Dynamic pricing is vital for hotel success today, but only some operators can see beyond the guestroom when applying this technology.
NB: This is an article from IDeaS
Many factors impacting guestroom dynamic pricing, like seasonality and occupancy, also play a role when optimizing event revenue. Using advanced revenue management technology, hotels can accurately adjust rates for events in real-time as group business fluctuates from month to month.
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Modern revenue management technology allows operators to take a similar approach to their guestroom operations strategy when improving event revenue without concern they are missing out on potential group revenue.
Group business has traditionally been built from steep discounts and block rates, which help drive group bookings and indicate potential demand before an event. Revenue management technology can recommend ideal rates for each group offering without compromising returns – and often automatically. This allows groups to be more than a means to drive up the value of adjacent bookings made near an event and a reliable source of booking revenue.
Hotels need access to accurate demand forecasting technology to tap into these capabilities. This technology enables them to segment guests into groups based on capacity, amenities and other attributes. Hotels must also monitor their competitors’ rates as accurately as possible and adjust rates based on booking lead times. These capabilities require a united data strategy and a tech stack capable of trading information between departments. Additionally, hotels must have access to robust data visualization capabilities, allowing operators to quickly identify actionable trends before confidently making decisions.
Selling and Selling
The key to dynamic pricing is understanding when to offer the right upgrades during the booking process and how to value them at the moment. For decades, these strategies have informed successful dynamic pricing for hotel guestrooms and the airline industry and are also applicable to group business and events. By offering upgrades or additional services at the right moment during the booking process, hotels can improve a guest’s event experience and expectations while boosting earning potential and informing future decision-making.
What could that look like in practice? Event organizers typically look to book catering services, audiovisual equipment, additional meeting rooms, and even accessibility features along with their desired event space. Allowing guests to select these elements during the booking process effectively ensures they get the service they seek. Revenue optimization technology is impactful during this stage because it allows operators to track the value of each offering and adjust its price based on availability and necessity.
Revenue optimization tools can also help operators identify more effective ways to allocate space for different events, ensuring the most significant potential availability for bookings. This includes factors such as the size of an event, its duration and overall earning potential compared to other events.
Lastly, once hotels identify the most impactful amenities, upgrades and offerings associated with their event space, operators can then offer free, discounted or preferred access through their property’s loyalty program. The ability to track these trends is an impactful tool for funneling more business into your hotel’s loyalty program to increase data gathering and guest retention over time.
These capabilities sound great in isolation, but if a hotel is going to address each of its use cases manually, its operations team will find itself bogged down in minutia. Revenue optimization technology can update a hotel’s guestroom rates hundreds or even thousands of times per day based on the size of a hotel, its available guestroom types and demand trends. Operators increasingly rely on automation to reach this level of speed and sophistication for room rate optimization, and the same will be valid for optimizing revenue management for event spaces.
Hoteliers must seek to understand the basis of event demand in the context of new business and the ways the hotel industry is evolving. More companies are embracing mixed meetings due to remote work trends, while others are embracing an entirely in-person approach following months of social distancing. Understanding these trends and how they rapidly develop and influence travel and event bookings is challenging, but doing so hundreds of times manually each day is impossible. Leveraging revenue management data and automation can simplify this process, allowing operators to make decisions based on market dynamics without becoming overwhelmed by the process.
Due to emerging trends, event space revenue optimization is new ground for much of the industry, and only some know what to look for when optimizing this space. Instead, operators must turn to data visualization tools to gain actionable insights. Doing so will lead hoteliers one more step toward total revenue optimization, with the return of events leading the charge.