Group travel plays an important role in your revenue management strategy. Group bookings are a powerful force, as it allows you to capture a chunk of travellers while only paying distribution and marketing costs for one booking.
NB: This is an article from Little Hotelier, one of our Expert Partners
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Business groups often travel to a particular location for meetings or conferences, and may be interested in staying at your property. Family groups will book for family reunions or multi-generational travel experiences.
Travel groups, such as clubs or volunteer organisations, prefer to book authentic, local accommodations that allow them to immerse themselves in the local culture. By appealing to all of these groups, you will be able to boost revenue and increase customer loyalty.
How to set a group rate at a hotel
Certain groups, such as tour companies and business travellers, will know exactly how to get a group rate at a hotel, so as a hotelier you need to know how to set your group rate in a way that wins you this group booking business.
The following three steps describe the basic process.
Step 1: Do your research
Work to understand what groups are willing to spend. Group booking professionals like tour providers will tend to have higher discount expectations, and be better negotiators, than one-time event bookings like wedding parties. And get a sense of your competitors’ group booking prices, perhaps by sending them a semi-anonymous email and asking for a quote.
Step 2: Identify your break-even point
The most basic formula for setting hotel room pricing – group booking or otherwise – is break-even point + profit margin = price. Whatever group rate you end up setting, it needs to make you money. Identify your per-room break-even point and ensure you don’t go any lower.
Step 3: Decide your profit margin
Having understood your break-even point, and uncovered what competitors are charging and what the customer might be comfortable spending, you just need to decide the level of profit you should plug into the formula above.
Group booking requirements for small hotels
The top features that travel groups look for in a hotel include:
1. Simple online booking process
Coordinating the logistics for group travel can be daunting, as there are many individual reservations to make for one larger group.
By offering a simple online booking process through a reliable online booking engine, and partnering with online travel agents through your channel manager, you can improve your group booking rate.
