Group bookings are always the first to suffer in a downturn, but these events can’t stay down for long. As aspirational as it is, travel remains a primary goal for consumers in 2024. According to a recent study from Hilton, consumers plan to spend more on travel in 2024 despite increased costs. The question is: Are hotels ready to accommodate groups?
NB: This is an article from IDeaS
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The problem isn’t room availability. Hotels scored record rates during the summer travel season, but occupancy has yet to peak. This is particularly true for group business, which has wildly evolved from its pre-pandemic excesses in many ways. Traveler booking decisions have become unpredictable, and few hoteliers today can claim to reliably predict group travel trends going forward – that is, without access to modern data analytics informed by revenue management.
Technology has played a significant role in establishing new group booking forecasts for several reasons. The group booking cycle is significantly longer than other travel cycles. While it can be rewarding for hotels to pursue a long-term group booking strategy, it takes time to develop reliable forecasts to pursue this business. Several factors impact group travel, including timing relative to other events, room availability, traveler schedules, and local and global trends.
Emerging trends in traveler behavior have also necessitated the adoption of new technology and strategies. Lead times for group bookings have been halved, particularly for smaller groups. With less time to research groups, plan itineraries, develop an appealing package, and market it to guests, operators have less flexibility than ever before when adapting to potential new business. Amid increased pressure to execute, operators rely on revenue management technology to provide the insight needed to accommodate new business bookings.
Hoteliers must approach ancillary revenue with enthusiasm to continue growing profitability. To do this, hotels are encouraged to conduct a complete displacement analysis to weigh the value of different group booking scenarios, such as the number of guests per booking, their length of stay, the purpose of the group’s trip, and whether or not the group is purchasing additional event space or amenities in advance. Once operators can incorporate room revenue and typical ancillary spending into their demand forecasts, they can more easily assess the value of business being displaced by group bookings of varying sizes.
Also, hotels should consider technology that helps merge sales and catering platforms or at least provides the ability to interchange data. Information from these departments can provide revenue optimization teams with a more complete picture of the group booking cycle. Using this information, hotel sales teams can rely on faster, more robust evaluations of potential business while confirming guest needs with sales and catering within moments. Over time, this technology will be necessary to improve group function space technology across hospitality.
Streamlining the Group Business Process
Hotels must also simplify the process of evaluating and pricing potential group business. Automated small-group pricing evaluation can help attract more bookings by reducing the time needed for review from the hotel’s commercial team before closing. By using revenue management technology to provide an optimized group price based on the number of attendees, hotels can improve their response time for small group opportunities and increase occupancy more consistently.
Automating small group pricing allows hotels to make incremental gains in booking revenue in the long term but also leads to more significant ancillary revenue through smaller groups having access to more impactful booking options earlier. Small group bookings typically hinge on how quickly hoteliers can negotiate an acceptable price. In practice, automated small-group pricing helps hoteliers secure the best possible group deals by speeding up the pricing process.
Put Your Space to Work
What is the value of your hotel’s functional event space? Are you factoring in the value of a guestroom booking, food and beverage spending, and other add-ons such as audiovisual equipment rentals? Today’s technology can help hotels weigh these factors, as well as servicing costs and sales commissions, to help operators quickly discern the actual revenue potential of a given event booking. These metrics can be weighed against transient bookings or other competing events to help hotels chart a more optimized, efficient distribution strategy for groups as the travel space shifts.
With regard to revenue generation, efficiency is sustainability. Reducing the barriers erected between hotel departments with technology tools helps operators streamline the group booking process at a time when business is booming and guests aren’t waiting around. If operators embrace revenue optimization and make it easier to book small groups while identifying their most valuable attributes, hotels can optimize every inch of available square footage—including any space on their booking calendar.