During a recent meeting of HSMAI's Sales Advisory Board, one theme gained prominence: sales teams are no longer evaluated solely on sales volume, but on their ability to generate revenue profitably.
Sales teams are required to deliver margin-generating results, but often they do not receive the necessary knowledge to understand how profitability works within hotels.
Many professionals were never given guidance on how concessions, space allocation, and food and beverage commitments impact the bottom line. This gap quickly becomes apparent in the quality of negotiations, vendor confidence, and conflicts with operational teams.
The sales leaders present at the conversation highlighted the importance of going beyond sales pace and volume, moving on to analyze the quality of each deal.
Teaching profitability doesn't mean turning sales teams into finance professionals. According to participants, the concept becomes more practical when salespeople can visualize a team's actual performance before and after their arrival.
To provide this context, some leaders present the income statement to their teams and explain how each business decision impacts the bottom line. When professionals understand the cost per occupied room, food costs, labor costs, and the impact of additional revenue on profit, they stop negotiating without knowing the financial consequences.
Financial literacy was identified as the main tool for promoting long-term behavioral changes.
Among the main points discussed are:
- The displacement analysis should be presented as a profitability analysis
- Quick information and simple results make decision-making easier.
- When margin replaces tariff as the main focus, negotiations become more rigorous.
- Operational teams begin to act as allies because all areas share the same language.
The group reinforced that the best results occur when this learning is consistently integrated into the business routine.
Weekly sales meetings based on income statement performance help keep profitability a top priority. Post-event analyses also allow for a comparison of projected profit with actual results.
These analyses help teams understand indicators such as TRevPAR, Total Revenue per Available Room, which broadens the view beyond accommodation revenue and considers the hotel's entire capacity to generate revenue.
One of the participants summed up this transformation clearly: “It’s no longer just about dates, rates, and venues. Profitability must also be part of the decision.”
Questions for the teams
- How does your company teach profitability concepts in an accessible way to sales teams and incorporate profit-oriented decisions into the sales routine?
- How is hotel profitability measured?
- What factors drive hotel profitability?
- How can Sales and Revenue Management teams contribute to hotel profitability?
- How to efficiently apply upselling and cross-selling strategies to generate more profitability?
- Why is TRevPAR important?
