Revenue and sales managers must remain adaptable and proactive in terms of pricing, added value and cancellation while maintaining relationships that last longer than the effects of COVID-19.
REPORT FROM EUROPE—In the current climate, hotel sales managers are negotiating a fractured landscape of seeking new business and group bookings while nursing events still on the books that are susceptible to cancellation.
Sources said that even the events that remain or are being newly booked likely are to be very different. Hybrid events are here to stay, and with them comes a litany of complications about how to charge for components, such as F&B and audio-visual equipment, and how to maintain average daily rate, attendee rates and value-adds.
Ultimately, the challenge for sales managers is how to keep the money but give sufficient value in a new equation of fewer guests and attendees. Sources said revenue managers must not make assumptions as to where business is coming from.
Diego Fernández Pérez de Ponga, corporate director of revenue management for Palladium Hotel Group, said at the top of the to-do list is being flexible and tailor-made for clients. But he added his company’s policy for canceled events is to keep deposits, but those deposits can be used for a rescheduled date within the following 18 months.
“The most important (thing for) commercial leaders right now for being proactive in the market is to be flexible and safe, because safety has becoming one of the key decision points and it will be so over time. Unfortunately, conversion is still low, and all the market is focused more on 2021 than 2020,” he said.
Shona Whitehead, managing partner of business consultancy Cogent Blue, said it could take some time for group business to recover.
“The general hotel landscape is not yet reflecting a marked return of group, meetings and events business in the U.K. and Ireland,” she said. “In fact, some businesses are experiencing inquiry levels as low as around 10% versus the same time last year.”
Whitehead said that most interest is for 2021 and that at the top of her agenda is managing flexible terms and conditions, accommodating social distancing and being able to host hybrid events. She added hotels and brands are creating specific offers around these points.
“Even when all of these factors can be met, inquiries are not immediately converting into bookings with the stated and most likely reasons being the uncertainty of future government guidelines, fear of travel and budget constraints,” she said.
Sarah Williams, director of revenue-management consultancy TheRevManSpecialist and formerly a revenue manager at Interstate Hotels & Resorts, said her best advice is to chase the travel demand that is still out there.
“React to demand. There are opportunities, but what already has been missed?” she said.
One huge problem is that many revenue managers have not been able to see their hotels, some for months, Williams said. In such cases, the one person likely to be on-property is the GM, who will not understand the software, processes and relationships as well as the revenue-management team.
“GMs are exhausted,” she said. “They are trying to navigate systems but often do not know how to use it.”
But Williams admitted event organizers and associated third-party agents are not available at the moment due to company problems.
Whitehead said sales teams must be proactive and explain to nervous clients how their events can work and still be successful.
“At the same time, both hotel teams and technology companies are still learning, making it challenging for them to outline clear solutions and be able to quote for these events,” she said.
Williams said many hotels will struggle with the increased bandwidth required for hybrid meetings.
“Difficulty is the lack of clarity as to what you can do,” she said. “Added value? What can you provide? Clarity can support decisions. But do not turn business away. Take it and then deal with what comes up. Listen to your clients and work with them. People will remember how you acted during this crisis,” she said.
Pérez de Ponga said he has seen some improvement over the last month. He added price is not the factor that will bring success but rather perks and inclusion that hopefully will make events more appealing, including upgrades and discounts for F&B, meeting rooms and A/V equipment.
“There is more confidence in traveling, but demand is coming slowly. … One of the top recovering signs in this difficult time would the recovery of the (meetings, incentives, conference and exhibitions) segment, because that is the segment with more pacing with booking partners,” Pérez de Ponga said.
Whitehead urged sales managers to strategically seek what business, revenue and upside opportunities are out there.
“For this year, in the immediate future, the pent-up demand is seen to be for regional-based domestic leisure,” she said. “The goal is certainly to secure ADR by adding value, upselling throughout the customer journey and being creative with packages, particularly those capitalizing on outdoor space and attractions. Hotels are also focused on maximizing direct business and reducing costs.”
Williams said if bookings can be kept, hoteliers should retain deposits for events re-booked for 2021.
“No one loses, and cash flow is maintained,” Williams said. “The ball is in the clients’ courts, so work with them for the long term.”
She added she has not seen clients play hard ball.
Williams said in terms of leisure travel, she has seen some hope in luxury travel.
“The upper end of the market, the nicer five-star hotels, are showing some health. If you are going to go, go well,” she said.
For group, Williams already is seeing business moved from the current quarter to the fourth quarter getting jittery and wanting to move again.
She added she is hearing hoteliers are looking at this rebooked business in terms of price hikes.
“I do not recommend this for meetings already on the books,” Williams said. “Do not take advantage. The loyalty and longevity of business is what are important, even if we’re taking smaller meetings for the next few months.”
Williams said she also is seeing firms booking hotels for training purposes.
“That is coming back to London hotels, which has me surprised and delighted,” she said.
Williams said another surprise in the last few weeks is that in the U.K. furloughed employees are booking in groups, which she suggested might derive from such employees re-evaluating their lives and wanting to spend their off time enjoyably.
“That is very eye-opening. I’ve seen the yielding up of rates of serviced apartments, groups for four and five nights, friends and family who have not seen each other for months,” she said.
Whitehead said event organizers are being cautious in these difficult times but need to stay linked to audiences over the next months in terms of advice via virtual solutions.
“Recent industry surveys show that visitors and exhibitors are afraid to travel and are concerned with compliance with social distancing,” Whitehead said. “It’s important for event organizers to understand stakeholder concerns, adapting and communicating to ensure brand awareness remains strong in their relevant industry sector.
“Whilst there will be hesitation from some organizers about going down the hybrid route, due to budget constraints and inexperience, all future exhibitions will need to include some virtual element to keep in touch with their communities and retain global reach.”
There is also a temptation to slash rates to induce demand, and Williams said no one wins in that scenario.
“Do not get on your high horse on rates. You’ll just put backs up. Do not cut your nose to spite your face,” Williams said.
She added that a long-term view must be had, even if that means making profits only in 2022.
“There is the danger of a race to the bottom. That will be a real challenge, and in one area I have seen it already,” she said.