Within the hotel sector the sales and marketing function has undergone drastic changes over the past ten years.  Driven by the explosive growth in online bookings, we have moved away from a situation where much of our business came from a few select travel agent and tour operator partners towards one where hotels need to juggle an ever expanding and increasingly complex portfolio of different online and offline distribution channels.

In the past electronic distribution at the property level was usually managed by the Front Office Manager or perhaps in more enlightened properties, by the Yield Manager.  Today however, with the distribution environment much more complex and convoluted, the skill set needed to manage the distribution function has evolved and a variety of dedicated professionals typically work at both corporate and property level trying to insure that the hotel maximises business, at the optimum price, from each and every possible channel of distribution.

However as distribution teams have grown, an organisational challenge has arisen.  Since the importance of different topics has grown at different speeds, silos of highly specific competencies have developed within many companies.  These include, but are not limited to; yield management and pricing; online sales (which generally manages OTA relationships); offline sales (which generally manages relationships with traditional tour operators); the direct web team (which runs the brand.com site(s)); Customer Relationship Management (CRM) which runs the loyalty program; perhaps in more advanced companies a Social Media team ; as well as a generic ‘e-commerce’ department that means different things in different companies but typically manages search engine marketing, content management, email marketing and analytics.

Although demarcation is sometimes flexible, in most case there is little coordination between these different departments and in many companies they openly and actively compete with each other for resources and sometimes even for customers. Each has its own standalone objectives, which often bring it into conflict with its sister departments.  Such a functional approach to organising ecommerce typically results in less than optimal performance and lost opportunities, as in many cases the left hand simply does not know what the right hand is doing.

In today’s increasingly wired world all ecommerce efforts need to be closely coordinated to insure that they present a clear and coherent picture to the world and that the efforts of one department are not dissipated by the conflicting priorities of another.  For example, there is little point in spending money on search engine marketing or social media without the appropriate backup in terms of dedicated landing pages on the brand.com website.  Similarly it is practically impossible to develop and implement a coherent pricing strategy without close coordination between the short term priorities of yield management and the longer term vision of the online and offline sales departments. Yet when each of these departments is run separately, coordination of strategy is seldom a priority.

What this of course argues for is a major rethink of the way in which we organise sales, marketing and distribution within hotel companies.  To be more efficient, the artificial barriers that have been created for historical reasons need to be torn down so that we have an organisation structure more adapted (and adaptable) to the rapidly changing electronic distribution sector.

The aforementioned silo approach, with everyone focusing on their own limited little empire, simply will not work in the future.  To more effectively run distribution, a broader, more flexible organisational structure is needed.  In most cases this will take the form of a dynamic matrix, with loose flexible connections between highly specialised team members all working together towards a shared vision and common goals.  To use a military analogy, instead of masses of armoured, infantry and airborne battalions, winning on the battlefield of tomorrow requires a more select group of commandos.

Breaking the mold in this way has several implications.  First of all it requires vision – the vision to see that the current situation is simply not working and that drastic change is needed.  Secondly it requires a radical reallocation of resources.  Both personnel and budget need to be allocated in a more supple way so that they attack the challenges that are currently a challenge for the company, but can be redeployed easily onto other projects when other issues become a priority – something that the current silo approach effectively prohibits.

Such a flexible approach is typical of the technology sector, where the agility it brings allows companies to react quickly to latest developments.  Several of the leading international hotel chains have already made this radical and far reaching change to their organisational structure and are already profiting from the resulting performance improvement.  Where do you stand?  Are you ready to make the change, or are you going to continue to try to fight today’s battles with last century’s army?