How the hotel sales team can improve the win rate for inquiries

04 January 2022
Hotels are, or used to be, somewhat spoiled by having a steady flow of incoming inquiries for groups, MICE, and contracts for the future sale of room nights. Finally, after two pandemic years, this is slowly coming back, and the outlook for hotels is positive. However, the competition is much higher today and for the next couple of years until the market has fully recovered. So what does a hotel need to do to increase the win rate in more challenging competition during the recovery?

Clarify the job

The starting point is to clarify the job. Likely, the hotel does not want to win any business at any price point. So the job is more likely to be something like "win the most profitable inquiries."
This definition leads to how the hotel should measure the win rate. Suppose the formula is: "Won deals divided by total inquiries." In that case, it is impossible to know if the result is good or bad since the hotel rejected some inquiries because of poor profitability. A better formula is "Won deals + rejected deals) / total inquiries." This measure gives a more accurate view of the actual win rate..
 
There are many ways to cheat, so do not use this measure for bonuses or other rewards. Instead, keep measuring correctly, and when the win rate is high, celebrate as a team. First, be sure to measure all inquiries, even those turned down due to lack of availability. All team members taking reservations need to understand the importance of registering all inquiries. Next, be honest when your mark a deal as unwanted. Only unwanted deals should be marked as bad and included in the formula as rejected deals.

Desired outcome

The second step is to define the desired outcome. The expected results are specific for each hotel depending on destination, type, target groups, and other variables. Here are some generally desired outcomes. First, speed is essential for both the customer and the hotel. Therefore, the desired outcome would be to minimize the time to convert an incoming inquiry to a definite reservation. Second, hotels do not want to lose inquiries to the completion, so another desired outcome would be to minimize the likelihood of losing the inquiry to the competition. Third, hotels do not want to leave money on the table and therefore would like to reduce underselling each potential customer. Finally, hotels would also like to minimize the reservation's likelihood of being canceled.
 
Keep track of the desired outcomes by measuring the time from inquiry to a definite reservation, the share of inquiries lost to competitors (specify which competitors), and the cancelation rate of definite reservations. It is more difficult to measure how much money the hotel leaves on the table, but maybe an average order value per person could be an excellent way to start.

Start the improvement journey

Start by measuring the current status for each quarter and the past 12 months. Next, set a realistic goal for the next 12 months broken down into quarters. Next, analyze trends to understand better what a real goal would look like. For example, if the win rate for the past 12 months was 62 % and the direction was a decreasing win rate, maybe a realistic goal would be to keep the win rate at 62 % or increase with a couple of percentage points. Finally, work through all the measurements in the same way.

Actions and resources

Now, the hotel sales team has a clear direction. No one can reach goals without a series of activities and resources needed to perform the actions. General activities are
  • Increasing brand awareness
  • Close communication with potential customers
  • Accessibility to personal service.
Resources are
  • Salespeople and in-house reservations
  • Well-designed and stable workflows
  • System support and financial resources for campaigns

Systematic thinking, planning, and execution

The conclusion is to clarify the job to understand what the sales team needs to do. Next, figure out what the desired outcome is. Next, measure to understand the current situation, set goals, and track progress. Finally, assign resources to execute the necessary actions to reach the goals.