Group Business: Tips to Turn Around Your Business Despite the “AIG” Effect
By Brenda Fields Founder, Fields & Company | March 07, 2010
"Group business was the driver of the horrendous year that the hotel industry experienced in 2009, and leaders on a general-session panel at the Americas Lodging Investment Summit don't see any hope of a recovery until that same business returns", according to Jeff Higley, Hotel News Now, January 26, 2010.
Almost overnight, group business disappeared when the worst economic times of our life time coincided with the public exposure of AIG and other companies spending lavishly on group business while accepting government bail-outs. As a result, large groups from high profile companies wanted to avoid at all costs the illusion of excess or decadence and cancelled their meetings at resorts, conference centers, casinos, and convention hotels. In desperation, most group properties significantly reduced rates to attract any group business and undercut their competition to gain back this market. But did that strategy work? All data points to the fact that this strategy did not work to reverse the downward trend or, in any meaningful way, impact business. Are there other strategies that could cost effectively impact this segment of the business even in a down economy? This article will address some tips to penetrate this market regardless of market conditions to ensure that your property(s) is positioned for success.
OK. We've all heard the expression that "craziness is doing the same thing over and over and expecting difference results". But do we really believe that? If so, why are we still sending our sales people to call on the same accounts or on the same industries or in the same locations? Effective strategies are the outcome of expert analysis and evaluation. And strategy-setting is an ongoing process and through excellent management, it will be obvious when to change and when to maintain the current strategy. There are numerous reports on trends and with industry statistics and data by Smith Travel Research and PricewaterhouseCoopers, as two examples. The key in determining the best strategic plan is to incorporate the broad/macro information that is available, use competitive information, and evaluate your own current situation. What works for your competitor may not work for you. Look at what's different in the business landscape. Is there a new airline flying into your area? Do you have the opportunity to provide a real "get-away" experience for your local groups so they don't have to fly to other destinations? Do you have increased international traffic from a recent "Visa Waiver" country? And can you target key international markets that are not impacted by the US Government's bail outs? Can you develop a "casino" or a "beach" for groups that will not go to those destinations? By staying current with your local business environment, combined with global realities, and adding some creativity, will place you in a much stronger position to develop the most effective strategic plan.
Prospect for Business:
Many times, the sales person or sales leader is at a loss as to find new prospects. The tight security of companies has made it virtually impossible to prospect thru cold calling. And phone directories rarely exist for external use and emails have security or "pest control" features that make it almost impossible to even leave a message. But there is business to be booked and the smart leaders will take the right steps to ensure that their sales people can uncover group leads. Some tips are: