The Power of Partnership: Exploring the Value of Joint Sales & Distribution Efforts and Collaboration in Hospitality’s Recovery Cycle

On 20th January 2023, HSMAI Europe hosted a group of Sales and Commercial experts to discuss the trends of the distribution landscape and share insights on the value of joint sales & distribution efforts and collaboration in the current recovery cycle.

A temperature check was conducted by Evert Schuele, Chair of the HSMAI Europe Sales Advisory Board since 2021, to determine whether direct bookings are still a valid KPI or if the landscape has changed. Uncover the key insights from the executive roundtable by reading this article, and save the essential takeaways in the comprehensive summary provided at the conclusion of the blog.

There was a joint opinion that web-direct still is an important channel at a lower cost of sales. It offers additional advantages due to data ownership and leverage to enhance the customer experience – a higher transparency of what the hotel guest might need.

OTA’s success is the benefit of frictionless booking processes for travel across borders in Europe and across the globe and by covering the entire customer journey within the distribution landscape. Frictionless experiences – which was highlighted also in the main session of HSMAI Europe ROC – had become more and more important in the customer journey.

One participant commented that there needed to be a good balance strategy between sales reach and cost of sales, tied into brand awareness levels in closer to home markets.

Familiar home markets with stronger brand awareness could be driven more directly with improved cost of sales, whilst the balance comes from the additional leverage of intermediaries in markets where customers could be more brand agnostic and where the sales funnel starts with airlines. Commercial teams needed to be conscious of market specific activations where airlines seem to be also leading the analysis on market specific profitability.

It became clear from all participants that there were fundamental changes in the industry and the sales and distribution disciplines ought to take a pragmatic approach to drive profitability. Some of the topics which were addressed by the group included:

• Market segmentation: How the role of market segmentation will change in the future with the rise of Blended (Bleisure) Travel? How will targets and goals be set?
• Attribute vs Segmentation pricing: Will it be more relevant to look at attribute pricing rather than segmentation pricing?
• TMC’s business model: TMC’s are changing their business model to a more self-serving subscription model, are OTA’s optimizing the same path to capture more share of wallet from corporate travel, or will they become a better TMC?

The market variances were also addressed. Travel in some more traditional or domestic driven markets have their own dynamics; some are driven by travel intermediaries such as Tour Operators and Travel Agencies, some have a much higher rate of direct bookings because of brand awareness in those markets.

This led to the conversation around market specific activation and targeting sales to drive revenues but also increase profitability. There were notions in the group that it is essential to create a multifunctional environment within organisations and work less in silos but increase the collaboration between Sales and Distribution with different market approaches.

Sales as “Omni channel orchestrators” needed to increase the knowledge of distribution and better understand the cost of sales and profitability holistically by market and vertically on all levels of the sales organizations.

Another point discussed the need of sales discipline to refocus on profitability and revenue management. RM systems should include a profitability component to align goals across all commercial functions. 

The intermediaries, new tech industry players as well as established travel companies on the market play with data driven decision making and include incentivization and gamification into the customer interaction. 

Thereby the distribution landscape not only becomes more complex but should be well established as a commercial function with its own targets, responsibilities and data & cost of sales driven accountability. Together with sales the approach of consultative selling and information flow / communication will become essential to generate training and knowledge down to the individual hotels or commercial organizational unit.   

As frictionless travel was highlighted as an important component of the customer journey within ROC 2023, it was also an important topic discussed in the meeting when talking about loyalty.

In the discussion, it was agreed that loyalty programs are the only means for hotels to better understand their guests’ experiences and facilitate their travel.

Due to hotel loyalty programs only covering certain parts of the customer journey, the collaboration with partners which complement the hotel and resort offering becomes essential in creating additional value for the customer at every touchpoint.

• The distribution landscape is becoming more complex and it’s crucial to integrate the narrative around distribution even further into the commercial process while making it simpler.
• A balanced mix of distribution across markets and channels is most healthy. Distribution needs to incorporate the entire sales angle of how cost and higher profitability is generated. Establishing an industry-wide agreement on the full cost of sales/acquisition could aid in creating a relevant KPI.
• Potential dilution of market segmentation (Blended Travel) leading to a different set of targets and goals for each commercial function.

It was mentioned that HSMAI is a great member’s source for KPI terminology and HSMAI also launched a business acumen training for junior level commercial talent to foster this cross commercial collaboration. Additionally, the senior version of this training is targeted to General Managers of large corporations or corporate sales leaders.

• Julie White – Commercial VP for Wyndham Hotels & Resorts across EMEA
• Jane Griffiths – Global Sales Director for Clermont Hotel Group
• Stephane Pinto – VP Sales for Aimbridge Hospitality EMEA
• Meenaz Diamond – SVP Sales Worldwide for Accor
• Evert Schule – CCO for HRG Hotels
• Jostein Brustad – Sales Director for Thon Hotels
• Juli Jones – VP for HSMAI America
• Anant Vithlani – VP Sales for Nordic Choice Hotels

Interested in joining the HSMAI Region Europe organization and staying up-to-date on relevant industry topics? Contact us at postbox@hsmai.eu