Leading Group and Catering Sales

This topic is among the many insights covered in The Hotel Sales Playbook: Winning Strategies for Success, the study guide for HSMAI Global’s new Certified Hotel Sales Leader (CHSL) certification.

Below, we share excerpts from Chapter 6: Leading Group Catering Sales, contributed by Steve Steinhart.

Not All Business Is Equal: Determining the Value of Potential Business

It is important to discern the value of potential group or catering business, as each opportunity carries unique implications for the hotel’s success. By carefully evaluating potential business, hotel teams can prioritize opportunities that offer the greatest value and contribute most effectively to their overall growth and objectives.

The Importance of the Sales-Revenue Optimization Relationship

Hotel sales and revenue optimization are interconnected. When the two disciplines have a strong working relationship, they operate effectively as a team with improved productivity, creative thinking, collaboration, and innovation. They usually have concrete and defined goals that are clear. They are trusting partners, which leads to — when needed — easy conflict resolution.

An effective sales/revenue optimization team will work together to facilitate idea generation and creativity, responding to opportunities with unique solutions in a timely manner. Members in both disciplines will learn new skills, methods, and knowledge from one another. A strong sales team paired with a skilled revenue professional will feel empowered to take innovative approaches when developing solutions for their customers — they will ask the right questions and be able to talk constructively about patterns, need dates, and concessions.

Unfortunately, the sales/revenue optimization relationship sometimes does not get past the “forming” stage. It can be derailed by a lack of communication and flawed decision-making, often based on feelings rather than facts. Sales and revenue both suffer.

Today more and more hotel companies are restructuring their organizations around commercial teams where sales and revenue optimization along with marketing and distribution come together to optimize results for one common goal. Each discipline plays a critical role in driving revenue by generating demand and optimizing strategy. Sales and revenue optimization are important components of the commercial team: revenue optimization optimizes revenue through pricing and inventory management, and sales layers in foundational pieces of business through direct sales techniques.

Each discipline must stretch its expertise and appreciate the perspective of the other. For example, from the sales point of view, key considerations for evaluating a piece of business with revenue optimization include:

The total value of the account. How much does this account bring in annually?
The total value of the stay, including incremental revenues, catering, in-house spending, etc.
The expense and the value of building the relationship with the account
The expense or reduction in value from concessions contracted
The potential for this business to bring in similar bookings from its segment

At the same time, the revenue professional’s point of view when evaluating a piece of business with sales takes into consideration the following:

The revenue displacement caused by layering the group during a high-demand period
The expense to the shoulder dates in closing out transient for group
The incremental value based on average transient spend

Sales leaders can help their revenue professional colleagues to stretch beyond the “black and white” of the analytics and understand the “gray” of total value over the long haul.

HSMAI members who attain the CHSL certification will gain professional recognition, career advancement opportunities, and the ability to contribute more effectively to their organizations’ success. For more information, visit hsmaiacademy.org/certification-hotel-sales-leader or contact Kathy Tindell at kathy.tindell@hsmai.org. 