How to Evaluate Your Hotel Sales Deployment
There are all kinds of urban legends and semi-scientific formulas for determining how many sales people you need to produce desired results in your hotel.
Some companies evaluate sales efficiency in terms of salary dollars. If a sales person costs $100K (salary + benefits + bonus), and her goal is $2,000,000, the ROI on that sales person is 20:1.
Some companies determine the return on investment in a sales FTE by the number of leads that person can handle. A group seller should be able to manage 1,000 leads per year, say, with a conversion rate of 30%.
And finally, some companies have a goal dollar-figure rule of thumb - for example, each person on the team should be able to book $1,000,000 (or $5,000,000, or whatever).
The point of laying all this out is to say that I don't know of universal rules for how to objectively measure how many people you need -- at least, none that are consistent and don't have a zillion exceptions based on style and size of both hotel and market.
So how do you know you have the right number of people?
If you're a new hotel, you can look at deployment at similar hotels and base yours on that. (One cautionary note: Check Glassdoor or other salary data; the biggest challenge I've seen for new hotels is that they proforma salaries below market and then have a really hard time hiring people.)
If you're an existing hotel, you can certainly use whichever method your company prefers from the list above.
But I'm more interested in testing your deployment against common sense.
My four common sense rules for hotel sales deployment:
1. The most senior people making the highest salaries should have the highest goals. (And if your senior sales manager has the highest goal but isn't making that goal, that's a red flag.)
2. The way that you deploy vertical segments should match the proportion of your hotel's business that comes from those segments. In other words, if the association segment makes up 30% of your hotel's group business mix, the association sales person should not carry 50% of the group goal (or 10%, or really anything other than 30%).
3. Any director-level members of your team should not carry a full booking goal. Yes, they should sell, but directors of sales, catering, etc. have too many other responsibilities to effectively manage the revenue contribution a sales manager is responsible for. I don't mean this only from a workload perspective, although it is true that the workload of running a team and booking the same number of room nights as everyone else is not fair.
I'm talking about risk to the hotel. The DOSM or Director of Events is going to be pulled in a thousand directions -- forced to drop everything to complete a report for ownership or handle a customer complaint -- so you put the hotel at risk by placing that much revenue responsibility on a person who doesn't have control over his own time.
4. If there is one major demand generator in your hotel's backyard - like a university or huge corporate campus - that business should not be the responsibility of a single team member. Again, this puts the hotel at risk. If your property's relationship with the demand generator in your market place rests on a single individual, that person's departure puts the hotel's success at risk.
This doesn't mean you need to set up a complicated bureaucracy that makes your hotel hard to do business with (i.e., the "Oh I can't help you with that - let me have the sales manager who handles 16 rooms on peak on Thursdays with a full moon call you back" thing). Just diversify enough that the relationship is not centered on a single team member.
What did I miss? What are your common-sense tips for evaluating hotel sales deployment?
Staffing is one of three core areas that impact how well a hotel will weather an economic downturn. You can read about building bench strength here, and please be sure to take our ten minute Stress Test to find out how prepared your hotel is for a dip in demand.