Increasing group event business is a win-win for your venue, because it can increase revenue and improve operational efficiency. According to the CWT 2019 Meeting & Events Trends Report, group bookings can save 22% less time on sourcing and an additional 22% on negotiated savings on room rates. By developing a consistent schedule of group events, you can drive hotel group sales, increase overall revenue, and grow your customer base thanks to these five group business revenue strategy benefits.
Discover why it pays to invest in a group business revenue strategy for your venue:
1. Reduced the need for discounts
Counting on transient customers can leave the best hotels with empty rooms and reduced rates. When you have group events, attendees reliably fill more rooms, leaving fewer vacancies — and less reason to discount rates. That means you can keep your hotel full while earning higher per-night fees. Not to mention that a sold-out property creates opportunities for more incremental revenue, such as food and beverage and spa services. And over the year, those seemingly small differences in rates and other earnings can add up to a big difference in revenue.
Build your group business revenue strategy with the best technology
2. Achieve a lower cancellation rate
Leisure travelers often cancel their hotel reservations — because of illness, a change of plans, bad weather, or a lower-priced room at another property — but entire events are rarely canceled. Plus, people are less likely to cancel a trip for a business event than a vacation or family visit.
When hotel group sales account for a significant portion of overall bookings, your property will likely experience lower cancellation rates. Frequently, this translates into greater overall certainty and higher annual revenue. Additionally, your property can more accurately forecast room bookings, enabling you to streamline staff scheduling, improve efficiency, and increase profitability.
3. Increase up-selling opportunities
While you offer group discounts on guest rooms, event attendees typically spend more per room than other guests. Many attendees choose to upgrade to a suite or a room with a view. Others come a day early or stay through the weekend. And almost everyone grabs dinner or drinks with their fellow attendees at some point throughout their stay. Because many attendees often reserve rooms on shoulder nights, group bookings give many opportunities for selling additional services, such as spa treatments or rounds of golf. Strategize how to sell meeting space to various groups to generate even more hotel revenue.
4. Lower operational costs with group business
When you book an event, you earn revenue from the group booking with a single buying decision. This means less marketing and sales time to land a large amount of business for that time period. It takes a lot more effort from your staff to earn the same amount of revenue through single-room bookings.
5. Drive repeat business
According to Invesp, acquiring a new customer costs five times more than keeping an existing customer. Many leisure travelers don't go on vacation to the same spot every year. But many events will go back to the same venue — if they have a good experience with the facility and service. As a bonus, attendees who have a good experience may return to your property as leisure travelers in the future! By capitalizing on "bleisure" travelers — those combining business and leisure in a single trip — hotels can increase group business by appealing to multiple market segments simultaneously.
The importance of group business
Although it’s not technically required, most hotels offer group room blocks to planners and organizers seeking to book multiple guestrooms for specific dates at one time. However, as the notion of what constitutes group travel evolves, many hospitality professionals have shifted how they view and approach group business. Increasing demand for luxury adventures, multigenerational gatherings, and immersive cultural experiences has allowed even the smallest, most remote hotels to get their heads in the group travel game.
If you haven’t already, consider making group business a key component of your hotel sales strategy, as it has the potential to—
Generate valuable revenue
Like many other market segments, group travel has rebounded recently, reaching—and in some places surpassing—pre-pandemic levels. From corporate retreats to family reunions, hotels should anticipate receiving inquiries and proposal requests from a broad spectrum of group types, with private group travel expected to 2024 trends.
Research indicates that 61% of Americans want to travel with small friend groups or extended family. Thanks to significant growth in multi-generational group travel and ever-increasing demand for authentic experiences, hotels have an exciting opportunity to attract a growing demographic with fewer budget limitations.
Build a contracted business base
Early-booking groups are a fantastic resource for hotels seeking to drive pace, occupancy, and rate. By booking group blocks, particularly far before arrival, hotels can lock in a portion of contractually obligated reservations at an agreed-upon rate, providing a predictable, safe business base upon which to build.
If 20% of your hotel’s inventory has been contracted to groups at a discounted rate, you can bank on reaching 20% occupancy levels across the contracted dates. With that knowledge, hotels can strategically raise rates on the remaining rooms, consistently increasing the price as demand grows. Increase occupancy and drive rate by making hotel group sales a key component of your marketing plan.
Improve hotel performance forecasting
Are there major attractions nearby that draw tourists to your destination seasonally? Do private groups flock to your area for cultural adventures or fun in the sun? Does your destination host youth or professional sports tournaments annually?
Powerful demand drivers, like repeat events, can bring significant group travel to your area year after year. Understanding when groups travel to a particular area and why can help hotels better predict demand and travel trends.
Drive off-season occupancy
Many hotels restrict inventory and group availability during peak season and blackout dates. This helps protect rate integrity, ensuring the property captures as much revenue as possible. However, focusing on hotel group sales can help your property thrive during the off-season or lower demand periods.
- When does your hotel experience an occupancy slump?
- What groups could you attract to help fill that gap?
- What sports are in season during that time?
- Are any collegiate or fraternal organizations meeting?
- Do you offer wedding and event services?
Look for reunions, conferences, athletic functions, and other special events to increase hotel occupancy—even when business isn’t booming.
Foster strategic partnerships
While attracting more group business benefits a hotel’s bottom line, it’s also a practical, strategic way to build relationships with companies, organizations, and other hospitality professionals in your community. Work with brands, influencers, travel agents, and destination marketing organizations (DMOs) to cultivate a network of trusted local travel partners that provide one-stop group shopping.
Ways to increase group business
Every property, from massive to minuscule and from full-service to select-service, has group business potential. Whether located in the heart of a bustling city or the quiet countryside, the right hotel group sales strategy can drive more room block business to your front door. Institute these best practices to supercharge your sales plan.
Utilize data
Take advantage of Big Data and hotel business intelligence software to learn more about the groups coming to your area and what they want. With real-time data analysis, hotels can uncover planner sourcing habits, group demand drivers, and more.
- Where are planners sourcing?
- What do they want in a hotel?
- Which properties are responding?
- What are they quoting?
- Which hotels are winning?
With automated data collection and analytics software, hotels can closely monitor the competition, shifting their strategies to improve RFP performance and increase group business. Leverage valuable market information with Cvent’s suite of business intelligence tools, Google Analytics for hotels, and other data-driven systems. Analyze reporting to identify behavioral patterns, determine which ads attract the most engagement, and identify which group marketing strategies are the most successful.
Streamline the booking process
Create a streamlined customer journey that seamlessly guides travelers and event organizers through the booking process from start to finish. Invite planners and travel organizers to explore your hotel virtually, peruse group packages, and check out what former clients had to say.
At various touchpoints, highlight hotel features, amenities, and services. Showcase meeting room diagrams, group-friendly facilities, and room block management tools, like Cvent Passkey, which puts planners in control of their rooming list. Demonstrate to decision-makers that your property makes group booking a breeze.
Offer customizable group packages
Personalize the sourcing process by inviting travel planners and event organizers to customize their booking packages. Allow decision-makers to select room types, meal plans, transportation, and onsite entertainment, encouraging them to add everything they need without paying for anything they don’t. Entice planners to choose your hotel by including complimentary meeting space for groups who book enough rooms, offering double planner points to tournament coordinators, or giving the group contact a surprise room upgrade.
Learn how to sell meeting space to groups by uncovering their gathering needs. Do you have a team coming in that needs space to dine together? How do you incorporate event space in wedding block offers? Create customizable packages that include event space to accommodate groups that need a place to meet, work, or warm up.
Bring your group sales strategy to life
Now you know why a group business revenue strategy pays. To learn more about why meetings and events are so important and how to make them even more profitable, check out our group business solutions for venues. Then, discover the latest group business trends.
