Counterpoint: Direct Group Sales Over Indirect Platforms
More passive RFP platforms are not the answer. Intelligence-based Direct Sales drives 8X ROI for Hotel Group Sales.
By Robert Post CEO, Knowland | September 08, 2019
Several industry publications recently asked me for my view on the $50M investment by major chains in the new group booking platform, Groups360, and what it means for Hotel Group business. So, I am taking the opportunity to share my perspective on this major collaborative investment with a wider audience.
Any investment of this magnitude would appear positive for the industry. It indicates Brands at least recognize the threat inbound RFPs and the CVENT model represent to their profitability and market cap – and are taking action. However, the idea that investing in a "slimmed-down version" of an existing business model would solve the problem is questionable.
Good news: The major brands are finally waking up! Leaders like the ones in this recent deal are beginning to recognize that the passive inbound RFP model is a threat to their business. Brands understand they need to change their Group selling behaviors and take control. The first step is to free themselves from the limitations of relying on increasingly lower-margin business obtained through the stale business model of the Group industry gorilla, CVENT.
Bad news: This new OTA-like group booking platform is setting the hotel industry up for yet another race to the bottom on both price and profit. Just like the consumer-focused OTAs, this platform focuses on price, not value or guest experience, which continues to put the meeting planner at a disadvantage when comparing venues. Price-based selling is self-defeating for hotels and continues to commoditize Group business as well as reduce overall margin. Even if you win the business, your hotel loses because you are training your meeting planner clients -- and the market overall -- that price is the dominant criteria for booking a Group.
The Missed Opportunity
Meeting planners all agree. A top pain point is the inbound RFP process. It is time consuming, cumbersome and often limits the ability to deliver the best experience. There are many qualitative criteria that go into planning a successful Group that the inbound quantitative process does not/cannot address. Additionally, because Sales is often focused on being the first or fastest to respond to a request, RFP information is typically inadequate and incomplete. So, in absence of adequate information, decisions focus solely on price.