Hotels understand the importance of building strong relationships with meeting planners. They encourage their sales team to be creative with coming up with solutions, flexible in meeting execution, and transparent with their transactions.
However, hotel group sales is still — at its core — a business. On-property and above-property sales executives still have a bottom line to look after. And hotel sales directors will continue to maximize their meeting revenue using several strategies, most which go undeterred by corporate event planners and other meeting professionals.
Here are five hotel group sales secrets and tactics every meeting planner should know.
#1 They will try to move your event if a more lucrative piece of business comes along.
A common phrase used by hotel sales leaders, especially at large hotels, is “It’s not what you sell, it’s what you move.” Groups are booked within different booking windows, but sometimes a second meeting planner will want dates that another event has already booked. If the group sales manager believes that the second event can bring in more revenue, he or she will attempt to adjust the dates of the original meeting.
One way to avoid being bumped for a more lucrative event is to work a “no move clause into your contract.
But what if you didn’t include the clause in your contract and the hotel asks you to move your event dates? If you’re flexible with the hotel, you could create an opportunity to negotiate concessions that can improve your bottom line. Depending on how valuable the replacement group is and your level of flexibility, you could possibly reduce F&B costs, find dates at a lower room rate, or have the hotel issue a dollar-for-dollar credit to your account.
#2 The hotel’s discounted rates can lead to attrition.
It’s a common frustration: You agree to an attrition penalty with your hotel, promising, for example, that you will fulfill 80% of the contracted rooms. Afterward, the hotel then promotes an even lower rate to their leisure guests. Attendees at “user pay” events usually look for the lowest price, and if they find these leisure rates, you may end up with a bill for attrition.
Combat this by asking for a “no lower rate” clause that blocks the hotel from offering any rate lower than your contracted group rate. This works best when your event takes up a major portion of the hotel. Also, complete a rooms audit for the period of your event. Have the hotel match the guest register to your event registration log to ensure you get credit for all the rooms you have supplied, even if your attendee booked a leisure rate.
#3: Hotels charge more based on your meeting space to guest rooms ratio.
Every hotel has daily revenue goals for both their guest rooms and event space. If your event takes up too much venue space and not enough guest rooms, the hotel will be left with an excess of room inventory they then have to sell to transient customers.
If your event takes place during one of their slow seasons for leisure reservations, they may propose a higher rate to your group to make up for those lost room profits.
#4: They may have paid incentives to your third-party planner.
Hotels often pay commissions and incentives, such as complimentary stays or frequent traveler points, to third-party planners when they book a group at the property. Hotel incentive programs may have a large influence over a third-party planner’s biases and preferences, regardless of your event goals or your budget. Some intermediaries have only limited market knowledge and frequently suggest a handful of hotels they know or receive incentives from, which limits your venue choices. Pro tip: Ask for honesty and transparency from any intermediary you employ and make your expectations clear.
#5: Your group’s travel pattern can affect your rates.
The length and days of your event matter. Groups usually have a three-day meeting pattern: Check in, meeting or event, then check out.
Since groups typically fill in holes around business travel, corporate event planners will find the best rates with a Sunday to Wednesday or a Wednesday to Saturday pattern. If your pattern runs on weekdays only, such as Tuesday to Friday, you will throw off a hotel’s schedule. Your peak day with the highest occupancy could overlap with another group, which means the hotel may charge higher rates for the inconvenience and the extra work involved to run both events so close together.