Every hotel is unique along with the strategies that work to fill the hotel. When considering the options that will drive the most revenue, group bookings should play a significant role in your revenue management strategy.
What is Group Business?
Simply put, group business is a signed contract selling rooms and meeting space to corporate or leisure groups. Group rates are typically discounted since the group is purchasing the rooms in bulk guaranteeing X number of rooms or more per night for an agreed date. Targeting group business is the best way to maximize your occupancy with one low negotiated rate.
Why is group business beneficial for your hotel?
Group bookings are about offering the best package rates to your potential guests. This is advantageous to your hotel specifically for the following 4 reasons:
Reduce Operational Costs
When you are running a hotel, every dollar matters—especially when operating with a lean staff or no on-site sales manager. Increasing group revenue for the hotel means that you can spend less time sourcing your hotel and save money on negotiated room rates. By developing a plan to book and rebook group business, your staff will not have to focus much-needed time and effort on marketing and sales for single room transactions.
Predictable Revenue
If the experience was a success, the group or business travelers often return to the same location. Meeting planners and travel managers appreciate consistency and the advantage of having negotiated rates and discounts with hotels. Discounted rates allow travel managers budgets to stretch farther and affords them the ability to rebook with ease the following year and avoid the hassle of shopping for new hotel rates. Also, group business typically books far in advance, bringing you less stress and revenue planning for the coming months.
Trip Add-Ons
Unless the group is traveling just for one day, they may be thinking of extending their trip into a mini vacation. Often travelers extend their trip or come a day early. With the flight paid for by their employer, it’s a great opportunity for the business traveler to invite family and extend the trip to make the most out of their travel experiences without incurring a lot of extra travel costs. This also gives you the ability to upsell additional services that your hotel may offer.
Lower Cancelation Rate
Individual travelers may often cancel travel plans last minute due to illness or change in plans, but it is less likely that a sporting event or business meeting will be canceled. By including group business in your hotel’s revenue management strategy, you can more accurately forecast room bookings.
Considering group business for your hotel will require you to do a deep dive into the data to consider future demand projections along with room inventory. You are going to want to ensure that you book the right piece of business for the right guest at the right time and for the right price. The goal is to make sure that group bookings don’t jeopardize revenue growth but boost revenue and add the potential for future business.