The most critical factor in creating a successful hotel is the ability to generate revenue. Without guests that spend money, hotels will not survive for long. This insight seems to be an eyeopener for many hoteliers, even though this has always been a fact.
There were no incentives to change the way hotels worked before the pandemic. The flow of guests seemed endless. Changing an organization that works seems like much work. The crises caused by the pandemic changed all this. Now is the right time to re-think and make changes.
The challenge now is how to organize the commercial work in the most productive way to bring in revenue. The starting point is to create or revise the hotel strategy, including branding, concept, target groups, etc. Every hotel needs a total revenue strategy, including maximizing guest spending also on other than rooms. The old way of working was that marketing, sales, and revenue worked in silos executing their strategy version. This way of working was less productive at a higher cost. Now, hotels need to balance costs while managing the strategy.
The new commercial role
It is time to form a marketing-, sales-, and revenue team where each role report to the same leader, preferably a Commercial Manager, Commercial Director, or Chief Commercial Officer. This position is, of course, a member of the top management team. Ideally, the head of the commercial team is a superman or superwoman with extensive experience in marketing, sales, and revenue and, on top of that, broad leadership skills. Unfortunately, these super persons will be hard to find. Leadership skills are essential since it is relatively easier to find expert roles.
The right timing for a new organization
A re-organization would be difficult in a normal situation, and many people would see that not reporting to the GM or CEO would be a downgrade. However, many hotels have to recruit new people after the pandemic, and they will more readily accept a new organization. So this time, there are no more dotted lines, just a clear and straightforward productive organization.
Clarify responsibilities for each team
The responsibility of the commercial team is to generate all revenue sources. However, operations still have a massive impact on long-term revenue, so it is essential to define responsibility areas clearly.
Acquiring is the word for the commercial team while retaining is the word for operations. Both functions can increase and optimize revenue. The commercial team can increase the number of guests and sell more in advance to each guest. Operations can increase the booked revenue by upselling and selling other products and services during the stay.
For more ideas, download the white paper "Create a High-Performance Commercial Team."