Why Group Revenue Is Essential: Understanding the Importance of Group Business

Author: Avanti Joglekar

Group revenue is one of the most consistent and profitable segments of any property’s overall business.  No other segment can be counted on, year over year, for both room and ancillary revenue.  In fact, even with record setting occupancy rates, group revenue rates have nearly matched pace with overall growth from the transient sector.  The global business travel market is booming, and our current stable global economy means that RevPAR and revenue for group business travel are expected to increase in 2018.  


Unlike transient business, group travelers help to drive profits all year round.  Group business can sustain properties during off-season months when leisure travelers are scarce.  As an added revenue source, hotels have the opportunity to convert business travelers into leisure guests, known as the emerging ‘bleisure’ segment.    

However, group business is widely seen as secondary or even ignored in favor of transient business.  Group business is traditionally viewed as a way to fill rooms that aren’t sold to transient guests.  Plus, group business requires more sophisticated methods of pricing and forecasting since it requires metrics on sleeping rooms, meeting space, food and beverage, and other ancillary revenue sources.  When you factor in those elements with a property’s sales goals and RFPs, the challenges surrounding group revenue management appear even more confusing.

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It’s especially difficult for revenue managers to know where to start looking for ways to maximize group business because revenue management systems for many hotels don’t have the requisite tools to assist them.  The overall lack of analytics and data on group business suggest that despite its profitability, group revenue is not viewed as an important piece of a hotel’s overall revenue generation strategy.

It’s clear that group business doesn’t always get the credit it deserves.  Luckily, there are ways to balance out the discrepancy between the challenges and benefits of group revenue management.  Innovative technology and new analytics are revolutionizing how the hospitality approached group revenue management and group sales.  These new practices will save valuable time in both decision making and analysis, and will ultimately increase your group business profits.

Interested in learning more about maximizing your group revenue?  Click here to download our new eBook, where you’ll discover more about how to simplify group RM and increase performance.

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