MICE Boosts Hotel Revenue
By Korosh Farazad, Founder and Chairman of Farazad Group of Companies
MICE, which stands for Meetings, Incentives, Conference/Conventions and Exhibitions/ Events represents the niche hospitality market that is being adopted increasingly in the corporate world due to its ability to inspire employees by providing accommodating environments and tailor-made services. MICE is a profitable source of business for many types of operators in the hospitality industry. It is one of the fastest growing segments in the travel sector which generating millions of dollars in revenue every year.
The latest Convention Industry Council report claimed that 85% of meetings in the U.S. are conducted at venues with lodging, generating more than 275 million room nights annually. MICE has been essential part of tourism business for decades. According to Amara Marketing 2018, expenditure of MICE travelers is much higher than leisure travelers. 54% of all business trips made are MICE trips (UNQTO 2014).
Millennials/Generation Y are the main driving force behind such trends which are in line with their preference for efficiency and connection across communities. To seize this trend, hotels are implementing innovative meeting planners, professional conference services staff and are developing programs to add new dimensions into the overall meeting scheme to better off from the hotel intense competition.
"Unfortunately, hoteliers spend far too much time and energy drafting proposals, and as a result, lose other opportunities in the pipeline. Most hoteliers need one useful platform that can take care of their MICE business needs - from generating demand to managing it," said Sunny Arora, Product Marketing Manager at Cvent. "Therefore, hoteliers need the right strategy to helps a business determine its product and market growth strategy and provide competitive advantage and attract MICE tourism clients in order boost the revenue."
Kotler's Five Product Level model
According to Philip Kotler, who is an economist and a marketing guru, a product is more than a tangible 'thing'. A product meets the needs of a consumer. The customer will only be satisfied when the specified value is identical or higher than the expected value. Kotler's Five Product Level model in Figure 1. provides businesses with a proven method for structuring their product portfolio to target various customer segments. This enables them to analyse product and customer profitability in a structured way.
- Core product: Basic product. The focus is on the purpose for which the product is intended. In this case, you go to the hotel to sleep, the hotel sells room. That's core!
- Generic product: This represents all the qualities of the product which means the physical form of core benefit. In this case, hotel has beds and bathrooms
- Expected product: Product attributes that buyers expect to get when they buy the product. In this case, guests expect clean rooms and towels
- Augmented product: Augmented product is when the competition starts. It is an additional factors of the product that differentiate the business, that is, its brand identity and image. For instance, designs, free breakfast and additional facilities. Something that is beyond expectation to satisfy all guests.
MICE is falling in an augmentation product to already existing products and services hotels have to offer. Instead of using all the space for hotel rooms. Having or creating a function space for MICE at your hotel allows you to attract a constant streams of professionals and business travelers for the whole range of different purposes and visitors.
- Potential product: This is the additional augmentations and transformations that the product may undergo in the future
All in all, hotel meetings and events are great way to boost the revenue. It is the keys of extra bookings in the hotel itself which mean greater profit. MICE is also the additional perfect opportunity to build the reputation and long term valuable growth of the hotel.
As the acting CEO of Farazad Investments (FI), Mr. Farazad, asserts market integrity and an unconventional approach to Structured Financing. He was awarded by the IAIR Awards as the ‘CEO of the Year for Structured Finance Europe Middle East & Africa (EMEA)’ 2015, and awarded with the ‘Best Structured Finance Company 2015’, by the European CEO.More from Korosh Farazad