Insights Type: Articles

Marketing Evolution – Attribution and Analytics Best Practices from the Field

By Debbie Howarth, Ed.D., Professor, Johnson & Wales University College of Hospitality Management, and a member of HSMAI’s Marketing Advisory Board

As part of a project to update HSMAI’s Certified Hospitality Digital Marketer (CHDM) study guide, HSMAI’s Marketing Advisory Board (MAB) recently discussed best practices for data analytics, attribution modeling, marketing skills, and more. Here are three takeaways from our conversation:

1. The role of hospitality marketing professional is constantly evolving. Many of the MAB members on our call offered different ways the role is changing, but all agreed that marketing professionals today need to know more and different things than marketers in the past. It is more than just learning and applying the new attribution or analytical tools. “Folks have to be scrappier than they used to be,” one MAB member said. “If you look back 20 years, there’s a lot of people who got stagnant and stuck in knowing what they know and not knowing what they didn’t, but today it’s different.”

Another member noted that the lines between the disciplines increasingly are becoming blurred. “In order to do the job, you need to understand what’s happening in operations and revenue management,” the member said. “You need to understand how they’re putting out rates and how you can develop that into a marketing campaign or even just have it on your website in a way that will get bookings.”

2. The scope of marketing analytics differs at the property vs. corporate level. An MAB member from a hotel management company sees more focus on marketing from a brand level, which can lead to conflicts at the property level in terms of where the money should go and who carries the cost. Meanwhile, an MAB member from an independent property struggles with doing everything on their own, including where to spend on marketing.

“I struggle with the feeling that if we were to only look at attribution modeling, we would put all of our money into digital and take everything out of any other traditional marketing avenue,” the member said. “Because it’s untrackable essentially, so it’s a lot of trying to grapple with my own convictions on things and with how much of the budget we should spend in those different areas.”

3. Different attribution models work better for different companies. One MAB member said how you calculate the numbers depends on what system you’re using for tracking. Another said it depends on the nature of the client and what their business goals are, which informs them how to make a marketing investment.

Another MAB member uses multiple attribution models and looks at the same data through several calculations. “We don’t believe that any attribution model is going to give you a precise number that you can take to the bank,” the member said. “We just think it’s a tool that helps us trend in and compare different campaigns to each other. So that’s why we kind of look at it from multiple lenses and have discussions about what each one means.”

Research in Action: Morality in Decision Making

By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)

At HSMAI’s ROC 2019 event in June, six college and university faculty members from hotel schools across the U.S. and Canada presented research in areas related to revenue optimization in the hospitality industry. During one of the presentations, Dr. Jeffrey Beck, associate professor in Michigan State University’s School of Hospitality Business, discussed his research on “The Role of Individual, Organizational, and Moral Intensity Factors on Revenue Manager Decision Making,” which focuses on how revenue optimization professionals respond to certain situations. The premise of this research, Beck said, was that “revenue managers and those responsible for the revenue management function are the most sensitive to ethical situations,” or that they are more attuned to recognizing situations and judging them as being ethical or unethical.

Background: Beck gave research participants — a mix of hospitality professionals — a series of scenarios that revenue managers may face and asked if they thought the situation described was an ethical problem, if the revenue professional should do the proposed action, and if the participant would do the proposed action if he or she were in the scenario. They were also asked about the harm caused by the action and if most revenue professionals would agree the action is wrong. Seventy-seven percent of those surveyed had a code of ethics in place at their properties, while 23 percent did not

Of the participants, 28.2 were on-property revenue professionals, 13 percent were regional or cluster revenue professionals, 2.28 percent were RM consultants, 7.8 percent were sales managers, 37 percent were owners or general managers, and 12 percent described themselves as “other.”

Scenarios: Beck presented to the ROC audience a few of the scenarios he gave to participants, including one involving a revenue professional who was asked by the general manager to instruct staff to quote a higher rate to guests who walk in without a reservation in the hopes of reaching the period’s revenue goal; if the guest resists, the staff will offer a reduced rate, still higher than the quoted rate on other channels. Sixty-eight percent of participants said that the situation was an ethical problem, 71 percent did not think the revenue manager should follow the GMs instructions, and 79 percent said they personally would not do what the GM instructed them to do. Thirty-three percent of participants thought the overall harm as a result of the action would be small, 50 percent disagreed thought the overall harm would not be small and 17 percent were neutral, while 68 percent believed that most revenue professionals would think the action was wrong, 19 percent said they did not believe most revenue professionals would think the action was wrong and 13 percent were neutral. Twenty-three percent believed the action would not cause any harm in the immediate future, 60 percent said the action would not cause any immediate harm and 17 percent were neutral.

Takeaways: According to Beck, prior research indicates that codes of ethics specific to revenue optimization impact ethical-situation recognition, judgement, and intention.

What’s on the Minds of Marketing Leaders?

By Juli Jones, CAE, Vice President, Hospitality Sales & Marketing Association International (HSMAI)

HSMAI’s Marketing Advisory Board (MAB) held its annual retreat last month to identify the most pressing issues facing hotels on the marketing front, and outline plans to provide marketers the insights, tools, and best practices they need to address them.

Marketing in a Digital World: While originally founded more than a decade ago to help the industry navigate the then new digital marketing ecosphere, today’s Marketing Advisory Board has an expanded scope, focusing more broadly on “Marketing in A Digital World,” as opposed to just digital marketing. So, in addition to tracking new issues on the digital front, the advisory board advises hotel marketers to broaden their own areas of focus as well. Key aspects of marketing to stay abreast of on- and off-line include:

Public Relations
“Traditional” offline channels (e.g., in-hotel marketing, on-property collateral, print, TV, radio)
Loyalty
Branding
Experiential marketing
Social
Alignment with sales, revenue optimization, and distribution
Attribution modeling
Campaign tracking
Full-funnel media strategies
Integrated marketing
Local market-based marketing
Reputation management

Top issues and disruptive forces: What are the top issues and disruptive forces facing hotel marketers today? MAB members identified:

Competition that owns their own technology (like Airbnb)
Rate parity and meta (especially when it comes to Google)
Keeping up with governmental regulations
The economy — prepping for a potential downturn, and setting rates responsibly to protect brand and rate integrity
Getting to a precise calculation of ROI on marketing initiatives
Gen Z — adapting to and keeping up with them
The convergence and confluence of disciplines and stakeholders throughout the revenue generation, capture, and optimization cycle
Consumers’ consumption behavior when there are many, many channels from which they can choose
Consolidation via mergers and acquisitions on both the hotel company and technology partner fronts
Attribution modeling — being clear on what is being measured, having internal alignment, learning from other industries, and sharing best practices
Loyalty — friction/lack of convenience is a problem that hotels must overcome
Getting clean data — it is hard to get data you can trust when owners’ investments in technology and other related tools and initiatives are often short-term focused
Keeping good talent

Look for the Marketing Advisory Board to address these and other issues at the HSMAI Marketing Strategy Conference on Jan. 22 and in other initiatives throughout 2020.

Prepping for an Economic Downturn

By Hunter Webster, CHDM, Senior Vice President of Revenue Strategy, Interstate Hotels & Resorts, and a member of HSMAI’s Revenue Optimization Advisory Board

With a potential economic downturn looming in 2020, it is important for hospitality professionals to prepare — particularly those working in revenue optimization. On a recent call for HSMAI’s Revenue Optimization Advisory Board (ROAB), I led a discussion about what steps we should be taking. Here are three takeaways from our conversation:

1. The importance of projections: “Growth estimates for next year are much lower than what we’ve been experiencing over the past few years,” one ROAB member said. “We really want to be prudent in how we’re going to approach our pricing and our inventory methods and the channels that we are going after.”

Several members said that they have been having these discussions with their owners and other business personnel to make sure that everyone is on the same page and can work together to find a profitable solution. “So far the discussion has been productive and good,” one member said.

One member is thinking about a downturn by creating two versions of the 2020 budget — one for if things stay positive and one for if they don’t go as well. “In some cases, we’re presenting both versions of the budget to owners,” the member said, “and in other cases we’re just holding onto that contingency and just trying keeping it in our pocket.

2. Talking to vendor partners: Another conversation that members agreed needs to be had is one with vendors, particularly OTAs, to secure additional marketing opportunities. “We’re looking at all of our vendor contracts,” one ROAB member said, “and we’re seeing where it’s plausible to do a multiyear deal to lock in pricing with some nominal escalator now as opposed to waiting for them to feel the pressure and increasing their prices.”

3. The people problem: While many revenue optimization professionals have been through an economic downturn before and are being cautious going into the next one, many others are facing their first. “We have a lot of young revenue folks in the field today who have never been through any kind of demand softening, because they’ve come into the business when things have been going well,” one ROAB member said. “We need to make sure that everyone knows, especially the younger ones who haven’t been to this before, to not panic and start going crazy with different tactics.”

Another member said: “I think it will be different this time, as it is always different. Every downturn is a little bit different. We’ve got the tools, we’ve got the training, we’ve got resources, we just need to figure out how to market that without creating a panic.”

How to Survive a Slowdown

By Christopher Durso, Vice President of Content Development, Hospitality Sales & Marketing Association International (HSMAI)

Finally, it’s almost here: 2020. The year the economy slows down, stops growing, and/or enters recession. Or none of these things. After several years of heated speculation, the only consensus seems to be that the economy is a moving target — and that while the uninterrupted growth of the last decade can’t last forever, no one can say for sure what will happen next.

At Fall Curate 2019, HSMAI’s Executive Insights Forum for Organizational Member companies, a panel of industry veterans presented an economic outlook that included thoughts on how to deal with whatever curveballs the economy might throw at hospitality sales, marketing, and revenue optimization professionals. Led by MMGY Global President Kate Briscoe, the panel included IHG’s Isaac Collazo, KSL Resorts’ Jeff Senior, and MMGY’s Peter Yesawich — who, like Curate attendees, think there will be some manner of economic slowdown next year. As part of their discussion, Collazo, Senior, and Yesawich offered suggestions for surviving and thriving, including these three strategies:

1. Don’t panic on pricing: “One of the key takeaways from the last time [the economy was disrupted] was that it had virtually no impact to lower your rates,” Senior said. “Part of the challenge is, the systems are scraping the rates and they’re looking at one another and they’re saying, ‘Oh, my gosh, he’s down, therefore I need to be.’ You need to take a step back and avoid the herd mentality. I’m not suggesting it’s that easy, but I’m suggesting that avoiding the herd mentality, not falling prey to the RMS’s scraping and telling you what to do, be actively engaged — that will mitigate a lot of that ADR erosion.”

Collazo added: “It goes back to watching demand. Say you have demand on the books. Why would you lower your rates at this point? Demand is elastic, but again, why would you just lower your rates?”

2. Anticipate multiple outcomes: “You should have scenarios set up,” Collazo said. “You should at least be thinking about it and have milestones to be tracking against it. Because if you’re only planning for one outcome, chances are you’re probably wrong. Why wouldn’t you plan for three or four outcomes and say, what are my milestones before I determine where to go and what I’m going to do? It’s like running. You’re watching your pace, and when you hit that first mile, am I on pace for the pace I want for the total race? That’s the same way it is with budgeting: You have to have those milestones — and even start thinking about what actions you’ll take as you cross those milestones — and know what your end goal is. It’s the using the data and the insights, and preparing. That way you’re not doing a Plan B because you’re caught off guard.”

3. Leverage your brand: “Brands matter,” Senior said. “If you have a brand that resonates with your target customer, you can charge more. It’s life’s virtuous circle, and it’s a good thing.”

Yesawich added: “In the event that the depth of the recession is a little deeper than what we think it is, one of the natural consequences of that is purchase arbitrage, which means very simply that you’ve got people who now have greater access to pricing transparency today than they did back in 2008–10. One of the consequences of pricing arbitrage is it shakes the foundation of brand loyalty. If people look at different prices and they see an attractive price for a brand that they perhaps aspire to, are interested in, and are not frequent patrons of, there’s a risk associated with the loss of that reservation. You’ve got to watch that very carefully, because I think you’re going to see that accelerate. And the headline there is, the concept of brand loyalty is fragile as we move into this.”

Maximizing the Relationship Between Hotels and Destination Organizations

By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)

As travelers seek more authentic destination experiences, the traditional roles of destination marketing organizations (DMOs) and hotel companies are blurring. HSMAI hosted a ThinkTank at Destinations International’s 2019 Annual Convention in St. Louis that focused on how the two can best partner.

Moderated by Jenny Teeson, HSMAI’s director of chapter management and volunteer experience, the ThinkTank included a presentation by Todd Hotaling, vice president of revenue and marketing for Lodging Hospitality Management, as well as panelists from leading hotel brands and DMOs: Anna Dix, senior director of destination marketing for Hilton; Brian Hall, chief marketing officer for Explore St. Louis; and Margie Sitton, senior vice president of sales for the San Diego Tourism Authority. Here’s what they had to say about fostering collaboration, leveraging local expertise, and more:

Both sides want to see more collaboration. “We’re finally going to get rid of the blurred lines and get very clear that we are all in it together, and we can help each other,” one ThinkTank participant said. “We all want the same thing, and we’re the best at it. So, take the best of what the hotel community has, the best of what the DMOs do, and just run with it.”

Another participating added: “It’s amazing the relationships you can build. If you build those close relationships, we can figure out what your objectives are, what our objectives are, and how we can make sure that we do more for the city, for the community, for the hotels, and then for our mutual businesses.”

Hotels are evolving to create the experiences guests seek. Hotel brands can work with destination marketing professionals to create experiences for guests. Particularly in larger markets, where brands have many hotel units, it’s an opportunity to partner on a seamless, consistently delivered package. Destination marketing professionals are responsible for finding experiences, building relationships with local businesses, and presenting a plan to hotels, while the hotels package and market the experience to guests.

“As a hotel brand, we’re not just selling the destination,” a participant said. “We’re trying to sell our hotels, but if our dollars can go farther by working with some partners, we’re absolutely happy to do that, and we should do that.” Another participant said: “We’re not looking for someone in Dubai to write 30 articles for where to go in Chicago. We want to make sure that it’s locals, people that know things like, if you go in on Tuesday, you’re going to be able to get into the museum for free, or whatever it may be.”

One participant noted that it’s important to leverage not just DMOs to create a local experience, but also hotel employees who live in the area. “Yes, you can go to a journalist,” the participant said, “but at the end of the day, if there’s a concierge that has been in that neighborhood for the last 30 years that can tell us anything and everything to do in that neighborhood, we want to grab that information, package it up, and share it with our consumers.”

DMOs know their locations — and just want to bring people there. “We’re the destination experts,” a participant on the DMO side said. “No one can do it as well as we can, or should be able to do it as well as we can. We have guides to the good stuff.”

DMO participants said that while they like partnering with hotels and want to be more unified in those efforts, ultimately their goal is to bring guests to the area, not a specific hotel — something with which hoteliers agree. “It’s important to us that business comes to the city, first and foremost,” one participant said. “That’s what’s important. We want to showcase what we can do there. If they go to my competitor down the street, fair game.”

Creating content is an important part of creating an experience. One participant expressed surprise that many local freelance journalists are partnering with hotels to create destination-based content. “This is new,” the participant said. “Five years ago, this didn’t exist. Now, it’s a huge opportunity for destinations throughout the United States and internationally to team up with these hotel brands and collaborate in providing destination content and unique experiences to our collective guests.”

Hoteliers said they distribute such content through any and every channel they can, wherever consumers would be searching for information, including blogs, apps, and websites — both a hotel’s and specific travel sites.

Training programs can get both partners on the same page. One DMO participant talked about hosting a training program for the hotel salespeople, general managers, and directors of sales in a large U.S. city. During the program, they discuss where to find information and how to really understand the city. “We also do a program on how to do a great site experience and how to get your general managers engaged appropriately, and get your directors of sales to attend it,” the participant said. “It’s not saying, ‘Here’s the features,’ but ‘Here’s the experience you can have when you come to a hotel here.’ We talk about creativity and being a memorable salesperson, selling the story.”

NSOs also play an important role in drawing guests. Another ThinkTank participant sees value in aligning with national sales offices (NSOs) as well as with local hotels. “I think that having a training program is a great idea to make sure that all of your hotels are aligned with the DMO in reference to representing the destination, but in addition to local stakeholders in the form of hotels surrounding DMOs, we have the national sales office,” the participant said. “There are many meeting professionals out there that are brand loyal to their NSO, and they go to their NSO before they go to any DMO and are looking for recommendations on cities.”

Hoteliers said that it is situationally dependent on who can draw in more guests — the DMO or their national brand — because based on the targeted audience sometimes one can help more than the other. “You have NSOs that aren’t in market, that don’t necessarily understand your market,” a participant said. “They can’t sell your market unless you provide them with the tools to do that.”

Curate Book Club: Lean Out

Let’s get this out of the way: Yes, Marissa Orr’s Lean Out: The Truth About Women, Power, and the Workplace is something of a response to Facebook COO Sheryl Sandberg’s hugely popular and influential Lean In: Women, Work, and the Will to Lead. “[The title is] obviously a little provocative,” Orr said in an interview with HSMAI, “but at the same time it really captures the essence of the book, which is a counterargument for Lean In.

“Lean In is the signpost for modern feminism and professional women at work — it embodies most of the conventional wisdom of today on the gender gap,” said Orr, a former executive with Google and Facebook who speaks on leadership, gender, and teamwork. “But the title isn’t just for the sake of being provocative. It does capture the essence of the book. And I also think that if two women both want to help other women, it shouldn’t matter if their perspectives are different if the goal is the same.”

Orr’s goal is to help women succeed in the corporate world. But while Sandberg advocates in Lean In for women to empower themselves at work by adopting and embracing the same behaviors as men, Orr thinks it’s not that simple. “Our systems of organizing employees, evaluating performance, and motivating people were built by men, from a male worldview, with the intention of making male employees more productive,” Orr writes in Lean Out. “They were built to serve an economy that’s long gone. While the whole world, the entire fabric of our economy, and the composition of our workforce have transformed since then, our systems have remained almost exactly the same.”

Lean Out grew out of a lecture series on women and work that Orr created when she was at Google as an alternative to the company’s female leadership programs, which she thought “lacked a realness and an honesty.” The series quickly grew in popularity, but she put it aside when she moved to Facebook, only to revisit the whole issue after her experience at the social-media giant went sideways, which she documents with hilarious, painful honesty in Lean Out. “I thought, I think we’re getting something wrong here, and in pursuit of closing the gender gap, we’re undermining a lot about women without realizing it,” Orr told HSMAI, “so I wrote my own perspective on the topic.”

You’re very nuanced in Lean Out in how you talk about gender stereotypes. You acknowledge that they exist and that there is some truth to them, but you also push back on them.

Books like Lean In and modern feminism and conventional wisdom all tend to blame the gender gap on stereotypes and culture, the theory being that women are punished for violating gender norms of this female stereotype of nurturer and caregiver. And because they’re penalized for that, they start to mute their ambition over time. They don’t want to be CEO because they’ve been punished for being too bossy. That’s the thesis underneath what is called in Lean In the “leadership ambition gap.”

As someone who conforms to a lot of aspects of a female stereotype, like being nurturing and compassionate — I’m very communal and a why-can’t-we-all-just-get-along kind of person — those are the things that really hurt me in the workplace. And it was the women who acted outside the lines, who were very aggressive and pushy, they were the ones always getting promoted. So, part of the genesis of Lean Out was seeing that my day-to-day experiences at work didn’t intersect with these theories. It didn’t make sense to me.

There’s some fascinating research out there that shows that there are these certain behaviors — there is a category called agreeableness in the Big Five personality traits, and there’s a lot that is correlated with the female stereotype. Agreeable people are nice and warm and likable and friendly; the higher you score on the dimension of agreeableness, the lower your chances are for ascending the ladder. And this aggressive, dominant kind of personality under the umbrella of extroversion, which is the fifth one of the Big Five categories — that is the predictor of who will rise to the top. The higher you score on desire for dominance predicts how high you’ll go.

At work, it’s not even about gender, it’s about these categories. Men who score high on agreeableness are punished the worst. They’re punished for being agreeable, because those behaviors don’t get you to the top, and then they’re penalized a second time for violating a male stereotype. So, to me, the leadership ambition gap — this theory that women don’t get to the top because they’re punished for violating gender norms — didn’t make sense. It doesn’t dovetail with the research.

On top of that, there’s a trade-off on both sides. When women act aggressive and bossy and violate the female gender norm, they are less likable. That is true. That’s a big thing in Lean In, and there are all these studies that show that when men act aggressive and dominant, they’re liked more by both genders, but when women do it, they’re liked less. And that is true, but being likable is actually a disadvantage in getting ahead. For me, I’m highly agreeable, so I had a lot of friends. I was very likable. But my trade-off was people didn’t respect me as much.

The point is, yes, stereotypes exist. Yes, there are penalties. And that’s unfortunate, because really the message of the book is: Be who you are and own it. If you want to be the CEO of a multinational conglomerate and you’re a woman, go for it. More power to you. If you want to stay at a mid-level management position because you would get more balance and flexibility, great. Own it. There’s a limit that stereotypes have in terms of their effect on women at work. It’s not the cause of the gender gap, and we’re so relentlessly focused on that piece of it when that’s not really the problem.

What is the problem? What is causing the gender gap?

There are several things, but we focus on what women need to do to change their behavior in order to get to the top. And in Lean Out, I make the argument that women are not the cause nor the solution to the gender gap. The gender gap is a result of a dysfunctional system and structure, which is the corporate hierarchy. It’s a zero-sum game for power and dominance that was created by men in the industrial age. Men are more motivated by competition, but women prefer and perform better and are motivated by collaborative win-win scenarios. So right off the bat, the system is biased toward the part of the population that is competitive.

And two, most large organizations have so many people around doing so many different things, it’s hard to tell who’s doing a good job. Sometimes you don’t even know who’s doing any work at all. And we’re a knowledge economy now, so the output of so much of our work is invisible. It’s hard to measure. In these environments that lack clarity and that are highly ambiguous, our brains default to whatever is most visible, so those behaviors like aggression and self-promotion, talking about your work, working on the biggest project, these are the proxies we use for performance. And these proxies, these behaviors, correlate more highly with men, but they don’t correlate more highly with competence.

In the past 300 years, the entire economy has transformed and the composition of the workforce has transformed, but these underlying structures have remained exactly the same. What makes more sense — rewiring women to conform to an outdated system, or rewiring a system to better meet the needs of a more diverse workforce?

Where do you even start when the problem is a gigantic, seemingly intractable system?

You can change the rules of the game, or you can change how you play it. A lot of women are not in a position to change the rules — they’re somewhere in the middle of the corporate hierarchy — but they can change the way they play it. And that’s all about defining success on your own terms.

But to answer your question more specifically from a systems point of view, about two or three months ago, I was in Austin for work and my friend Julie came and met me. She had just read Lean Out. I met Julie when I first started working at Google, but she left many years ago and she and her husband run a bakery now in Madison, Wisconsin. She said that before she read the book, she had been struggling with how to handle a situation at work. This woman Mariella, who was a baker, was amazing. She was the best one they had. They wanted to give her a promotion, but the only spot that was above her was head baker. When you’re head bakery, you have to do a lot of operational stuff and management takes you away from baking.

But this guy Mark that also works for her wanted to be head baker, and he would be good at it. The problem was, Julie felt he wouldn’t respect Mariella because she would report to him and she wouldn’t have as much influence, and she didn’t know how to reward Mariella in the absence of a promotion. Then she read my book and she said, “Mariella doesn’t want to be head baker, but why am I structuring my business like this? I’m structuring things the only way I know. I was thinking inside the lines.” She said, “What we ended up doing was, we promoted Mariella, so now she reports to me, and Mark is head baker, and he reports to me. So now they are of equal influence. He has to respect her, because she’s equal in decision making, but she gets to bake and do what she loves. She makes more money, she has more benefits, and she has more influence and impact.”

A lot of it is rethinking how are we motivating people and rewarding people. We’re just so stuck in this structural mindset of a hierarchy.

What can employers do to help make that vision a reality?

I think a very basic step is for organizations to really understand what it is that will reward and motivate women to want to make a bigger impact on the organization. In a lot of cases, that doesn’t look like a management position, so it’s up to the organization to figure out what that looks like. I can’t tell people how to run their business, but the core principle is pretty universal: People only work hard for things that they want. A promotion comes with, yes, some more money, which a lot of us want, but also more management responsibilities and more face time, which compromise the balance and flexibility that a lot of women really crave.

It’s also the idea that making the most impact doesn’t mean managing the most people. I wanted to work on bigger, more complex, unsolvable problems, but because of my level and because I couldn’t get advanced because I didn’t want to be a manager, I was not allowed to do that. And it was a shame, because I could have made such a bigger impact at Google had I been allowed to widen that circle of impact without managing people.

5 Things to Know About HSMAI Lifetime Sales Honoree Cindy Novotny

During her many years in hotel sales, Cindy Novotny has seen the industry from every angle, but it was in South Korea that she witnessed what might be the best example ever of hospitality in action. It was spring of 1989. She had just launched Master Connection Associates (MCA), her customer service, sales, and leadership development firm, and was conducting training at the Westin Chosun Seoul. During her time there, university students took to the streets as part of an annual commemoration of 1980’s Gwangju Uprising. “This one was so big,” Novotny recently told HSMAI, “they had tear gas.”

Novotny and a colleague were staying farther south and took the train up to Seoul, where a driver picked up them up at the train station. Because of the protests, he had to drop them off a few miles from the Westin. “We had to leave all our bags in the car, because he couldn’t get to the hotel,” Novotny said. “He said, ‘I’ll get it to you. I’ll get it to you either tomorrow or the next day.’ We figured we’d never see these bags again, and literally 48 hours later, the bellman knocked on our doors and there was our luggage. Totally intact, nothing stolen. And that’s the life. This is hospitality.”

And what a life — and career — it’s been. Recently, Novotny, who is MCA’s managing partner, was honored with the HSMAI Americas Award for Lifetime Achievement in Sales, presented during HSMAI’s Sales Leader Forum on Nov. 5–6. “I feel very honored,” Novotny said, “and I’m very proud that I got it.” You can learn more about her professional journey and her thoughts on hospitality sales from an interview we did with her a few months ago. From our latest conversation, we learned these five things:

1. She thinks of hospitality as a calling. “I do think that you choose to be in the hospitality industry because you love it. You like serving people, you love being involved, and you have no issue working weekends and holidays, because that’s what hospitality’s about. We’re the ones that are doing the events and parties on the weekends and serving on Thanksgiving when other people are home. And to love that, you’ve got to be present, you’ve got to increase your visibility, you’ve got to be out there meeting and greeting people in the lobby of your hotel. I don’t think anything has changed — the warmth and genuine love for hospitality is very important.”

2. She believes in mentoring. “I had phenomenal mentors. I had people that showed me how to do it. They showed me how to work a trade show. They showed me how to network. They showed me how to go to a cocktail party. You know, when you start out and you’re in your 20s, you’re drinking beer and wine when your customers are having a martini and you’ve never had that in your life. It’s not about teaching somebody how to drink, but if you don’t drink, it’s knowing how to make the customer feel good by you going up to the bar and getting a soda water with lime. It’s all these little elements of finesse. The etiquette and the art of being in sales today is you have to learn how to do some of this. And I think we have lost some of that.”

3. She runs her own venues. “I own a restaurant in Southern California and I have a 200-acre farm in Iowa where I do weddings and events. I don’t have hotel space, rooms, but I have event space and I do a lot of that. So, I don’t miss being on site, working in a hotel every day, because I am doing it in my own business, too. And also, in my career as a trainer, I actually am at a hotel every day. I’m answering inquiries, I’m working a reservation, I’m showing people how to do it, I’m talking to live customers every day. Right now, I’m at Pebble Beach and I’m wearing a Pebble Beach nametag. I’m walking through the hallways and people are asking me questions and I’m helping them out, and I love that.

4. She sees how customers have changed. “They’re very knowledgeable. They have everything at their fingertips. The client knows as much about your hotel or your destination or your venue as you do. They have access to every one of your competitors. So, the only difference today is, you have to be much faster. You have to be more knowledgeable. You have to sell stronger against the competition, because they’re not ever just looking at you. You’ve got to be more savvy with business acumen. You’re now involved in the owner meetings and with real-estate investment firms that own some of these hotels. You have to be able to put a report together and present on your market, which didn’t used to happen. The only person that ever presented was the director of sales and marketing and the GM. You’ve got to be a lot more tuned into the business side of it, the revenue side of it, the ROI side of it.

5. She’s done it all. “When you take a look at what I’ve done and where I’ve been, I have been able to fly all over the world. I’ve been to countries that are phenomenal, and I’ve been in situations where a coup is taking over in Venezuela and we’re down there training. One time I was in South Korea in the middle of what they call the Spring Uprising, where the students were rioting. I’ve been with sheikhs, wearing an abaya in the middle of Saudi Arabia. And I never would have been able to do things like that if I wasn’t in hospitality sales, because I wouldn’t have been able to see the world like I saw it.

“When I was first with Westin, we’d go to these huge incentive shows, and one year they dressed us up as elves — in front of all these clients. One year I worked in Chicago, and my boss put me in a gorilla costume and I roller-skated up and down Michigan Avenue saying, ‘It’s a jungle out there! Welcome to paradise!’ I’ve done it all. And I have had bosses that are phenomenal and I have worked for some of the biggest jerks in the world, and yet I have nothing that I can go back and go, wow, that was terrible. I thoroughly enjoyed every bit of it.”

What’s Keeping CSOs Up at Night Heading in to 2020?

At HSMAI’s Chief Sales Officer Executive Roundtable, held in conjunction with HSMAI’s Sales Leader Forum in Frisco, Texas, on Nov. 5–6, CSOs from hospitality brands, management companies, and owner groups engaged in a high-level conversation that included identifying some of the trends that have most surprised them this year. Here are four things they said are keeping them up at night:

1.Skills: While fundamental sales skills are still very important, CSOs are working to figure out where exactly newer skills fit in. In particular, data analytics and intelligence have applications across the hospitality industry, but their use and importance in sales specifically is still being determined.

2.Attribution: It’s difficult to blend channels and attribute business. CSOs need to know how to change and evolve to best do this, but some aren’t sure how.

3. People: Talent is hard to find, there are many salespeople who can’t even tell their own story (and who don’t understand the costs of distribution), and CSOs need to find new tools for their sales team — and better train them on using them.

4. Technology: Disruptive technology is going to completely change how every part of the industry works. While new products and advancements are being offered constantly, CSOs need to determine which ones generate the best ROI and focus their energy and money there.

The session was sponsored by Clairyoyix, Knowland, and ZS. Hotel companies represented at the Roundtable included Accor, Best Western Hotels & Resorts, Drury Hotels , KSL Resorts, Marriott International, Omni Hotels & Resorts, OYO Hotels, North America, Radisson Hotel Group, and Red Roof Inn. HSMAI brings together Chief Marketing Officers, Chief Digital Marketing Officers, Chief Sales Officers, Chief Revenue Officers, and Hotel Management Company Sales & Marketing Executives through the year.

Research in Action: Effects of Minimum Wage Increases

By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)

At HSMAI’s ROC 2019 event in June, six college and university faculty members from hotel schools across the U.S. and Canada presented research in areas related to revenue management in the hospitality industry. During one of the presentations, Dr. Toni Repetti, an assistant professor of finance, accounting, and gaming in the William F. Harrah College of Hospitality at the University of Nevada, Las Vegas, discussed research she completed with Dr. Susan Roe, an associate professor of hospitality and tourism management at San Francisco State University on “Hot Labor Topics in Restaurant Management,” during which she explored the effects of minimum-wage growth on restaurateurs.

Background: In 2019, Repetti said, 21 states implemented minimum-wage increases, ranging from $0.05 to $1.40, with an average of $0.24. The reasons for the increases included the rising cost of living and previously approved legislation. For 2020 and beyond, 16 states have already announced minimum-wage increases, not including any city or jurisdiction increases. Repetti set out to determine the anticipated effects of minimum-wage increases on employment levels and pricing decisions in restaurants. This differs from previous studies that only examined the impact at the industry level.

Research: Repetti surveyed 179 restaurant operators in 45 different states, from a variety of types of restaurants with an average of 28 employees and an average of $19.96 per check in their restaurant. Among survey participants, 53.1 percent were from independent restaurants, with 46.9 percent working for chains; 28.5 percent were general managers, district managers, or owners, while 71.5 percent were managers. Repetti asked them following question four times: “If state minimum wage increased in your area and you could adjust pricing and employment, how much would you adjust each standalone and in combination with the other?” Each time she asked the question, the minimum wage increased a different amount: 25 percent, 50 percent, 75 percent, and 100 percent.

Results: Restaurant operators involved in the study indicated that the level of the minimum-wage increase would significantly affect changes in menu pricing and employment levels. The higher the minimum-wage increase, the more significant the change. When asked about the increases of 25, 50, 75, and 100 percent, the pricing increased, respectively, by 20 percent, 33 percent, 47 percent, and 63 percent, while employment decreased, respectively, by 13 percent, 25 percent, 38 percent, and 51 percent.

Repetti further broke down the ways in which operators said they would likely enact operational changes to offset minimum-wage increases. In regard to price increases, 64.1 percent said they would raise the price on all menu items, while 20.5 percent would target only entrees and 15.4 percent said only beverages or side items. Forty percent said they would consider changing ingredients to reduce costs, 40 percent would reduce portion size, and 20 percent would reduce the number of offerings.

The most common employment adjustment was to schedule fewer hours, with 65.6 percent of respondents saying they would cut costs in that way — while 15.6 percent said they would fire employees, 14.1 percent would shift full-time employees to part-time, and 4.7 percent would eliminate overtime. In terms of modifying work allocation to cut costs, 43.4 percent of respondents said they would take steps to increase productivity, 16.7 percent would assign hourly tasks to management, another 16.7 percent would take steps to improve the hiring process, and 10 percent would reduce services offered.