By Kemp Gallineau, Chief Executive Officer, Groups360
This week, we continue to tackle commonly held misconceptions in the group meetings industry. We previously addressed the myth that the Lowest Price Always Wins the Business. To continue the myth-busting series of blog posts, we’ll take on A Seller’s Market Means you will Pay More and Need Dates.
Let’s break the cycle of these self-perpetuating myths so they can’t drive a wedge between planners and hoteliers. Stick with us through the series if you want to be amazed! The truth and the data are sitting in plain view.
How many articles have you read recently describing the current environment as a “seller’s market?” All of these articles are describing the difficult circumstances planners find when trying to book a meeting and find “value” for the dollar. To be sure, these are very good times for hotels. That being said, there are many ways to still deliver a meeting that meets your budget and feels like you are getting a value.
The hospitality industry uses the phrase “Need Dates” to describe a specific pattern of days in which a meeting planner has the potential to find better value than what the market typically demands. There are two types of Need Dates. First, there are the need dates that we know about. These are dates or patterns of days mostly focused around holidays, weather (i.e. January in Minnesota), and other unique destination situations (i.e. hurricane season in south Florida). Second, there are specific hotel-related circumstances that may cause the hotel to want to attract groups at very attractive prices.
When hotels talk about their Need Dates or are offering specials, they frequently are in holiday or seasonally affected periods. To know when these periods exist one needs two things: 1) a calendar with major holidays and 2) an understanding of when seasonal group and transient travel are slow. The former is simple. Everyone knows there isn’t much business travel the week of Thanksgiving or around Memorial Day. Business travelers are simply less interested in being “on the road” during these periods. If your group is flexible enough to move your meeting to one of the 50 or so “low demand” days that fit into this category, you are in for a treat. Hotels will typically roll out the red carpet for you.
To discover the unique destination situations, you’ll need a bit of better market intelligence. Frankly, you’ll need a crystal ball. Each market changes significantly week to week, month to month, and season to season. If you are flexible and have the right market intelligence, you have the opportunity to go to the market your heart is set on for a very attractive price. For instance, in Miami, the difference in price between February and September is $150. If you absolutely MUST be in Miami, use our market intelligence to find the best options for you.
Can’t move your dates? Here is the best way to find value ….
In the examples above, the planner can find tremendous value by being flexible moving the date of her meeting. But what if I can’t move the dates of my meeting? Well, there is still hope for you too. New intelligence in the marketplace allows planners to make direct comparisons of markets BEFORE enduring the labor intensive task-of-contacting hotels for pricing. Our tools help the planner identify where they might place their meeting that would fill a natural gap in demand – where hotels are looking for business and are likely to be competitive.
For instance, assume you are a planner who wants to be in Dallas in the third week of September, and you want to pay $170 per room. If you have the right information at your fingertips, you would know that Dallas that week typically runs very high occupancy and a rate above your desired rates. You could go through the laborious task of contacting the 10-20 hotels in Dallas that could hold your program in hopes of finding a needle in the haystack. By you don’t want to do that, do you? That would be a tremendous waste of your time and the hotels’. Hotels in Dallas are unlikely to bend over backward for your group.
Instead, you could look in Orlando, which is similar in weather and airlift to Dallas but is less expensive that week of the year. Or you could look at San Antonio, which runs a much lower occupancy at that time of year and may have more hotels competitive for your business. In either scenario, you, the planner, have a much better chance of delivering a meeting on your $170 budget than trying to force your way into a very tight Dallas market. In either alternative market, the hotels will be likely to roll out the red carpet for you, welcoming you and your business, making you look like a hero.
So don’t fall for the hype. According to STR, in 2015 luxury and upper-upscale hotels ran approximately 76% occupancy. That means on any given night a quarter of the available rooms in the US were vacant. That is almost 40 million room nights annually. If you have the right tools, you can find the opportunities to help a hotel fill some of these rooms at a good value for you.