Attention revenue managers: pay no attention to that ballroom behind the double doors.
Only, what if we told you that your hotel’s meetings & events (M&E) space could become the largest slice of the revenue pie for your property? For many hotels, this idea is not so farfetched when you run the numbers, yet for some reason, revenue managers overlook this significant opportunity to boost their impact. Guest rooms are, of course, the lifeblood of any hotel, but the time has come to expand the scope of your hotel’s revenue strategy, and the next target should be your M&E space.
Shift the Paradigm
First, get yourself some executive backing. Despite its significant moneymaking potential, function space has historically been viewed by hoteliers as a second-rate profit producer, only there to help fill guest rooms. A cultural shift is in order, with resources properly allotted and aligned to give your plan some legs. Convince your hotel’s key decision-makers and stakeholders to agree an M&E revenue strategy is just the thing to increase your hotel’s total revenue performance.
With leadership’s blessing, it’s time to apply some good old revenue management philosophy. If you’re a seasoned RM, you’re in luck because many of the tried-and-true guest room revenue principles apply to M&E as well. No need to reinvent the wheel. You’re just kicking a different type of tire.
Forecast True Demand
Like your guest room strategy, the secret sauce is the data you collect and your ability to use that data to accurately predict the future. The better the data, the better the demand forecast and the more confidence you can instill in your sales methods. M&E salespeople often have the bad habit of booking their available space on a first-come, first-served basis without assessing the likelihood of more profitable business interest that’s just around the corner. This is where demand-based pricing can really make a difference, but it takes a demand-based forecast for this strategy to work properly.
