll and to cut other controllable costs to the extent possible without sacrificing guest service. But one cut hotel leaders such as General Managers and Directors of Sales & Marketing cannot make is in their level of optimism for the future.
Although it might be an intangible not seen directly in budget forecasts and booking pace reports, a hotel team's level of optimism is certainly visible daily in the actions (or inactions) of its sales managers and associates.
Perhaps the easiest to notice is a lack of optimism about future sales opportunities. This paradigm manifests itself into sales managers who come in at 9:15am and leave at 4:35pm because "It's been slow lately," versus being disciplined to use this extra time to make those 5 extra prospecting calls each day that might lead to untapped new sources.
It can be observed by listening to initial group inquiry calls during which sales managers offer an additional discount or waive a fee without even being asked to do so. It can be witnessed in the response times to RFP's by sales managers who say "We'll it's not that hot of a lead anyway" and who send their response on the actual due date, versus those who come in early the day after the RFP arrives to make sure their proposal arrives early to make a positive first impression for the prospect.
The lack of optimism can be seen at hotel budget meetings, where sales training budgets are slashed as is the investment in sales related travel for prospecting trips and trade show participation. It can be observed in the behavior of GM's and DOM's who decide to ignore the advice received at the revenue management team meeting and to instead cut rates anyway, without themselves looking at the revenue management tools.
Once it starts to manifest, the lack of optimism in a hotel sales team eventually becomes the self-fulfilling prophecy of a down market, and most hotels with this mentality will get exactly what they expect in terms of revenues.
Contrarily, optimism is also just as easy to spot playing out daily in the actions of hotel sales teams and their leaders that believe it is still possible to find new business. Stop by their sales offices at 9:01am and you will find people that already had their coffee and said their morning hellos and who have started responding to the RFP they received yesterday afternoon. You can hear it in the phone calls with prospective group clients wherein they ask more and better investigative questions to find out what's really important so that they can sell value over price. You can read it in the proposal letters and e-mails they write that provide endorsements, reassurances, and personalized recommendations and suggestions, versus the standard template responses the competition is sending.
You can also see optimism at the front desk, where the staff markets several room types to walk-in guests versus just quoting the lowest rate, and where guests are politely notified at check-in that upgraded rooms are available at a special small fee this evening.
You can hear optimism in the conversations at budget meetings where management figures out a way to fund participation at a new trade show that has legitimate potential to produce untapped new business while still affording funds for at least some sales training and development to keep people reaching higher. You can also witness optimism at revenue management meetings where the GM's and/or DOMs consider all available information regarding overall demand supply and demand trends in the local area market and then make an intelligent choice not to start discounting too far just yet.
We have all heard the often repeated mantra "I'll believe it when I see it." Today's optimistic and visionary managers that see beyond a temporary downturn live by their own mantra: "I'll see it when I believe it!" Like their pessimistic counterparts, hotels staffed by optimistic leaders will also likely get the revenues they expect to generate!
The topic of optimism versus a lack thereof in sales reminds me of an "urban folklore" parable that was shared with me years ago, originally by my father, who at 84 years of age is still the most optimistic person I know. Many of you might of heard it as well. It's the story of an old man who sold hot dogs by the side of the road.
There was a man who lived by the side of the road and sold hot dogs. He was hard of hearing so he had no radio. He had trouble with his eyes so he read no newspapers. But he sold good hot dogs. He put up signs on the highway telling how good they were. He stood on the side of the road and cried: "Buy a hot dog, mister?" And people bought.
He increased his meat and bun orders. He bought a bigger stove to take care of his trade. He finally got his son home from college to help him out during break.
But then something happened. His son said, "Father, haven't you been listening to the radio? Haven't you been reading the newspapers?" There's a big recession. The European situation is terrible. The domestic situation is worse." Whereupon the father thought, "Well, my son's been to college, he reads the papers and he listens to the radio, and he ought to know. " So the father cut down on his meat and bun orders, took down his advertising signs, and no longer bothered to stand out on the highway to sell his hot dogs as often.
And his hot dog sales fell almost overnight. "You're right, son," the father said to the boy, "We certainly are in the middle of a great recession."
- Author unknown.
It is during these downturns in the business cycle that the entire hotel team, especially the sales team, looks to leaders such as GM's, DOM's, and DOS's for a reason to be optimistic. Despite the immediate need for prudent budget cuts and realistic planning based on the most reliable market data, what's even more important is to show your optimism every day. Make sure your actions as well as your words demonstrate a strong belief that although we might currently need to work a little harder and a little smarter than we did during those last few years of record profits, there is still plenty of business out there to be won.
Make sure you and your sales team don't ever take town your sign! Instead proudly hold it high by the side of your road and you can still sell plenty of hot dogs!
Originally published in www.hotelmotel.com