Group business is growing. According to American Express, group hotel rates increased globally 2.8 percent on average over 2017, with North America seeing the greatest increase, rising 3.5 percent. And we can expect those rates to continue their upward climb along with continued demand growth from groups. Unfortunately, many hotels are not capturing the full potential of this growth – the average U.S. hotel occupancy rate hitting a 30-year high at 66.1 percent, while event space remained vacant a disproportionate amount of the time.
Group businesses is a highly underutilized revenue source that should form an essential part of a hotel revenue mix. Groups provide leverage in pricing. And while leisure travelers may cancel on a whim, group business is sticky, operating in both peak and off-peak seasons. In addition, group customers spend more on ancillaries, have a higher propensity for repeat business, and often combine business trips with leisure vacations (“bleisure”).
Today, 86 percent of event planners fall into the tech-savvy Millennial and Gen X categories, with the vast majority of them now sourcing venues digitally. And while CareerCast.com ranks event coordinators fifth on the list of most stressful jobs in 2018, you can make their – and your sales team members’ – jobs easier with the right tools. Advances in technology are revolutionizing the meetings and events industry by automating and streamlining formerly manual processes. By adding critical pieces to your group sales toolkit, your hotel will g gain exposure to your highest valued prospects and have real-time access to accurate group demand forecasts, optimal room rate suggestions, and more, enabling your sales team to respond quicker and convert more booked business.
Win at the Law of Attraction
The first step in gaining more group customers starts with awareness. As planners begin their preliminary searches for possible destinations, you want your property to be the first to enter their radar. To increase exposure, you need to be visible on every channel that planners are utilizing during this stage. So, in addition to optimizing your search engine results, you can employ a top-line planner sourcing platform, such as the Cvent Supplier Network, which instantly connects you with prospects while highlighting your hotel’s value and unique features. This simplifies the site selection process for the planner and brings you incremental business you would not have obtained otherwise.
And once planners have nailed down their event destination, hotels still have a big opportunity to win the business because nearly half of all planners remain “somewhat uncertain” regarding specific venue. Implement software that allows you to target planners with customized and automated digital marketing campaigns that are more likely to convert.
Manage Incoming RFPs
Electronic requests for proposal (RFPs) have become the norm. And many group sales teams are overwhelmed with the volume of queries they receive, resulting in missed opportunities and delays in finding those diamonds amid all the “rough.” Approximately 70 percent of group business is awarded to first responders. Arm your sales team with integrated technology solutions that help prioritize leads and swiftly analyze group displacement, demand forecasts, and other market conditions to instantly suggest optimal pricing.
Strong lead-scoring lets you evaluate leads by any number of factors, including profitability, availability, and propensity to spend, helping you determine in a matter of minutes versus hours, which leads are most worth pursuing. Group displacement analysis allows hotels to accurately calculate the true value of a group in comparison to other potential groups or transient business – looking beyond room rates to examine total value, including food-and-beverage spend, meeting room rental, and all non-room revenue streams. Furthermore, with the right technology, hotels gain the ability to transform turndowns into bids by automatically recommending alternative dates if the primary dates aren’t available.
Optimize & Maximize
Oftentimes, hoteliers don’t apply the same revenue management tactics for groups that they use for transient or leisure business. However, those who use Rainmaker’s group sales enablement solution, grouprev®, can now quickly identify and convert the most valuable groups for their hotel while considering the property’s broader revenue strategy. Sophisticated algorithms allow you to maximize group room and non-room revenue by instantly optimizing group pricing with just a couple of clicks. The platform helps you maximize utilization of function space as well, and more effectively manage your property’s catering calendar.
The convenience of the optimized pricing feature allows your sales teams to respond to RFPs and group leads more quickly and confidently – as opposed to wasting hours or even days waiting for approvals and risking loss of the business. grouprev also helps you refine pattern management, allowing you to more effectively yield around transient business and better strategize around your optimal business mix. Hotels using grouprev see an average lift of 8.4 percent in group revenue, and an 11.5 percent average increase in converted group RFPs.
Benchmark Yourself & Your Competition
To achieve optimal success from your group business, you must fully understand your own performance. A solid solution measures your own key performance indicators (KPIs), patterns, and progress over time, while also providing insight into the “whys” behind the numbers. Rate your progress on metrics such as your bid, turndown, and conversion rates. Evaluate the effectiveness of your marketing campaigns, your response times, and RFP market share. And determine your ratio of RFPs won versus lost.
Once you have a clear view of your own group business performance, you can move on to see how you stack up against your competitors. How much market share do you claim? How do your soft periods compare with your comp set? Study group booking trends among your local and broader market. And identify your true competitive set, which is not necessarily made up of hotels within your local market. Advanced analytics helps you identify those hotels receiving the highest proportion of leads that your hotel also receives, no matter where in the world they’re located. By benchmarking your performance and your competition, you’re better positioned to make informed decisions concerning where you need to improve and where to best focus your resources.
Forecasting for Success
Another critical tool to deploy in this journey is one that automates the process of generating accurate group business demand forecasts. While forecasting transient demand is commonplace, forecasting for groups is a relatively new concept. But an invaluable one. An accurate prediction of your group demand allows you to convert more, facilitating decisions regarding which group or transient business to accept for any given period. Accurate forecasts help you maximize room rates and the usage of your property function space as well, while optimizing operation expenses such as food-and-beverage ordering and staffing.
It’s possible to lose a group lead at any point in the process – from sourcing all the way through to the actual event. Incorporating digital tools and software solutions can make a crucial difference. Partner with providers that will help your hotel sales professionals attract and convert the most valuable group leads to you grow your bottom line. With the right systems in place, you can dig deep into the numbers, monitoring your analytics and performance over time in order to continuously improve, ultimately claiming larger and larger slices of the “group business” pie.