Major Events Don't Have to Mean Major Headaches
By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | November 03, 2013
When major events come to town, such as international sporting competitions or cultural festivals, they often offer unique opportunities for hoteliers to capitalise on increased demand, gain a new loyal following of customers and maximise revenue both over the short and long -term. Yet while major events come with huge potential rewards, if not executed well, they can be very high risk resulting in anything from displacing current loyal customers to a hotel full of empty rooms, or from no-shows to cancellations. Hoteliers may find themselves asking questions such as "Will we manage to capitalize on the increased demand for our rooms? Will we be able to balance the demand for event attendees willing to pay higher rates while also maintaining our existing customer base? Will this fabled demand actually materialize, or will our rooms remain empty throughout the event?"
For events to be executed smoothly, and most importantly to optimize profitability, hoteliers need to consider a variety of factors, including effective marketing and sales strategies, pricing, forecasting as well as restrictions that may or may not be enforced. The following strategies will help hoteliers be confident that before, during and after the period of the major event, they will be able to achieve their overall revenue potential.
Start with the Basics
The first step in forming an effective event strategy is to start with some research. Check how long the event runs for and how long guests may want to stay. For example, will guests want to stay for a few days of the event, such as checking out a few games of the two week Australian Open Tennis tournament, or is it the type of event where guests will want to stay for the entire duration, for example a major conference?
Next, look at how demand will be affected in the days preceding or following the event. For example, during the 2010 South Africa World Cup each town hosting significant matches needed to focus not only on the day of the match, but also the days preceding. If the World Cup final was to be held on a Saturday night in Johannesburg, hotel owners and hotel managers in that city needed to pay particular attention to demand in the days leading up to the match, starting as early as Wednesday or Thursday.
Forecasting and Segmentation