About your meetings & events strategy—wait, you have one, right?
- It’s time to shift the paradigm from a guest-room-only revenue focus
- The devil’s in the data for creating more accurate, demand-based forecasts
- Boldly price and book function space where no hotel has gone before
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 revenue manager, 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.
Get to know the true worth of each of your property’s M&E rooms at varying levels of demand, and study your group booking patterns for all event sizes and functions. Incorporate turned-down and lost business data for a fuller picture. Ultimately, with your new and improved demand forecast in place, you can encourage sales to be more aggressive when pricing and booking high-demand days and be more relaxed about the low-demand days.
Fill the Void
Another final tip to bear in mind as you refine your M&E strategy: the closer you fill space to optimal capacity, the more revenue you’ll make. This may sound overly simplistic, but math is math, and this is where your space utilization tactics really matter. Avoid putting a small group in a large room. Attendee numbers count, even when you protect space with minimums. Know your room sizes, configurations and capacities. Space management and occupancy-based decisions, however, can be extremely difficult and time-consuming to track manually.
IDeaS has experience rolling out successful M&E revenue strategies, and we’ve built that expertise into a first-of-its-kind technology offering called Smart Space. It’s a cloud-based, user-friendly application that allows you to track inquiry trends, forecast demand, set optimized rates and measure performance of your function space at a far more detailed and scientific level than even the smartest revenue manager with a color-coded spreadsheet could ever achieve alone.
But whether you’re just venturing into the untapped realm of function space or you’re ready to implement a visually intuitive solution like Smart Space, you have our full encouragement and support to get full-tilt, seriously serious about your M&E revenue strategy. It’s both a small step and a giant leap through those big double doors into your hotel’s underutilized space—the next frontier of hospitality revenue management.