Reducing Friction in the Group Contracting Process - Knowledge Center - HSMAI
Hospitality Sales and Marketing Association International
Hospitality Sales and Marketing Association International
Hospitality Sales and Marketing Association International
Reducing Friction in the Group Contracting Process

March 28, 2019

By Eric Kreins, Managing Director of Strategic Accounts, Hilton Hotels & Resorts, and a member of HSMAI’s Sales Advisory Board

Even as eRFPs have increased the pace and volume of the group contracting process, with customers demanding customized responses and fast turnaround times, that process is becoming more complicated. Concerns about privacy and transparency, changing commission structures, and a more dynamic and rapidly changing business environment are placing added pressure on a system that is time-consuming, arcane, and prone to legal challenges. 

On a recent call for HSMAI’s Sales Advisory Board (SAB), I moderated a conversation about how to reduce friction when it comes to contracting meetings and events. Here are four takeaways from our discussion:

1. Education: “There is an opportunity — the more our sales teams can be knowledgeable to educate the customer,” one SAB member said. “I also think there’s an opportunity on the front end, as they’re qualifying leads, to understand what some of those hot buttons might be from the customer before we end up in a contracting period. Too often, do we wait till we’ve gotten that verbal award before we tackle this? But the greater opportunity is educating our sales teams.”

But salespeople aren’t the only ones who need to be educated, according to another SAB member: “The buyers don’t understand — or they’re not letting themselves understand — the hotel perspective, because everybody wants a win-win at the end of the day. They want the meeting to be great, they want the hotel to be involved in it, but when you’re going through the contract process, it takes that out of it.”

2. Training: “The brunt of this is, how do we communicate with the customers?” an SAB member said. “We’ve programmed our salespeople that, when the customers call for dates, rates, and space, we spit that out of our mouth in three seconds. It goes back to training. When someone says, ‘What is your comp policy?,’ the answer should be, ‘We don’t have a comp policy, but let’s take a look at your booking and see what we can negotiate into the deal.’ It’s being able to quote rates and say, ‘If you pick them up by this date and you pick up this amount of your total block, I can quote you a rate of XYZ.’ The problem is, our salespeople just say, ‘Oh, you need a rate? Okay.’”

3. Automation: “Looking forward, I think that AI will play a role in this conversation,” one SAB member said. “For us at our CRO [central reservations office], we’ve implemented bots. We haven’t lowered staffing levels, but we’ve seen an increase in the amount of chat activity that we get. A lot of times those are things like, where is this hotel located? Are there any restaurants nearby? Where’s parking? We’re getting a little better by using artificial intelligence and bots to address some of those questions immediately, without having to involve somebody that’s also juggling two other chats and a phone call at the same time.

“I could see the same thing on the group-lead side as well,” the member said, “especially as group leads are becoming increasingly electronic only. You could set up bots to do the same thing — to qualify the rates-dates-space conversation, but even legal terms, too. Maybe not to the point of just rejecting a lead, but transferring it over to a different group of salespeople or contracting people or legal people that needs to find out if it’s something that’s worth spending any time on before it gets to the final stage of the contract process.”

4. Confidence: “The more we help our hotels to understand that, in most of our major cities, meeting space is tight everywhere,” an SAB member said. “Having that confidence on, what are the pieces that you want to hold the line, and what are the pieces that you’re willing to move on — knowing that, at the end of the day, in most major cities in the U.S. at least, meeting space is in very high demand. We’re so worried about getting that contract, that credit, but sometimes you need to step back and help our hotels to understand that they are actually negotiating from a position of power.”



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