Insights Type: Articles

What Key Indicators Are Hotel Management Company CROs Tracking?

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

When it comes to determining the full scope of the coronavirus effect, hotel management companies are monitoring specific key indicators, as the three dozen participants in HSMAI’s HMC Chief Revenue Officer Virtual Roundtable — presented online on March 25 — shared. Four indicators topped their list:

1. CASH FLOW:

Renegotiating vendor agreements — “One of the things that we’re looking at doing as a sort of first line of defense to protect cash flows is, every single vendor agreement we have, we’re either renegotiating or we’re asking to suspend payment for 90 days, even if that means suspending services for 90 days and then adding 90 days back on to the end of the term. In many cases we’re having success with, for example, free-to-guest TV providers, renegotiating contracts based on occupancy levels, which is great for us right now. We’re working through a lot on the vendor side to preserve immediate cash flows with short-term liabilities. We had just gone through a slew of refinancing, so our finance team had just wrapped up about 13 refi’s, but we are going to back to some of those lenders because it is a consideration in your lender docs if you’re allowed to temporarily close or not, which has been a hurdle to clear in a couple of cases.”
Waiting on the stimulus — “We’re waiting for that stimulus package to kick in from the Senate here in the U.S., but in Italy and in Greece, where we have some properties, that was a decision that governments made a couple of weeks ago. They’re carrying 80 to 100 percent of the employee payroll, so it was an easier decision to shut down properties.”
Stopping the pipeline — “We have a pretty active pipeline of new development, and obviously we’ve put the brakes on all of that. Part of that is not just liquidity but also because construction materials and labor are about to get a whole lot cheaper 60 to 90 days from now, so we’re going to renegotiate contracts on all of our projects as well.”

2. DAILY FORECASTS:

Planning for the worst — “We took our business development department and completely redirected all their efforts. The focus is not getting these hotels open; rather it’s trying to keep the others from closing. We did projections with worst-case scenario performance and then layered in different staffing levels — what would it take to be at 10-percent occupancy, 15, 20, 25, up to 30 or 35 percent — and really tried to zero in on where we were going to land. Those types of things have been able to produce a burn report that would be able to help owners make these decisions. It was just a matter of getting everyone in the room and shutting the door — six feet apart, I should say — to get the answers to those questions.”
Projecting three scenarios — “We’ve enlisted our business development and real estate team to help tackle a lot of this, usually with three scenarios: a moderate-occupancy scenario, assuming we get some base business; an extremely lean scenario; and a fixed-cost model, assuming we have to temporarily suspend operations.”

3. BUSINESS OPPORTUNITIES:

Maintaining light staff — “At the handful of properties where we have temporarily ceased operations, we are keeping those lightly staffed, not leaving the asset unattended, and if we do find a piece of business, we’re able to move almost immediately. We’re trying to keep our hotels ready to go if we do hop on that piece of business.
Working around shelter-in-place — “In heavily impacted markets with a shelter-in-place order, like New York, we’re finding that once we do land a significant piece of business, we’re struggling to get employees to want to come back to work when the city is in those circumstances.”

4. SHUTTING DOWN VS. STAYING OPEN:

Analyzing cost models — “We did an analysis with our business development team, looking at a cost model of what it would take to keep the hotel open versus closing. We’ve spent a lot of time on those cost models and analyze those about every three days.”
Making decisions — “We’ve spent the past three weeks scrambling to produce those models, and unfortunately decision-making started yesterday. It’s like spraying something on a fire ant’s nest. Owners now have a clear notion of what’s before them and are making decisions quickly this week.
Prioritizing employee safety — “We, too, did the analysis, but a lot of our discussion had to be around certificates of occupancy and regulation about reopening. In many cases, it’s hard to quantify the value of what it’s going to take to get that stuff done on the flipside. For us, it was also a discussion around the cost of having people in the building to secure the assets, and then certainly to talk about how you can keep your costs at a minimum and still stay open. Most of our owners are choosing to stay open for now, but a lot of it had to do with the safety and security of our employees.”

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Scouting for Key Indicators for Brand Revenue Professionals

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

HSMAI hosts regular Executive Roundtable programs for senior hospitality professionals to meet and discuss relevant issues. Typically, these are face-to-face events, but due to the coronavirus, HSMAI hosted a Brand Chief Revenue Officer Virtual Roundtable on March 24 that focused on the impact that COVID-19 is having on hotel revenue optimization.

Here are six key indicators that Roundtable participants said they are seeing domestically and abroad that can be used to determine how the hospitality industry is doing — and what might be ahead!

1. BOOKING PACE IN CHINA:

Several revenue professionals said that they are monitoring their hotels’ booking pace in China, which is in the process of recovering from the coronavirus, while also noting that there are huge differences between the two countries’ responses. “We’re watching our hotels to see when they’re reopening, but the problem I keep pointing to is that China did an extraordinary job of quarantining people and we’re doing a horrible job of that in America,” one Roundtable participant said. “As much of an indicator China may be, I think that our timeline is going to be much further out until there is more of a significant response to these requests to self-quarantine and isolate.”

2. WHITE HOUSE RESPONSE:

One of the biggest indicators noted was how the White House and the rest of the federal government respond to the crisis. “How the White House reacts and the decisions they make,” a participant said, “is going to be a huge impact on how we approach our business.”

3. CUSTOMER SENTIMENTS:

It’s important to hear from customers and know what they are thinking in order to get a better idea of when they will begin to travel again. “The initial sentiments are that they will first start traveling when business opens up, and then think about vacations,” a Roundtable participant who had already surveyed customers said. “They’re looking at dates into June right now. We’re trying to capture these sentiments and make some logical business decisions.”

4. MARKET FLUCTUATIONS:

Market fluctuations and consumer confidence in the economy could offer an early predictor of how soon things may bottom out — with economic impacts possibly lasting far longer than the pandemic itself. “I think the reality is, as much as people say they can’t wait to get back on the road,” one revenue professional said, “the implications of furloughs and layoffs are going to play into people’s disposable incomes and how much they’re going to be able to travel.”

Another Roundtable participant added: “Also, on the business side, even though we see companies asking us to rebook their meetings, when this calms down, companies might look at their balance sheets and they might not be having that meeting.”

A third participant said that the overall unemployment rate will probably be the biggest indicator. “It’s a good read on the overall impact on the economy,” the participant said, “and that’s what’s going to impact business travel.”

5. TRAVEL BANS:

With government-issued shelter-in place orders, bans on gatherings, and closings of nonessential businesses, fewer people are able to travel. But how long will that last? “It’s my fullest expectation that those travel bans are going to continue long past the health portion of this crisis,” one Roundtable participant said. “If that’s an indication on how other companies are thinking, there’s going to be a lingering effect of corporate belt tightening, probably through the end of the year.”

On the opposite end, another revenue professional said they know of a company trying to rent out a restaurant as soon as mid-April, despite many governments issuing stay-at home orders until then. “That blew my mind,” the participant said. “I think for some companies the reality hasn’t sunk in yet.”

6. OTHER INDICATORS:

Roundtable participants touched on several other indicators as well. Specific provisions of any federal stimulus package, for example, could benefit the hospitality industry. The package, which passed on March 26, offers numerous delays on corporate and business taxes and allows the hospitality industry to immediately write off the costs of building improvements.

Another indicator to watch is the airlines, which right now are struggling and not running many flights. If and when airlines begin to run their full fleets again, it will show that people are traveling and will also need hotels.

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

5 Tips for Marketers Today

By Theodore Holloway, CHDM, Vice President of Digital Marketing, Remington Hotels, and member of HSMAI’s Marketing Advisory Board

HSMAI’s Marketing Advisory Board (MAB) met on a call March 19 to discuss how hospitality marketing professional are handling the impacts from the coronavirus now that budgets are being reduced and many people have been laid off or furloughed. Here are key takeaways from our discussion, including what marketers are doing right now — or can be doing — to remain productive.

1. Customer communication is key. Instead of trying to attract visitors to their hotels, many marketers are now forced to contact customers or potential customers about cancelation policies and hotel closings instead. Social media is a great way to update customers on the changing situation, one MAB member said. Another important way to communicate is through an FAQ page that gives customers information regarding what to do when the hotel is closed and what they can do once it is reopened.

One MAB member sent out a mass email to every person in their database — current and past reservations and loyalty guests — letting them know that the hotel would be temporarily suspending its services. Another member added: “I think if you can segment that list and market to them in an appropriate way, you’re building that relationship with them.”

2. Employee communication is also important. When everyone, or close to everyone, is laid off at once, it can lead to a lot of confusion. One MAB member’s hotel set up a hotline for employees to speak to HR directly and a Facebook group for employees to join, stay updated, and have their questions answered. The member also gathered all employees’ personal cellphone and email information, so they could easily contact them once business starts to ramp up again.

Another MAB member said that they are focusing their energy on providing tangible, tactical advice to hotel clients through a podcast for hotel employees and management to take advantage of.

3. Everyone has a different pricing policy. Some hotels, remembering patterns that followed 9/11 or the recession in 2008, are holding firm to their rates, hoping to stay afloat. “Rate is not the reason people are not traveling,” said one MAB member whose hotels experimented with dropping rate. “And we got a lot of local heat from residents saying, ‘How irresponsible of you, trying to encourage people to travel right now.’”

Others said that since this is a different situation, they are dropping their rates, hoping to build loyalty. “This is not the time to optimize your rate,” an MAB member said, “it’s the time to say, ‘We’re here for you. We’re not trying to make money, you shouldn’t travel, but if you need a place to stay, we’re here for you and we’re going to make prices reasonable.’”

4. Explore new options. One MAB member mentioned that they had heard of several hotels working with the government to use the properties as quarantine centers for sick or exposed patients. Another member’s hotels were actively reaching out to hospitals to make their rooms available. If the government or hospital were to take over a hotel, they would pay a per diem rate, typically 100 percent of the market room rate, the member said.

However, several MAB members said they did not agree with this idea, citing staffing concerns and fears about the future. “What does that look like coming out of this?” one member asked. “How do people feel about that? We want to do the right thing for the market, for the property, and for everyone out there, but at the end of the day that hotel is our property that we have to use when all is said and done.”

Another idea that was brought up: Some hotels are offering day rates to people who are working remotely but don’t have a conducive working environment in their homes.

5. Be flexible. Some hotels are still seeing people searching for and booking rooms in late summer and beyond. “It’s lighter than it would be, but it does exist,” an MAB member said. However, as several members pointed out, we still don’t know what the state of the world will look like at that point in time. But if there are flexible cancellation policies in place, customers could book a future stay now that they don’t have to worry about losing money on.

One member’s sales team has been calling everyone scheduled through mid-May to rebook them; the member said that 90 percent of people want to reschedule rather than cancel. “The ones that jumped on being flexible and fair and treating people like people, those are the ones that are reaping the benefits,” another MAB member said. “We’re seeing a lot of guest feedback from social media and email saying, ‘We really appreciate your flexibility. We know you didn’t have to let us cancel without penalty, and next time we book, we’re definitely going to book with you.’”

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

The Convergence of Sales, Marketing, and Revenue — Part 1: The Entrepreneurial Approach

By Holly Zoba, CHDM, Principal, Scout Simply, and member of HSMAI’s Marketing Advisory Board

Sales, revenue optimization, and digital marketing are in the middle of a revolution — thank goodness. Just a few years ago, when I introduced a digital sales-training class for hoteliers, I began ringing alarm bells because demand for the role of the salesperson was shrinking. The numbers were sobering: According to Forrester Research, 33 percent of “order-taker” salespeople roles would be replaced with automation, and even “relationship” sellers would decrease by about 15 percent. Yet in our hotel world, salespeople often resisted change.

Fast forward to 2020 and the rubber is now hitting the road via an accelerated pace of consolidation in the hotel sales/revenue/digital marketing arena. Who’s coming out on top? Let’s explore. Within a span of about an hour at HSMAI’s recent Marketing Strategy Conference, I was either told, or in one case overheard the following:

From a corporate revenue director: “I was given responsibility for my management company’s sales, revenue management, and ecommerce departments about six months ago, but I just gave sales back.”
From an ecommerce director: “It seems like revenue managers have more free time now that predictive analytics is taking over what they used to do, so they are trying to add value by getting involved with ecommerce. I don’t like it.”
From a revenue manager: “We should really be the ones in charge of revenue because we are the most analytical. You need a strong business acumen to run revenue management, and salespeople don’t usually have that.”
From a director of sales: “I am here to learn ecommerce, because they have been reporting to me for a year and I don’t know what they should be doing.”

As you can see, everyone is talking about mergers — at the functional, departmental, and company levels. This is exciting and necessary, but also scary. Companies with a total worth of more than $3 trillion participated in merger activity last year; according to the Harvard Business Review, the failure rate for all mergers is between 70 and 90 percent. The common theme of these failures is the inability to leverage talent property and integrate technology between organizations, resulting in a lack of value to shareholders.

Does that sound familiar? If extremely well compensated, senior, presumably smart executives merging two giant organizations have a 70- to 90-percent failure rate, perhaps we could use some help figuring how to successfully merge sales, revenue optimization, and digital marketing. I called three people who represent these various disciplines and asked how their organizations are handling the merging of the “revenue” departments [MEANING SALES + MARKETING + REVENUE?]. It turns out that they’re all taking different approaches but have already been working on this for more than a year.

In three separate articles, I’ll report what I learned from each of them, starting with Allison Handy, senior vice president of sales, marketing, and revenue optimization for Prism Hotels & Resorts. Prism manages more than 25 hotels for a variety of owners whom Prism’s website refers to as “entrepreneurial.” I bring this up because the approach that Allison is taking is exactly that: entrepreneurial.

A year ago, operations had oversight for revenue optimization — Prism called these team members “revenue optimizers” — and Allison had oversight of sales and marketing; each property had a revenue optimization strategy and a separate sales strategy. Then, in Q3 2019, the functions merged, with revenue optimizers joined the sales and marketing team, all under Allison’s direction as SVP.

With input from her VP of revenue optimization, Allison’s first move was to align strategies. Prism previously had shifted the focus of revenue optimizers away from top-line-only results to incorporate how well the business flowed to the bottom line. Sales, once only responsible for room revenue, now is tasked with looking at overall revenue, including catering, F&B, and ancillary. At the property level, both revenue optimizers and sales report to the GM, but both have a dotted line to their corporate VPs, with the ultimate direction being driven by Allison.

Changing reporting structures didn’t sound all that revolutionary to me, but as I dug a little deeper, I understood how transformational this approach really became. Allison was able to work with GMs, revenue, and sales to create a unified and uniform set of actual goals to outperform competitive sets, forecast accurately, and flow profitably — for everybody in revenue optimization, sales, and marketing.

Changing the measurement of how people are evaluated in their jobs changes behaviors and in this case started to make people look at business from a broader perspective. Just think for a minute about one of Prism’s goals: forecast accuracy. Historically, that fell on revenue optimization. Sales of course contributed to the forecast, but to be honest, they never had any real accountability for accuracy. Sales’ job was to meet their booking goals; however they arrived there wasn’t all that important. But now, they have to look at their own forecasting accuracy to find out what went wrong (or right), which has led them to discover insights about business trends they had never noticed. That is one for the win column and will continue to reap benefits.

And those revenue optimizers are now also accountable for overall sales performance. How much more helpful do you think they are at communicating soft and peak periods to sales and marketing now that they have some skin in the game? Communication has improved and friction has been reduced because they are working toward a common goal. Another giant win.

Allison also shared a curious cultural viewpoint at Prism. There are “knowers” and “learners,” and Prism favors learners. While the company values knowledge and experience, it places a premium on anyone who has some curiosity — who is willing to learn more, new, or different ways of growing revenue. This will be a particularly important skillset as Prism moves into the next phase of its evolution.

When I asked Allison what sort of skillset it takes to lead this new approach, I was expecting to hear about analytics, sales, or marketing savvy, but she surprised me by saying that you must have the trust of your owners. “If they don’t trust me, they can’t trust the hotels” is precisely what she said.

I asked how she had earned that trust, and her answer to this was also telling. Allison explained that being able to size up an operation quickly was key. Understanding the market and demand generators and where to focus the team was critical, but just as important: thoroughness in managing accountability. “You can’t just hope the field team will deliver,” Allison told me. “You have to have milestones in place and be quick to shift if the focus needs to change.”

And this is also why having a team of learners instead of knowers is critical.

In the next issue of Executive Insights, we’ll look at the commercial approach to convergence.

CURATE PRESENTS: How to Be a Hospitality Sales Leader During COVID-19

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

The theme of HSMAI’s Spring Curate 2020 was going to be “Leadership in Changing Times,” and while the event is canceled the theme is more relevant than ever. With that in mind, we’re interviewing recipients of HSMAI’s Lifetime Achievement awards about how to keep going the coronavirus crisis. First up is Cindy Novotny, managing partner of Master Connection Associates and recipient of HSMAI’s Award for Lifetime Achievement in Hospitality Sales — and enough of an industry legend that we’ve interviewed her twice before. Her advice for hotel sales professionals right now: Ask your clients, “How can I help you?”

Does this situation remind you of any previous crises you’ve experienced in your career in hospitality sales?

No. This is so much more severe than 9/11 or the financial crisis in 2008. After 9/11, I left in October and I was onstage within a month in Yorkshire, England, with Rudy Giuliani, giving speeches about how to get back on planes and travel and do everything. We saw a first-quarter decline after 9/11. The next quarter, maybe 25 percent. Same thing with the financial crisis.

This has been different. It started in greater China. All of our hotels, because we have a ton of clients there, immediately declined 90 percent. Then, two months later, it was the world. It’s not like anything we’ve seen.

How is coronavirus impacting your business?

There’s no business, because we’re trainers and we’re in hotels and we own a restaurant, which we’re keeping open for to-go orders right now. Our training business, where we have 10 people in our corporate office, we’ve gone to four-day workweeks. We’ve kept everybody working and my hope is that we will continue. We are on the phone and giving all kinds of free webinars, helping salespeople with how to adjust, how to reach out to clients with thoughtful messaging. But there’s no training, obviously. So, it’s impacted it by — there’s zero business.

How are you balancing your responsibilities to your clients with your responsibilities to your employees?

We’re available. We have 30 people out in the field, and we had a call this week because we have them all over the world. Our teams in Europe and Asia, we had two different calls with that group of people saying, “This is what we want you to do.” Then, we’re doing a call with our main corporate team here. I’ve been talking to everybody daily, but we’re going to do an official call and just say, “This is the second half of this year — we may be working on Christmas.” My whole mantra is: Postpone, don’t cancel. Every client has postponed, so the second half of the year is scheduled to the gills. Everybody needs to sleep and rest up, and we’re going to be ready to go.

Why postpone, don’t cancel?

Because canceling means you’ve got to refund money. We’re telling every hotel person: Postpone, don’t cancel. Every wedding: Postpone, don’t cancel. Nobody — not one hotel, not one venue, no one — wants anyone to just cancel. They want to postpone, because that way you’ll get it on the books. You’ll move it to another date.

What are some of the mistakes that you’re seeing hotel companies make in their response to coronavirus?

Laying off and furloughing salespeople. I get that I had to let servers go and operations people go, but why get rid of your salespeople? At the end of April, that might be a different story. Salespeople should be on the phone, they should be talking to clients, they should be figuring things out. The other thing is, don’t start getting into dropping price and discounting right now. Just move the date.

How do sales professionals balance looking for opportunities in this environment with being sensitive to the realities of a crisis situation?

First of all, they should be reaching out to their clients saying, “How can I help you?” They should be calling before the clients call them to postpone and move this business. Being able to say, “Could I help you set up any webinars? Because we have the technology, we know how to do this, we’ve been doing it for a long time” — things like that. Some of the smaller businesses that they’re working with may not know how to do the kind of teleconferencing which we do all the time in hotels. If you’re in a smaller area and your restaurant is still open, you can provide takeout.

It’s about reaching out and saying, “What can we do for you? Because we know you’re not coming to the hotel and we know we’re not having this event, but what can we do?” There’s no new business development as such, but new business development comes in different ways. New business development comes by being in touch, being relevant, being present, being out there. We’re in the hospitality industry, and that word hospitality really should say a lot right now.

As much as this crisis is unprecedented, are there lessons we can apply from previous crises?

There are some. First of all, positivity. You have to have hope. You have to be positive. You have to know that we have gone through, over the course of hundreds of years, things that are bad. Especially the younger generation that wasn’t around on 9/11 or even in 2008 — we’ve got to give hope and we’ve got to give direction and we’ve got to be able to talk to people and say, “Look, we will come through this.”

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

HSMAI PERSPECTIVE: Why Cutting Sales, Marketing, and Revenue Optimization Is Short-Sighted

By Robert A. Gilbert, CHME, CHBA, President and CEO, Hospitality Sales & Marketing Association International (HSMAI)

As the hospitality industry does its part in the global response to coronavirus, hotel owners and asset managers are looking for areas to conserve cash. Some companies have already made the decision to furlough employees. Recently I received an email from an HSMAI member who had to furlough her entire sales team for four-six weeks due to the sudden drop in demand that we’re witnessing across brands and destinations.

There is no denying that this is a crisis situation of possibly unprecedented scope. The U.S. Travel Association estimates that total travel spending in the United States will drop by 31 percent — $355 billion — for the year, while the American Hotel & Lodging Association is projecting a loss of 3.9 million hospitality jobs over the next few weeks. During such a time, each hotel company and property has to balance its own unique set of demands, with the greater good being everyone’s top priority. While I understand that liquidity is a challenge for some owners with this dramatic drop in business volume, decisions on where to cut need to be weighed carefully. In my opinion, any decision to disrupt the vital roles of hospitality sales, marketing, and revenue optimization professionals is ill-advised. Why?

1. This is your revenue infrastructure. Sales, marketing, and revenue optimization are the front line of every current and future revenue stream for every hotel or hotel company. They are communicating with your active and potential customers, ensuring your brand messaging is appropriate for the current environment, and leveraging every distribution channel available to capture market share. These functions are essential to any business that intends to participate in the recovery, whenever it happens.

“When there is a sudden drop in demand like this, it affects the entire operation. It can be tempting to cut costs uniformly throughout a hotel when the financial situation declines, but that might just exacerbate the problem,” said Ed Skapinok, immediate past chair of HSMAI’s Sales Advisory Board. “In the past I’ve seen hotels cut all department expenses by the same percentage to contain costs. This might seem equitable, but furloughing salespeople or cutting revenue-generating activities makes it that much harder to rebound when the recovery happens.

“Now is the time to bolster those activities that capture new business and grow market share,” Skapinok said. “As a rule, the longer the lead time it takes for your hotel to book business, the stronger your sales effort needs to be now in order to recover more quickly.”

2. You know what not to do — just look at history. Like I said, there is much about this situation that is unprecedented. But while we might not know exactly how widespread the disruption will be or the most effective way to respond to it in the moment, we do have a pretty good idea of what hasn’t worked in the past.

“As revenue and commercial strategy leaders, now is a time to step up in a big way to show leadership with how you approach, pricing, policies and analytics,” said Timothy R. Wiersma, president and CEO of Revenue Generation LLC and chair of HSMAI’s Revenue Optimization Advisory Board. “We are in uncharted territory in many ways. Making knee-jerk decisions on pricing may have long-term implications on your recovery and beyond. We can take elements from past downturns to learn what worked and what not to do.”

From the past recession, we know that hotels that dropped their rates first were the last to recover while those that held steady were the first to recover. And, as STR’s Carter Wilson explained during a recent presentation for HSMAI’s Confronting Coronavirus webinar series, those hotels also experienced a less significant drop in RevPAR.

3. The recovery isn’t as far off as it seems. Even though a recovery date may be uncertain, we know from previous crises that the travel industry is resilient. Leisure, corporate, and group business all will return. NextGuest founder Max Starkov, a hospitality and online travel technology strategist, thinks that global tourism and hospitality will recover from the coronavirus quickly thanks to the expansion of the middle class, which by 2030 is expected to reach 5.3 billion people. That will translate into explosive growth in travel and tourism over the next 10 years.

A new survey of American travelers by Longwoods International likewise contains some good news for the short term. According to the survey, while 58 percent of people with travel plans in the next six months plan to postpone them, only 28 percent plan to cancel their trips completely — and 22 percent will change from international to domestic travel. In other words, 72 percent of these travelers will still require a place to stay, meaning you’ll need to have sales, marketing, and revenue optimization strategies in place to capture that market.

4. There’s a still a lot of work to do right now. During this period of decreased demand, it’s a good time to deploy your sales, marketing, and revenue optimization teams in areas where they can be productive. Make sure someone is available to respond to current requests and opportunities. Clean up Delphi. Refresh your prospecting plan. Touch base with every client, whether they have an upcoming piece of business with your or not. Look at your strategic plan for Q3 and Q4 in 2021; what needs to be updated? “We spend so much time working in the business, we don’t have time to work on the business,” said Cindy Novotny, managing partner of Master Connection Associates. “This is the time to work on the business.”

And as the sales director who emailed me about having to furlough her team noted, if your people aren’t working for you, maybe they’ll go to work for your competitor. Or they may leave the industry altogether. If you’ve got seasoned talent that has a proven track record, the cost of turnover will only increase in the long run and slow down your ability to recover — when it happens.

Your sales, marketing, and revenue optimization professionals are just that: professionals. Now more than ever, you need to take full advantage of their expertise.

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Protecting Your Brand Means Protecting Your Customers

Hospitality marketing professionals who are struggling with messaging in the midst of a public health crisis should take heart: Everyone wants the same thing. In a recent interview, Marina MacDonald, CHDM, chief marketing officer for Red Roof Inn and chair of the HSMAI Americas Board of Directors, explained how.

What are the immediate priorities for hospitality marketing professionals in this climate?

Immediate priorities must be the protection, safety, and caring of guests, employees, and franchises and providing them with all of the continuous crucial information they need to take the necessary precautions and safety measures recommended by health officials and health organizations.

How does a company balance prioritizing its customers’ safety and protecting its brand?

They are one and the same. By prioritizing your customers’ safety, you are protecting your brand.

Should marketing people already be thinking about their post-coronavirus planning?

Marketing executives should already have in place a year-long marketing calendar which outlines plans and projects for the year. And marketing executives should also always have crisis and contingency plans, so they are well prepared for various unforeseen scenarios which we know happen. Protecting and defending the brand is our job. For those who haven’t put those plans in place, we suggest taking the time to develop those detailed plans right now.

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Industry Thoughts at the Beginning of the Crisis

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

HSMAI’s Revenue Optimization Advisory Board (ROAB) met on a call to discuss the implications of the coronavirus on the industry from a revenue perspective. While everything we discussed was accurate at the time — March 5 — the situation has evolved rapidly since then. At the time of the call, Italy had yet to mass-quarantine the country and the United States only had a few hundred cases, compared to more than 4,000 today.

While some of the insights and perspectives may already be irrelevant, it is interesting to see how our industry was thinking about things just a short time ago. If nothing else, it reminds us that how we’re responding to the coronavirus now could feel similarly outdated in another two weeks.

Here are three takeaways from the call:

1. The effects on the industry were not fully realized at that point. While some ROAB members on the call who are based in Europe had already been slammed by the virus, members in the United States were still looking at this as a short-term (60-day or less) problem. Europe had banned gatherings of 1,000 people or more and several countries were prohibiting non-essential business travel. In Asia, one ROAB member had been dealing with the virus for a month already, and their hotel was seeing declines for the rest of 2020. “If this current trend continues in the States a month from now, or even a week,” the member said, “you guys could see the same effect as we are in Asia so far.”

And we have. Today, in the United States, the White House and the Centers for Disease Control and Prevention have recommended no gatherings of more than 10 people, and many states have forbidden gatherings of more than 25, 50, or 100 people. The U.S. Travel Association estimates that the economy will lose 4.6 million travel-related jobs this year, while the American Hotel & Lodging Association projects that 3.9 million hotel job will be eliminated in the next few weeks.

2. Once upon a time, force majeure wasn’t relevant. For a group to get to force majeure, depending on the clause, it typically has to be impossible or close to it for an event to be held and for hotels to forfeit their cancellation fees. At this point in time, many of the ROAB members on the call said they would be enforcing their contracts fully and didn’t expect force majeure to apply in most cases. “We’re encouraging our hotels to stick to the contract terms and go after full cancellation,” one member said.

But not every ROAB member planned to strictly enforce cancellation fees. “The starting point is what’s in the contract,” a member said, “but we also want to be careful not to make a short-term decision at the expense of a valuable long-term relationship.”

However, now that governments both domestically and around the globe are banning large gatherings, quarantining entire cities and countries, and banning travel coming in, force majeure likely will apply in many if not all cases, changing the situation for hotels and customers.

3. There is uncertainty going forward. This is one thing that hasn’t changed. “We don’t know what tomorrow looks like, in terms of when the bleeding is going to stop,” one ROAB member said.

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Sales Advice in the Time of Coronavirus

By Ed Skapionok, Immediate Past Chair of HSMAI’s Sales Advisory Board, and Amy Infante, CEO, GitGo, and member of HSMAI’s Sales Advisory Board

HSMAI’s Sales Advisory Board (SAB) met along with HSMAI’s Rising Sales Leader (RSL) Council on a call to discuss the implications of the coronavirus on the industry from a sales perspective. While everything discussed during our call was accurate at the time — March 12 — the situation has evolved rapidly since then. Nevertheless, here are a few actionable items that salespeople should be discussing right now — and that should still be relevant today:

1. Work on building relationships with organizations. When the outbreak has lessened and customers are considering rebooking, they are going to remember how you treated them. One RSL member said that their job right now is focusing first on maintaining relationships and then on prospecting in the future rather than trying to do any hard sells. Several people on the call mentioned checking in on customers to see how they are doing and find out what specifically they need. “Focus on what we can control right now,” one SAB member said. “What we can control is having conversations with customers and getting their feedback by asking the right, quality questions.”

2. Be aware of new and current opportunities. While the CDC has recommended that people not travel unless necessary, airline fares are extremely low right now and people are still taking advantage of that. One SAB member recalled that after 9/11, leisure travel was one of the first segments to come back. “People are stressed and they need to get out there and blow off a little steam,” the member said.

Other SAB and RSL members said that while there have been many cancellations, they’re still seeing travel from contractors and certain industries, including consulting firms, government, workers, cleaning companies, and contingency planning companies. One SAB member mentioned that they are already seeing rebookings for April and beyond from cancellations due to the coronavirus.

3. Businesses are going to change the way they operate. “This is going to be a completely new world that our sales organizations are going to be facing,” one SAB member said. “Some of the leaders may be naive and say, ‘The virus is gone, it’s business as normal.’ It’s not going to be business as normal. We’re going to have to rearrange our whole sales strategies, our staffing levels, and our business mixes to really recover what we can on the back end of this.”

Because more people are working remotely, one person on the call brought up the idea that business travel may decrease, possibly even permanently, but because this crisis has taught them to more efficiently work from a distance, there may be more of a need for them to convene in person at conferences in the future. Another caller mentioned the possibility of renting out boardroom suites to employees who need a place to focus on their remote work instead of working from home. “I wouldn’t be surprised if coming out of this companies change how they do business, including our industry,” one caller said.

4. We’re in uncharted territory. Some people are predicting that the coronavirus will affect the industry for just a few months, while others have heard that it could last up to a year. This is something different than anything the industry has faced before. “It’s quickly become apparent that this is less SARS and a lot more 9/11 in how it feels,” one SAB member said. “People are scared to fly or they’re being restricted to fly. So that’s a different set of changes in demand and how we have to deal with that.”

For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources page.

Best of Show: D-Day With The National WWII Museum

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

HSMAI’s 2019 Adrian Awards competition — celebrating creativity and innovation in hospitality advertising, digital marketing, and public relations — honored its winners at the Adrian Awards Dinner Reception and Gala in New York City on Jan. 21. The top honor of the night went to three Best of Show winners. Take some inspiration from one of them: The National WWII Museum’s “Owning an Entire News Cycle: D-Day With The National WWII Museum,” which was honored in the Public Relations/PR Campaign/Special Event category. (View all of last year’s Adrian-winning submissions here.)

BACKGROUND: Seventy-five years after Allied troops stormed the beaches of Normandy, The National WWII Museum sought to take advantage of the media coverage surrounding the diamond-anniversary celebration of D-Day in June 2019 and generate impactful coverage of the museum and its subsequent events. Located in New Orleans, The National WWII Museum is dedicated to telling the story of the American experience in the war and educate all generations on the sacrifices that were made. The campaign’s goals were to inspire and educate visitors on the lessons that can be learned from WWII, position the museum’s historians as go-to spokespeople for WWII stories, and drive traffic and donations to the museum.

CAMPAIGN: To start, the campaign targeted a wide audience across the United States but focused on veterans and their families through placements in influential broadcast, print, and online outlets. Historians and WWII veterans were interviewed in both Normandy and New Orleans for the various media spots, telling specific stories of those who fought and providing a broader historical context for the events of June 6, 1944.

The stand-out part of the campaign began in late May, when the National WWII Museum launched two cruises following the path of Germany’s conquest of Western Europe and the subsequent Allied efforts to regain control and liberate the continent. The cruises culminated with a June 6 arrival at Omaha Beach to partake in commemorative D-Day events. Along with historians, WWII veterans were on the cruise, some returning to the beaches where they fought for the first time since they landed there 75 years ago. In New Orleans, more historians and veterans took part in another series of celebrations beginning with an H-Hour ceremony at 6:30 a.m. — the exact time of the D-Day landings.

RESULTS: The campaign generated more than 1.3 billion media impressions, the equivalent of more than $46 million in advertisement spending. Placements included 132 broadcast segments (192 million impressions), with pieces on Fox News, CNN, PBS, and a CBS News Special Report, as well as 13 national print placements (18 million impressions), including the front page of The New York Times, and 102 online placements (1.1 billion impressions). The museum’s website broke several records, including its highest number of visitors in one day — nearly 75,000 on June 6 — and highest number of visitors in the month of June, at 480,000. June 2019 also generated an increase of 37 percent in online donations and broke a record for museum visitation.

WHY IT WON: Adrians judges were very impressed with “Owning an Entire News Cycle: D-Day With The National WWII Museum.” Here is what several of them had to say about it why they thought it was the best of the best:

“It’s highly interactive, making the past relevant to the present and future. It educates and enlightens about what matters, and that was really powerful.”
“The New York Times feature story really stood out, especially since it was timed to drop the day before the anniversary and helped cause the web traffic to double.”
“It was about storytelling. It wasn’t about ‘come see the new museum.’ It showed the power of what storytelling is and what PR does.”
“To incorporate the veterans’ and their children’s stories into this campaign was really brilliant. The narrative became ‘What do we learn from this in the current generation?’ It worked really well.”