This article is part two of a three-part series on revenue management. Part one can be found here.
Group and meeting business is a relatively untapped opportunity in terms of revenue management. Applying revenue-management practices to groups, meetings and events is not only a best practice for hotel profitability, but it also enables the sales team to sell faster, more efficiently and more confidently.
“When looking at [revenue per available room] group trends and the [average daily rates] associated with groups, they haven’t grown at the same rates as the rest of a hotel’s ADRs,” said Dom Beveridge, EVP of demand generation for the Rainmaker Group.
Hotels need to extract greater value out of their premium inventory in a holistic way with an upsell platform for these groups, said Nor1 CEO Jason Bryant. “There’s a value proposition with group and meeting business—it allows hotels to take advantage of mobile offers to the guest,” he said. “They can maximize yield and revenue on that inventory in different ways.”
Hotels need to maximize any possible chances to win the group business and use revenue-management analytics to select the best rates, Beveridge said. There are a lot of factors to consider—church groups are going to accept a different price than pharmaceutical groups will; August rates will be different than January rates; and Sunday nights will be different than Thursdays, Beveridge said.
Using cutting-edge revenue technology, hotels can run instant analyses of group profitability, including ancillary spend, and compare that against any displaced transient revenues. With groups whose dates are flexible or those confined by budget, alternative dates and rates can be generated to move groups to days with less transient displacement at risk, said Sanjay Nagalia, COO for IDeaS Revenue Solutions.
“Today’s technology takes the same principles used with transient rooms revenue and applies them to group, meetings and events business, which is critical as hospitality companies are increasingly aligning revenue-management goals and incentives with total profit, rather than solely on transient rooms revenue,” he said.