The Future of Hotel Events & Groups

By Ron Shah Founder & CEO, Bizly | September 02, 2018

Traditional group commission rates are headed to zero. Marriott, Hilton, and IHG went down to 7% earlier this year. The "writing is on the wall", and there is no going back. To defend their position, the hotel brands will be forced to resist transparency about their group pricing and inventory. Once group inventory and pricing becomes transparent, then anyone will be able to distribute it, and the brands will give birth to another OTA industry. This is the brands' worst nightmare and an outcome that they will avoid at all costs.

In light of shrinking hotel commissions, corporate travel departments will be forced to reconfigure their funding streams, traditional event agencies will be forced to change their business models, and hotels will have to create new distribution methods. Despite the urgent requirement for change, most of the stakeholders are yet to make a bold move.

A number of brands - notably, Starwood, Kimpton, and most recently, Hyatt - have attempted and failed at offering their own "instant booking" group inventory applications. Why have these attempts failed? What these applications offered still wasn't instant, easy, and most importantly, customers want to compare offers across many brands before purchasing.

While it seems that the competitive landscape is nascent and that customers still rely on hotels when they have groups who need a place to sleep; this could change in a heartbeat. Airbnb could easily offer "room blocks" and combine itself with a modern event day space providers like Convene or the tens of thousands of unique venues and restaurants around the country.

So heading into the future, how does the hotel industry position itself for success?

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Coming up in January 2019...

Mobile Technology: The Future is Now

Mobile Technology continues to advance at a relentless pace and the hotel industry continues to adapt. Hotel guests have shown a strong preference for mobile self-service - from checking-in/out at a hotel kiosk, to ordering room service, making dinner reservations, booking spa treatments, and managing laundry/dry cleaning services. And they also enjoy the convenience of paying for these services with smart phone mobile payments. In addition, some hotels have adopted a “concierge in your pocket” concept. Through a proprietary hotel app, guests can access useful information such as local entertainment venues, tourist attractions, event calendars, and medical facilities and services. In-room entertainment continues to be a key factor, as guests insist on the capacity to plug in their own mobile devices to customize their entertainment choices. Mobile technology also allows for greater marketing opportunities. For example, many hotels have adopted the use of “push notifications” - sending promotions, discounts and special event messages to guests based on their property location, purchase history, profiles, etc. Near field communication (NFC) technology is also being utilized to support applications such as opening room doors, earning loyalty points, renting a bike, accessing a rental car, and more. Finally, some hotels have adopted more futuristic technology. Robots are in use that have the ability to move between floors to deliver room service requests for all kinds of items - food, beverages, towels, toothbrushes, chargers and snacks. And infrared scanners are being used by housekeeping staff that can detect body heat within a room, alerting staff that the room is occupied and they should come back at a later time. The January Hotel Business Review will report on what some hotels are doing to maximize their opportunities in this exciting mobile technology space.