Group Pricing - Getting the Best Revenue While Keeping Bookings in the Block

By Juston Parker President & CEO, Parker Hospitality Group, Inc. | June 15, 2010

To group, or not to group, that is the question. It doesn't take William Shakespeare to pose the quandary facing many hotels of how much group business is good business and when does a group pose a risk to maximizing revenues at a property. To begin to answer this, we must first uncover the principles that hospitality pricing has always been under.

Hotel Revenue Management has been and many times, still is, under the "department" of sales and marketing and the Director of Revenue, most of the time still reports to the Director of Sales. The Director of Sales has a mandate to fill the house and most sales managers focus on group business, so therefore the thought is "if we want a sales team, we want them to sell and they need to sell group". This then leads to the thought of "take group business and then if we get the transient to fill in the holes". These thoughts are fundamentally unsound and cost many properties hundreds of thousands of dollars.

Let's look at the definition of a group. According to Wikipedia, the word "group" has many different possibilities of usage (see http://en.wikipedia.org/wiki/Group). From group identifiers in Unix to group travel to groups of business, Wikipedia shows 44 different identifiers to "group". Group Travel is defined as:

A set of individuals traveling together and involved in similar activities. There are two types of groups:

  • Individuals usually travel in groups to benefit from lower product group rates. Group rates can be contracted for Hotels, Airlines and other forms of transportation, ticketed events and other miscellaneous items.

  • With that uncovered, let us look at the very root of the word, under Mathematics, group is defined as a set with a binary operation that satisfies certain axioms. For example, the set of integers with addition is a group. What does this mean? Actually, it means and combination of numbers that satisfies a need. Now, do the hotels use this definition? They would tell you no, but I say most actually do. Many hotels identify a group one of two ways, 1) if they have more than "X" number of rooms (many times 8 or more); 2) if multiple rooms also take banquet space and catering needs.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.