A hotelier's quick guide to developing a winning Commercial Strategy

The hospitality industry has notoriously been slow in adoption to change. However, if the pandemic has taught us anything, it’s that we need to be open in approaching business differently, especially when it comes to guests, technology, and staff. The mentality of doing things the same way just won’t cut it anymore. Guests expect more hyper-personalized experiences with even more technology while hoteliers are expected to do more with less. How does that balance out?

While the structure of traditional hotel teams is well-established and familiar, that doesn’t mean there is not an opportunity to break those barriers and reinvent the wheel. That’s where the term Commercial Strategy comes in. As we forge ahead, there is no better time for hotels to rethink their traditional revenue-generating departments and look to bring them together as one “Commercial” team.

Read our interview as we sit down with Alise Deeb, Dragonfly Strategist’s Chief Revenue Officer and learn how to develop a winning commercial business strategy and unified team.

Q.: What is Commercial Strategy and why is it different?

Alise: Commercial Strategy is a relatively new term that is often confused by many. The travel industry has historically built very separate verticals when it comes to revenue, sales, and marketing teams. Commercial Strategy incorporates the traditional revenue-generating departments and combines them under one umbrella with leadership and development.

Commercial Strategy is ultimately about bringing these three disciplines together to support one holistic strategy, especially when it comes to a hotel’s value proposition, branding, messaging and content, sales game plan and selling its ancillary services.

Q. How can hotels really bring together a Commercial Strategy team?

Alise: It can be challenging to align the revenue, marketing, and sales teams. It’s really a progressive step for our industry and one that requires a new thought process.

 The biggest challenge that I’ve found when it comes to creating a Commercial Strategy team is that revenue, sales, and marketing typically have very different key performance indicators (KPIs) to measure their performance. The sales team is focused on meeting all customer requirements in order to sell a group or event booking with revenue goals that are independent of total hotel profit and with a component based on future bookings, whereas the revenue team is looking at how that sale will directly impact the bottom line now as compared to expectations and market performance. Then you have marketing who is looking to drive occupancy, brand loyalty and return on investment of their marketing spend with the goal of lowering customer acquisition cost. All three approaches are essential for success, so when a hotel looks to combine these three together, you start to generate synergies that help fuel your top-line revenue and make smart decisions for your business. It’s important that team goals and mindsets are aligned with a common end goal. I have found that the easiest and most efficient process for synergy is to ensure the goals are clearly aligned across the three departments and converge with the hotel’s goals.

Q. Who is the ideal Commercial Strategy leader?

Alise: The ideal Commercial Strategy leader is someone that is dynamic, profit-driven and has an open mind on change. This individual should be focused on developing a strong team-centric environment. This leader does not need to be a specialist or expert in each area, but have strong, sound leaders that believe in a team-centric approach and can help them represent these disciplines. This leader needs to understand collaboration and how to cross-pollinate ideas and execution.

Q. What else should I know about Commercial Strategy?

Alise: The Commercial team is key to a successful business strategy. Ultimately, when creating this team, it can help fuel a repeatable, sustainable business model that is focused on total hotel revenue management. It’s important for hoteliers to realize that this team may not be created right away. It’s a new approach that’s going to take time to adjust and create cohesion. However, by aligning these teams together as one, you can drive top-line revenue in ways that weren’t previously possible.

For more information on hotel Commercial Strategy and implementing it at your own hotel, click here for a free one-hour consultation.