5 Things Every Property Management Company Should Consider During Budget Season
By Lisa Bonanno Vice President, Marketing, Knowland | October 13, 2019
As hotel property management companies sit down to develop their 2020 budgets, they must consider their cost of acquisition for group and how it factors into their budget. With the looming uncertainty of the economy, many property management companies are not confident their properties' "inbound RFP strategy" will work going forward. Smart property management companies are working with their properties to shore up proactive sales skills and doubling down on the solutions needed to support proactive sales strategies. They know that with rapidly diverse sales talent, the group sales approach must evolve or their investment will be at risk.
Here are five things every property management company should ask themselves during budget season:
1. Budget to Support Strategy
What's your strategy and how does your budget support that strategy?
We are seeing more and more hotels adopting a Proactive Group Sales Strategy because they are seeing success even in the face of economic uncertainty. Developing a sales strategy that leads with proactive selling is how you gain control of pipeline development, build a stronger base of repeatable group business, and optimize profitability.
When building your 2020 budget, shift away from an over-reliance on third party sources of business and encourage your teams to source group business direct. Even if topline revenue stays flat, you would reduce acquisition costs paid to third-party intermediaries and bolster your bottom line. As hotels shift to sourcing business direct, they often find that this business turns into repeat business because of the fit for their properties. Similarly, the quality of the revenue improves as well, as this business is not based solely on the rates, space and dates commodity but rather on the total experience the hotel can provide.