Hi, welcome to one of our Coffee Time chats, a kicked back, feet up, type of discussion.
Today we are joined by:
💠 Henrik Karlsson from Benchmarking Alliance
and
💠 Peter Brauer from Get Into MoRe, one of our Expert Partners
Today’s chat is around the value of Hotel Benchmarking post pandemic and as Meetings and Events start coming back on line what metrics could you be looking at to maximise your revenue in this valuable area.
Hope you enjoy it 🤞👍
NB: There is a transcript below from parts of the discussion. Please note our transcripts are generated using speech recognition software and human editing and may contain errors
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🎞 VIDEO CHAPTERS:
- 01:03 Guest Welcome and Topic Introduction
- 01:32 Guest Introductions
- 03:20 Benchmarking – how has it been through, and post, pandemic
- 07:40 Benchmarking in meetings and events
- 14:15 Metrics to benchmark meetings & events
- 25:29 Other metrics to benchmark meetings and events
- 32:46 Will we stop talking about ‘ancillary’ revenue
- 38:01 Wrap Up
👀 WATCH NEXT (A few of our other videos)
💢 Let Us Be Clear Revenue Managers Do Not Create Demand
💢 Marketing Audit: It May Not Sound Exciting But It Can Be Crucial For Your Budget
💢 Get Predictive: Moving Beyond BI and Forward Looking Data
💢 Meetings and Events Coming Back: Do You Sell or Not Sell?
💢 Hotel Group Business: Where the RM and DoS Butt Heads Unnecessarily
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TRANSCRIPT
Trevor Grant
Let’s, let’s start off broadly, as we start to come out of the pandemic what is the impact, and engagement, around benchmarking? Can you give us some thoughts, observations around that?
Henrik Karlsson
Yeah, I mean, when when the pandemic hit in March 2020, of course, we were also worried as, I would imagine, all companies within the hospitality industry, we didn’t know what that would mean, for us. And luckily, we discovered that, you know, benchmarking apparently was more important than ever. And so, we’ve been actually doing quite okay, during the pandemic, but of course, all our customers, that is the hotels and the conference venues. It’s been a struggle, of course, yeah. And, you know, everything just went down. And the numbers were red all over, basically.
Trevor Grant
But you still see people were reporting in the same way that they’ve always reported?
Henrik Karlsson
Yeah, they did. It’s important to still still see the numbers in the market. And you know, everybody knew that it was bad, but you know, how bad – Is it worse for me than for the others? The idea of benchmarking is always important, even if the times are bad, you know,
Peter Brauer
Yeah, true, because it’s still, whatever happens out there, it’s good to know how many hotels are still reporting, what are the occupancy levels, what are we looking at past month, how were we compared to the whole market and these things are good indicators of either what’s going to happen or as a comparison. I think the benchmarking, even in absolute numbers, if it’s nothing there, you still have the same KPIs in the end right?
Trevor Grant
One of the areas that is returning is meetings, events and conferences. Henrik, you mentioned it’s a big area and conference probably makes up, you know, is probably number two in terms of from a revenue perspective. So the value of it is obviously high. What percentage of hotels engage with some kind of benchmarking?
Henrik Karlsson
You know, it’s never been as interesting to work with revenue management for meetings and events, as it has been for rooms and I think there are many reasons to that. One of them is that we haven’t had enough systems actually, there hasn’t been these optimising systems, or ideas, that a revenue manager can actually worked with. Another thing is, it’s so much more slow than than the rooms part, you know, it’s the bookings of hotel rooms is so much quicker, if you’re 100 room hotel you can get like 10 or 15 bookings the same day – but meeting and events doesn’t work like that. It’s long term and what you do now, you will see, hopefully, in the beginning of next year, you don’t get these quick results. So I think that’s why in general, it’s been left to the Meeting and Events Manager or to somebody else in the hotel to take care of.
Peter Brauer
Although that has changed quite recently. Like you said, before, the bigger ones came in four or five months ahead, now we’re selling different sorts of meetings, right. So it’s smaller meetings, but with a lead time, that is maybe 2, 3, 4, or 5 days instead, you know, meetings of 50 to 100, persons, for two to three months out, and even these bigger ones are coming on a shorter notice. So I think the number of requests are actually increasing currently, it’s because we’re coming out of this pandemic. And you know, people want to sit together again. So I believe that we are sort of forced to think differently now. Because the revenues that we used to have, coming in slowly, are coming in more rapidly in a way for meeting and events. People, we’ve heard that now, you know, in Berlin and Amsterdam in Brussels that we have bigger and bigger events, people want to gather again, and it’s all it has to happen fast and quick. So that’s also a change.
Trevor Grant
So the trend of booking these things quicker, then suddenly the information that we’re getting there could be of much greater value than it was probably perceived before. Would that be fair? Would you agree with that?
Henrik Karlsson
I would agree with that. I mean, it’s, I think it’s also about pricing. Because, you know, a hotel room, you can change the price of a hotel room up to 10 times during one day. But you don’t do that in the meeting and events industry meeting, for the requests, conference requests, because it’s too difficult there. There are no systems to support that. And that’s not how we work with it. But then, of course, there is something else that is maybe even more important than changing the rates, it’s actually utilising your space, to fill your hotel in the best possible way. Fill your conference rooms with delegates and make sure that no rooms are empty, more or less. If you want to be successful in that, that work is something totally different than being rooms revenue manager.
Peter Brauer
Yeah, I agree. I think also, we’re coming out of this pandemic, and getting these requests and we’re over excited, you know, get it in, first come, first serve. Then we have to get into into the mode again, as before that we actually start even yielding. I think, depending on your destination, it can be done with the meeting rooms as well, again, because the demand is increasing in a very positive sense. On top of that, I think there is very willingness to pay. I’m not saying that they will spend for whatever, but we can be a bit more aggressive on rates as before, because you know, these square metres that we are selling, are square metres that are of much interest to a lot of companies that want to have meetings outside of their traditional own offices for the moment – it’s something that they’re willing to pay for.
Trevor Grant
Is there an industry defined benchmarking metric? I guess you have a metric that you are getting hotels to report to? Is there an industry defined metric? Or is there just a metric that you use yourself from a reporting point of view? Or maybe they’re one of the same? Maybe you’re defining the metric?
Henrik Karlsson
I hope so. I mean, I don’t know if I dare to say that revenue per square metre is an industry benchmarking defined metric, but I think I actually dare to say it, because I think that’s being more and more known now, and it’s more and more people are talking about revenue per square metre, and they understand that that is the ultimate KPI for a conference venue or for your conference department.
Peter Brauer
I think there’s a lot of common ground to be found for revenue per square metre and it’s something that is, I wouldn’t say super easy to calculate, but it makes sense how to calculate if you put the right parameters in place. And it’s very easy to understand because there’s other parameters, I mean, there’s just so many we can come up with you know, occupancy per square metre or like the cost per square metre, whatever or meeting room occupancy? There’s a lot of things that you can you know, benchmark yourself with, but ultimately, I agree with with Henrik, revenue is revenue, money is money and and the square metres are fixed.
Trevor Grant
In a sense, if you’re going to start off with a core metric, you need to have it as simple and as less variable or variable as possible, isn’t it?
Henrik Karlsson
Just revenue in hotels we divided with available rooms? Here, we are divided in some other availability that we have. And what is that? Well, that is space and space, it is counted in square metres. So that’s where we are.
Peter Brauer
Yeah. And also, I mean, in a way, like hotels, you know, with the square metres, it’s in a way, it’s real estate, right? If it’s a hotel room, or a venue, it’s real estate, in any form. And the value of real estate is always sort of calculated by the square metres. And if you want, if you buy a house or anything else, it’s a square metres that counts. So why not do that with an event right, or with a meeting with a meeting space, it’s the same, it’s the same story.
Trevor Grant
Looking at hotels that you work with Henrik, that have conference meeting and event space, I guess all of those are feeding you information about their rooms, because you’re working with them as clients. Just looking at the ones with meetings and events, have you got them all on board to be reporting their meeting and event revenue per square metre, as well? Or is that still a bit of an uphill battle?
Henrik Karlsson
We’re still working on that, far from all of them are using the conference trends, as our tool is called.
Trevor Grant
And Peter, I mean, you’re obviously you’re obviously seeing it from a different side of the equation, but hotels that you’re working with, from a Get Into moRe, I assume this is probably also conversations that you’re having about how they are evaluating a key performance metric.
Peter Brauer
Yeah, the good thing is that within the tool, we have this KPI already there, revenue per square metre, it’s there. It fits, at least it’s visible for our users. And there’s a lot of willingness of our users to have a benchmarking with others, as well. And you talk to all of them, they say, yes, yes, but individually, in the end, there is no seeing through to it when sharing the data, which we so easily do about the rooms, because they are calculated differently, and that is a bit of a pity, because in a way, we also don’t know, all the time if the room revenue is calculated correctly. So there comes a time you just have to get started with it. And, the more you have at least some of them that start with it, the better it is. I think there is the conflict, they’re all convinced about the parameter, revenue per square metre, and I think that the next step is also to report this and get them going with it. I asked also a couple of details like, Is it a cost of participating that is the issue? And they said, no, no, it’s more that it is another thing to do. Whereas actually, it’s not that difficult to do, right? It’s it’s just the square metres are there in the tool, and then you just put in the revenues? And that’s it.
Trevor Grant
I guess that leads me to a question, I guess if they don’t have a solution that calculates it and can provide that information to a benchmarking organisation, then it just becomes an internal calculation, which could be of value, but it’s going to be hard to get it in a benchmarking perspective, isn’t it?
Henrik Karlsson
Yeah, and you wouldn’t be able to compare it to the market. I mean, you know what you what you did in your own venue, but was that good enough? I mean, how is the market doing in general? What if the market is increasing 15% and you only 5%? Yeah, you would have that five but then you actually lost 10. And you know, sometimes it also feels like some venues are a little bit afraid of the truth.
Peter Brauer
It’s like an ostrich, you know, like, I don’t want to know. It’s true, it is a sort of a threshold they have to pass in order to. And and I think, what would be interesting, you know, if they would have market insights for the whole market, I think choosing your competitors is always never easy, right? Even if you’re like in with the hotels, there’s so many indicators. And there’s so many opinions about who is the main competitor. And I think that is also the challenge, I think, with venues and meeting and events. Who is our competitor? Right? And do we want to have that benchmarking with that super deluxe hotel, you know, couple of blocks away from us with a super product? On the other hand, you don’t have to be the best, right? I mean, if you say I’m happy with an index of 80 versus 100, that’s my position. Fine.
Henrik Karlsson
If you dropped to 65, you know that you did something wrong. Do you want to know that you’re keeping your position? You know, the best thing would be if you’re also increasing.
Peter Brauer
And what I believe as well, when it comes to benchmarking, I think, and even with rooms, or meeting and events, I think that the best way to look at it is also on a broader scale. You know, if you compare yourself that revenue per square metre, with all the venues in your city, because we don’t know where they asked requests for, right? I mean, if venue organisers made a inquiry, they send it to 40 hotels, maybe, or 25? We don’t know. But you’re always in competition with a lot of other properties. And therefore, I think the threshold is gets lower when you have a broad variety of competitors to compare yourself with.
Henrik Karlsson
Exactly. I also encourage the venue’s to look at more like market data. I mean, we have almost 100 venues in Sweden reporting. So of course, you don’t have to look at all those 100. But at least, you know, make it like 10 or 20, or something when you get to the broader picture.
Peter Brauer
Yeah, because you’re not competing only with Stockholm. It could be competing with a hotel or a venue I don’t know anywhere in Sweden. So I think that makes more sense as well. Definitely.
Henrik Karlsson
Geography is not fixed in the meeting and events industry as it is in hotels. You go to stay in the hotel because you want to go to that special area or that setting or so. But a conference request, it can be sent to many different cities, because it doesn’t really matter where you go, you just want the right venue with the right price.
