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October 31, 2014

How Hotels Can Boost Group Business During Good Times

By Howard Feiertag

It looks like this coming year will be one of the better years for hotel demand, occupancy and rates. At many properties, sales staff is working in other marketing activities: advertising, promotion, public relations, social media, etc. If they can spend an extra 20-25 percent in pro-active sales, hotel event teams would soon see better figures.

Here is how: 

Develop an incentive program. Sales people should get rewarded for getting more group business on the books. Of course, many incentive compensation programs are already out there, but some do not really do the job. Some are based on budget: Meet your budget and you get this much compensation. But many are very complicated and are based on issues that should not concern a sales person, who is responsible for booking group business.

A simple rewarding program is to offer a 1 percent incentive to each sales person based on total revenue generated by group business. This is not a group program where all those in sales share on all the business booked. Further, it is not paid on bookings, but only after the group has met and all the bills have been paid. It should reflect group revenue on the master account, including room rates, group food and beverage, space rentals, recreation and other activities generating incremental revenue; everything excluding group gratuity, taxes and commissions or fees paid to outside entities. Revenue generated by individuals in the group who charge purchases to the room folio should also be included.

This is what all this would do for a hotel's event team.

  • Retention: By making incentive compensation payments only after a group has departed the property and paid all the bills, even if groups are booked one, two or three years more ahead, the well-performing sales associates will want to stick around until they collect, rather than hunting for other sales jobs or being recruited by another company.
  • Salary increases: Most expect a raise every year when it comes to an annual performance review. For some reason, a raise may not be due because of performance or budgeting situations. With this 1-percent incentive program, sales associates are really creating their own raises as they go along all year long. A decision about raises after an annual review is not necessary.
  • Increase group ADR and sales motivation: Sales associates will know they have control over their own income. The more revenue generated per group puts more in their pockets. Payments being paid on a monthly basis reflect that they can receive their incentive compensation at about the same time the groups make payment on their bills. This alone is terrific motivation

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