Group business represents a significant portion of many hotels’ revenue, but smaller hotels and motels often lack the meeting space to go along with a room block. However, there still are numerous ways that hotel owners can attract group business and cash in on this lucrative sector of the industry.
Small Meetings on the Rise
As pandemic recovery picks up speed, smaller meetings are the first to return. According to a recent Global DMC Partners survey, 75% of planners expect to hold face-to-face meetings in 2021, but 67% of these meetings will host fewer than 250 attendees.
By capitalizing on the return of these smaller groups and meetings, small and independent hotels can increase occupancy, create consistent and predictable revenue, and speed their post-pandemic recovery.
5 ways to increase group business
Planners often source smaller hotels thanks to their lower rates, proximity to venues, complimentary breakfasts, happy hours, and free parking, which all add up to significant savings on their overall spend. Here are five ways to attract more of this group business to your property.
1. Consider groups that don’t need meeting space.
Groups that need room blocks but not meeting space include sports teams, wedding parties, religious organizations, fraternities or sororities, military, family reunions, parents and guests for graduations, and students and their families moving in and out of colleges and universities.If you have an on-site bar, restaurant, or café, these groups will drive ancillary revenue in addition to the room block.
2. Make the most of the space you have.
Hotels with a cafeteria or lounge area could transform the open space into an informal reception area. Given the ongoing pandemic, many planners have opted to set up events on lawns and other outdoor spaces.
3. Cultivate local business relationships.
Hotel managers can form ties to local event venues, meeting spaces, and convention centers for group referrals, as well as hotels that could refer any overflow.
Join and advertise with a local CVB to boost your visibility to incoming groups. Hotel managers also can join the city council, mayor’s advisor board, and other professional groups that widen your referral network.
Partner with transportation companies. Hotels can add value to their group packages by offering shuttle service to and from the event venue or convention center, as well as key points in the surrounding city.
4. Reach out to part-time planners.
Many executive assistants, office managers, and human resources personnel plan multiple smaller events and meetings each year, but planning is only one of their many tasks.
The best way to reach them is through direct email campaigns and advertising in publications aimed at groups such as the American Society of Administrative Professionals, the Association of Executive and Administrative Professionals, and the Society for Human Resource Management.
5. Automate manual tasks.
Given the current lack of staff at hotels of all sizes, managers who implement technology can book more business, while freeing up time and energy. Consider platforms that streamline digital RFPs from prequalified planners and offer instant online booking for groups.
Hotel staff can also implement room-block management software that allows group guests to book and manage their own reservations online. Any initial learning curve on these kinds of tools will reap a significant return in saved time, reduced labor costs, and increased income.
Implement Financial Protections
When a group represents a significant portion of the overall hotel room count, managers should ensure they have adequate contractual protections to shield them from the inherent financial risk.
- Attrition clauses allow for a certain percentage of rooms in the room block to go unsold without financial penalty. This incentivizes the planner to fill the block and protects the hotel from lost revenue from unsold rooms withheld from inventory.
- Cutoff dates for room blocks are usually 21 to 30 days before the group actualizes. Any rooms not sold by that date are returned to inventory and sold to transient travelers or other groups.
- Cancellation policies ensure that any group that doesn’t actualize at all will lose their nonrefundable deposit.
If your hotel is integrated with an online group booking system, the booking process should include a standard terms-and-conditions clause that outline any consequences for cancellation.
At the same time, hotel managers should be as flexible as possible with planners who might need to make last-minute changes given the ongoing uncertainty around the pandemic.
Be Mindful of COVID-19 Protocols
Even as the pandemic begins to recede, travelers still expect a much higher level of cleanliness. Meeting planners and group organizers have additional needs and concerns that go along with bringing people together in a public environment. If you haven’t done so already, implement stringent cleaning protocols and consider property improvement plans (PIP).
Current hotel practices include:
- A clearly communicated cleaning regimen in rooms and public spaces
- Masks on hotel staff to protect guests
- Automated processes such as check-in and checkout when possible
- Prepackaged food and beverage offerings
- Clean filters in packaged terminal air conditioners (PTAC)
- PIPs and renovations to remove room carpeting and improve ventilation by installing more robust HVAC systems, more modern PTACs, and commercial-grade air purifiers
The hospitality industry will continue to recover, so now is the best time to position your hotel and motel properties to make the most of group revenue as meetings and events get back to business.
Originally published in Today’s Hotelier.