Hoteliers are eager to see meetings and events business return to form among corporate and leisure travelers. While demand recovery has not been as uniform across locales as many in the industry would like, smart hoteliers are not waiting on the sidelines to invest in tools that will help ensure they’re able to capture the demand of today—and well-positioned for the future.
Organizations and individual property owners have adopted revenue optimization technology to improve their overall competitive and strategic positioning among MICE (meetings, incentives, conferencing and exhibitions) hotels and help them remain competitive. Today’s most influential operators are using revenue management insights to improve their MICE workflow and increase the number of successful contracts signed at the optimal price at the right time.
According to a 2020 study, corporate meetings and events account for approximately 70 percent of the overall M&E market. The absence of these bookings has left a clear void in hotel profitability over the past few years, and hoteliers remain fiercely competitive over available event bookings today. Operators across the industry are leveraging advanced algorithms and data analytics to optimize their M&E revenue based on a wide range of factors. With these advanced software-driven capabilities in their tool kits, hoteliers can benefit based on their market segmentation, demand within their market, current event forecasts, historical booking data, and more.
Hotels today have roughly 48 hours to respond to a group booking inquiry before they risk becoming a second or third priority to event planners. When it comes to group business, time to response is literally money. Operators must become proactive, not just reactive, to capture business from group booking inquiries. Data visualization is crucial to improving operators’ decision-making in a pinch. When group information is available in plain view rather than hidden between the lines of a spreadsheet, operators have a tighter workflow and shorter booking process, which guests and operators benefit from jointly. This is the bedrock of an impactful revenue optimization strategy for events, and just one of many integrations helping operators compete today.
Knowledge is Power
Regarding events, operators must find a way to end the separation between their sales and catering and revenue management systems. Current S&C and revenue management systems remain siloed, separated by willful distinctions and creating a vacuum between knowledge and intention. Often, revenue managers must rely on meetings with department heads to align on strategy when they could be prioritizing M&E revenue in every interaction.
When revenue managers lack a historical understanding of a hotel’s performance, they often won’t be able to access digital records to support their strategic approach. As sales lacks revenue management data to drive its targeting, operators must bridge the gap between these and all other departments. Getting revenue management and S&C to communicate with each other effectively allows a hotel team to optimize group revenue, focusing on profitable groups while adjusting selling structures in response to bookings and group interest. With the right approach and visibility into systems, department heads are empowered to freely make revenue management decisions with less of the critical (and potentially costly) deliberation time needed between internal teams.
The best part is that all departments are already incentivized to operate on this level. Leveraging business intelligence and reporting technology is the most impactful potential growth opportunity for event operations by providing previously elusive (or burdensome to obtain) insight into key performance indicators such as revenue per attendee, function space utilization, lead times, and more. When empowered by these tools, a hotel’s entire operations team can be assured they are all in alignment when making decisions and are aware of when other departments are busy or experiencing a lull. These insights can help optimize beyond group revenue, controlling costs by better understanding monthly staffing needs. This holistic approach saves everyone on property time, but most importantly, it contributes to driving profit to your hotel’s bottom line.
Raising Competitive Awareness
The other half of RMS integrations hotels should consider is their ability to lend visibility and insight into a hotel’s performance in its local market. Understanding this positioning is vital to understanding how hotels can adjust their pricing model to optimize revenue or identify a competitor who is more fit for the property at that time. The critical element integrations provide here is agility, the ability to quickly adjust pricing strategies and identify targets to benchmark pricing against.
For example, data recently gathered by the Knowland Group found clear, traceable distinctions between M&E business in downtown Los Angeles and the entirety of Los Angeles County. This comparative analysis found that by 2023, Los Angeles County recovered all but 4 percent of its M&E business compared to 2019, with downtown Los Angeles still down 61 percent. Greater insight through RMS integrations can help hoteliers identify markets that have completed recovery and those that have yet to peak.
Is your competitor hotel priced higher because they benefit from a recent renovation? Are your lower-priced competitors adjusting their strategies, and can you compensate for this on your forecast? Access to this visibility and close insight into your local market enables operators to be more confident throughout the competitive sales process for events and groups.
When integrated with M&E technology, hoteliers can access profitable rates in a fraction of the time. One aspect of this is automation, which allows operators to be more strategic by providing insight into the competitive opportunities in the next moment. It is crucial to prioritize tasks, identify revenue opportunities and trust the forecasts they receive. Hoteliers trust the data on which they base their room pricing, and it’s time they trust the information backing M&E.
Dylan Smith is the senior global account executive, emerging innovations — meetings and events, at IDeaS.