By Trevor Lynn, CMO at Social Tables
This year’s 2018 Hotel Data Conference was packed with the latest insights gleaned from data across the industry. I’m excited to report back on a few key takeaways for hotels hoping to grow and optimize group business in the year ahead.
What you can expect.
The hotel industry is predicted to grow comfortably through 2018 and for the next two years. According to STR, high occupancy levels should provide leverage to achieve attractive ADR increases for the next two years in select markets — particularly in urban and upscale-urban midscale hotels.
While price transparency and OTAs have made ADR growth minimal when adjusted for inflation, demand and occupancy continue to rise.
Meanwhile, group occupancy rates are dropping, the number of days for events is shortening, and the number of meeting attendees is dropping. However meeting quality is high (F&B spend by planners is up), and group daily rates are at record highs. Groups also offer a chance for hotels to increase stagnant ADR growth, using group occupancy to drive up rates for transient business during the week.
1. F&B is ripe for revenue
Hotel F&B revenue is still rising! Catering and banquets represents the largest overall revenue growth, thanks in part to profit margins that have risen from 24.9% to 29.5% in a six year period. There are a few steps your property can take to capitalize on F&B.
Transform non-traditional hotel spaces.
Consider monetizing the spaces around your properties, including walking trails, waterfronts, city parks, and beyond. Turning the focus to social and community spaces allows properties to take advantage of attendees’ desire to network, creating revenue from cocktail hours and post-event spend by attendees. In June 2017, for instance, properties in Chicago with rooftop access saw a $13 increase in revenue-per-seat compared to those without, averaging $68.20 compared to $55.22.
Grow F&B efficiency through event technology.
Whether it’s handling special meal requirements or visually communicating upsells in proposals, new technologies offer properties a unique opportunity to boost efficacy and drive more F&B revenue. STR recently confirmed that properties equipped with Social Tables Event Services Solution averaged 1.82% more F&B profit than those without.
Upsell continuous refreshments.
Another simple option is to encourage continuous refreshments. A majority of planners strongly agree that there’s benefit in providing continuous F&B throughout the day as opposed to set times. Guests aren’t confined to their seats throughout the duration, and the ability to choose creates an added layer of personalization, which planners and attendees both love.
2. Highlight enhanced experiences
Guests are now more informed than ever before because of technology, and they demand hotel experiences that are worth sharing on social media. Today, hotels need to create entirely immersive experiences. According to The Walt Disney Company, hotels should transcend “theming” to tell a story that transports guests to another world. They should use every available touchpoint with customers to differentiate their brand, from architecture to staff, design, programming, and activities. For groups, that differentiation starts with these two key touch points.
Tap into purpose.
To begin, property sales teams need to understand every meeting’s purpose. Without that it’s hard to pitch the best space and benefits or negotiate effectively in the proposal process. Ensure your team is set up for success by developing call scripts or lead capture forms that get the right information from planners: solicit the meeting’s purpose and identify your opportunities for upsell.
Technology is emerging as a key differentiator for properties worldwide. Today, 65% of U.S. hotel guests place high importance on hotels investing in technology to enhance the guest experience. For meeting planners that means everything from in-room climate control apps, to easier ways to check guests into events, to innovative ways to highlight attendees’ special requests.
3. Rethink loyalty programs
The evidence shows that guest satisfaction is higher for loyalty program members, so loyalty programs remain effective. In fact, 85.7% of recent respondents from a 2018 Social Tables survey believe loyalty programs specifically for booking groups & meetings will be successful.
Loyalty is looking younger.
Younger travelers may actually be hotel loyalty programs’ most promising prospects. 55% of 18-34 year old hotel loyalty members joined in the last two years. These younger consumers are interested in lower prices. 33% of respondents joined a hotel loyalty program in the last 2 years because it made their booking cheaper, versus just 24% who joined for the same reason the year prior. Based on this, hotels should consider offering quick rewards around lower prices that are earned easily.
To learn more about ways to drive more group business this year (it’s not too late!) download Social Tables’ free Ultimate Group Business Playbook.