Staying Competitive in the Hotel Group Meeting Market

Maintaining Momentum and Honing Strategy

By Jim Vandevender Chief Marketing Officer, Knowland | September 10, 2017

Selling to the right group segments is important. Achieving the right mix of group and transient is also key to success. The variances in rate structures, for example, for the transient and group segments (often in stark contrast to one another) are key to maximizing revenue opportunities in a high-demand market.

Transient pricing strategies are, of course, designed for individual guests staying at a hotel, whether for business or for pleasure. High demand enables hotels to quickly raise these rates as high as the market will tolerate. More or less, there is almost no limit as to how high hotels can raise transient rates if the demand is strong enough, as long as the hotels have rooms to sell. Effective pricing and the right segment pricing strategies, therefore, allow inventory management to drive ADRs higher and higher. Group pricing, coupled with variances in booking pace, can present rate ceilings that hinder revenue maximization strategies if careful analysis is not applied.

Group vs. Transient: A Strategic Balancing Act

In order to take full advantage of the lucrative returns possible in a demand economy, hotels must make crucial decisions as to what mix of transient and group room allocations will maximize those returns. The same careful consideration of market demand used for transient business has to be applied to a hotel's group strategy and group sales deployment decisions when pursuing the meetings market to ensure the best possible returns on those diligent group efforts. In other words, the group segments a hotel pursued one year may not be the best group segments to go after the next year. For example, a hotel in Chicago that relied heavily on pharmaceutical business may need to reevaluate its group strategy if it notices stagnant trends in its group business and increasing technology and manufacturing meetings going to its competitors.

When demand is high like it is currently, hotels enjoy being in the driver's seat and choosing among the best meeting opportunities that maximize group revenue. Every hotel has a "best-fit scenario" when it comes to a group's date patterns, room nights, space usage, and food and beverage spend. In today's market, a group that requests lower room rates or asks for an unfavorable mid-week arrival, for example, is likely to be greeted by a hotel with an apparent lack of excitement and interest in that meeting opportunity.

Will demand stay strong enough in 2017 to allow hotels dependent on group business to continue being so selective? If it doesn't, how do sales teams rethink their group game plan?

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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.