Morgan Stanley Research recently revealed that in 2022, corporate travel budgets are expected to be approximately 22% less when compared to 2019. The road back to what was previously considered “normal” is unlikely to be exponential or straightforward.
There are numerous tried and tested operating models that proved to be reliable pre-pandemic; for example in hotel sales, sellers were situated at a property or cluster of properties segmented by booking size, market, or sector in their pursuit of clients. This frequently replicated model commonly rewarded a property with predictable outcomes, leaving circumstances such as a recent property renovation, location-specific compression, or a client’s likelihood to rotate between cities for annual meetings as cyclical differentiators. While the success of the model should not be trivialized, it does not necessarily mean the same structure should be deployed going forward.
Identifying the right model should be a balance of maintaining successful strategies and integrating efficiencies brought about through process refinement or technology. But the model must also include an effective appreciation for both temporary changes in customer behavior that have come as a result of the pandemic, but also those customer behavioral changes that are likely to last longer or even permanently.
Like many in our industry, Carpedia Hospitality has noticed that the pandemic has caused new customer habits and expectations to come to fruition. Adapting to these changes in an agile but technical manner, will accelerate your performance.
What structure works best for your organization?
Unfortunately, there is no one-size fits all answer to this question. There are generally four common constructs that an organization may follow:
- Property-Specific Teams: on-site teams located at each property
- Clustered Locally: a set of properties that share administrative services
- Regionalization: a network of properties located in the same or adjacent markets that sells for multiple locations; minimally supported at property for activities like site visits, etc.
- Centralization: a central team (in-person or remote) selling across the entire distribution network; minimally supported locally for activities site visits, etc.
Designing an organizational construct will look different for independent properties versus properties managed by a third-party group or brand; yet as a starting point, a set of similar questions can be asked to help determine what structure might work best for your organization:
- What is the size of a seller’s current market or sector (i.e. activity volume)?
- What are the requirements to effectively service that market or sector (i.e. time)?
- How likely is there to be overlap generated by multiple sellers in your network contacting the same client for the same piece of business (i.e. rework, future activity volume)?
Answering the first two questions will offer a purvey into workload requirements, which will be essential to understanding current capacity. Appreciating the answer of the third question will help you plan for what your future deployment strategy could look like depending on which organizational construct you implement. Additionally, gaining an understanding of how frequently your network of sellers overlap dialogue with potential clients will offer a glimpse into how frequently potential clients could deploy game theory when negotiating a piece of business against multiple sellers within the same network.
In the first article of this series, we examined how we have used our workload methodology to introduce prospecting expectations to sellers. That same methodology can be used to model the viability of various deployment strategies that will inform staffing requirements by understanding how time would be allocated across the different models.
For example, in the graphs above we compare 3 standalone properties versus a simple regional scenario (graph 4). Though the fourth graph demonstrates an increase in seller productivity (green), it leaves almost no space for downtime or unpredictable reactive activities (red) that require space to be adequately resolved.
Identifying the correct balance requires both technical and tactical experience to avoid disrupting employee morale or customer satisfaction. If not done correctly, no increase in productivity will overcome the cost of lost revenue.
It is for these reasons that our clients have often turned to us to navigate similar challenges.
How to avoid Sales & Operations Planning from becoming Sales vs. Operations Planning
Fundamental to the success of any organization is its ability to effectively align its sales & operations plans (S&OP). Yet, like many other industries, the hotel industry is not immune from creating unnecessary separations between its sales and operating divisions. While often done inadvertently in an effort to disseminate “relevant” information, it frequently results in silos becoming more and more embedded.
It is very common for our project teams to hear from operational leaders that sales teams do not understand what it takes to run an exceptional event. Equally, from sales teams we often hear that operational leaders do not appreciate what it takes to transact a piece of business. Regardless of what construct a sales department takes on, effectively designing an integrated S&OP into your management operating system is a critical component.
There is no shortage of data available in a hotel environment to assist in both the creation of better plans, but also to act as the means for greater insight and inspection after the fact. Unfortunately, it is all too common for data to live within specific departments or be only presented reactively in response to a particular inquiry. Integrating S&OP into a unified, all-encompassing management operating system ensures the processes and behaviors undertaken and prioritized by your team members stay aligned to the mission at hand.
Conclusion
There is no question that the current environment has caused sales teams to adapt. In the first article of this series, we explored the importance of understanding how your team is spending their time and the need to adopt a regime of “smart prospecting” in order to counter the current decline of in-bound leads.
Your review, however, should not stop there. Exploring the deployment strategy of your sales team or teams is the next critical step to drive efficiency, visibility, and root out rework and lost sales opportunities. Yet, it is not until there is alignment in the required results of your sales & operating plans through an integrated management operating system that it is safe to declare that the low hanging fruit have been adequately reviewed.
If you believe your organization could use additional support or if you would like one of our experts to review the vitality of your sales & operating plan, please reach out to our team for support.
