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?

Focus on ROI

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Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.