In the third installment of Rainmaker’s Planning for Profit webinar series, Lydia Patterson addressed Total Group Revenue Management, focusing on how to create spend minimums that drive profit, and growing group revenue using lead lifecycle analysis. Any approach to group pricing goes beyond quoting the right room rate. Here are a few key takeaways from the webinar:
Setting Profitable Minimums:
Consider your demand influencers; seasonality, day-of-week, special events, holidays and need periods. Leverage historical data to track; meeting room occupancy, sleeping to meeting room occupancies. Take advantage of group segments willingness to pay by tracking historical data by group segment. Tracking these measures by lead time may also be useful. Start with broad guidelines to start – group meeting rooms into types, group months into seasons and consider DOW by DOW type. You can always refine from there! Lastly, be sure to share historical performance data with your sales team so they can see how these goals were actually achieved in the past and where those targets are coming from. And last but not least, test and retest! As you move between seasons or the nature of your competitive set changes, you’ll want to revisit as you go on.
Be Flexible About Fit: Best Practices for Alternate Dates
While many Sales and Revenue leaders know instinctively when an inquiry is not going to be a good fit, the approach described in the webinar will help teams confidently and efficiently address leads. One suggestion is to be flexible about fit with alternate dates. According to CVENT 50% of RFPs were turned down where the planner was open to alternate dates. If the response takes longer than 24 hours to come in, 80% of time planners will look elsewhere, so being thorough and specific and regularly updated allows for quick response times. Having a manual review of alternate dates is a best practice, so make this process easy with a hot dates calendar, fast track review process, etc. Additionally, looking at the total value of the group, including concessions and the ancillary spend guidelines, is a way to ensure the profits will be optimal. Regularly review these as conditions change, and put your most experienced sellers in charge of the inbound leads.
Path to Profit: Lead Lifecycle Analysis
Much of what we do in revenue management uses historical data as a launching point. But are you getting what you thought you would? Whichever guidelines you use, from the ancillary spend & sleeping room minimums described in the webinar to whatever ones your hotel uses, you should compare group results to the guidelines from Prospect to Tentative/Definite to Actual. How does the reality compare to the expectation? Once you appreciate where you are in terms of actualization, you can start to get into some of the factors that may be impacting, plus or minus, your achieved rate. Whether it’s concessions, setup/tear down, additional charges that come from last minute changes from the group once on property, or penalties, – it’s important to understand what is happening and why.
For an example of assessing performance for groups, and for the full run through of using ancillary spend or sleeping room sales guidelines, download the webinar here for more information!