Group event business is as predictable as a spring shower. As reliable as math. Which is why it represents as much as 15% to 50% of the revenue potential for most hospitality organizations — and why hotel management professionals increasingly make it a priority.
It provides protection from business downturns, improves forecasting, and reduces some of the risk associated with leisure business. Booking lead time for group business is simply longer — up to two years in some cases — and that gives managers greater insight into future performance. In addition, venues are often better able to protect themselves from canceled events thanks to contracted attrition clauses and cancellation fees.
In today's environment, that's a significant consideration: According to technology group D-Edge, average cancellation rates have increased to as high as 41% over the past four years. The study analyzed the online distribution performance of more than 200 different channels for 680 properties in Europe between 2014 and 2018. Overall, the advantages that group business can bring to venues are based on three key benefits:
- Consistency: Group business can protect against the uncertainty of leisure transient customers by being seasonal and repeatable.
- Pricing leverage: Consistent events allow a venue to minimize room discounts driven by leisure slowdowns.
- Revenue: In general, attendees spend more per room than leisure customers — and more on food and beverage.
Because growing group business is such a key part of your success as a hotelier, we’ve come up with five simple and actionable ideas you can use — along with some advice on how to get started to grow group event business.
Discover five ways to grow group event business:
1. Understand Your Audience: Create Planner Personas
First things first: Know who you’re talking to. It’s a simple maxim but one that takes a little thinking and a fair amount of research. It’s worth it, because knowing how to market to planners improves your interaction with them and can help your team create the right type of experience.
A good first step is to create planner profiles or personas. Look at your group business and create a profile based on the types of events your venue seems to attract. Are you mostly hosting midweek weddings and smaller social affairs, or do you have a fair share of large corporate events? What type of planner most often awards your venue their group business?
Look for trends in event amenities, size and demographics. Just make sure you go beyond the numbers and create a composite sketch of who your planners are and how they like to do business. Give each a name and treat them as if they’re real people — because they are. Here are seven event planner types to help you get started. For more information about each, go to Planners 101: A Hotelier’s Guide.
- The Third-Party Planner: These “TPPs” are professionals who are adept at managing all types of events for all types of clients. Usually they rely on industry relationships and purchasing power to secure deals.
- The Association Planner: Organizers of events for nonprofits and organizations with fewer than 10,000 members are looking for value, but may also have a very clear theme or purpose to their events.
- The Enterprise Planner: They work for large companies and corporations planning large-scale events. Most likely, they’re pros at navigating corporate hierarchies and ROI.
- The Full-Time Corporate Planner: Managers who handle planning for many different types of events often have no time and are tasked with pleasing internal stakeholders.
- The Occasional/Part-Time Corporate Planner: Putting together a meeting or event is just one aspect of their daily grind. These professionals are usually harried, need help, and love advice.
- The SMERF Planner (Social, Military, Education, Religious, Fraternal): They handle everything from reunions to weddings.
- The Government Planner: Working in a highly structured environment means that these planners face restrictions on budget, vendor and site.
2. Get Real: Invest in Virtual and Augmented Reality
By now we all know how important technology is to events — and the event business. Websites power reservations, and social media helps to amplify the event beyond the property walls. On the business side, technology solutions can reduce cost and improve marketing -- something all hotel management professionals are interested in achieving.
To many, it sounds complicated and futuristic, but it’s not. In fact, it’s here to stay and your competitor is probably already using it to thrill attendees and win RFPs. According to Cvent’s Global Planner Sourcing Report, interest in virtual reality and augmented reality grew 10 percentage points among planners compared to the previous year. The report surveys thousands of planners about the event experience.
Planners want virtual reality because they’ve seen firsthand how it can power amazing experiences and enhance the RFP process. As early as 2015, in fact, Marriott and other organizations began using headsets and 360-degree VR videos; since then many other hotel chains have launched their own programs.
So, what is it? Virtual reality simulates a 360-degree view that creates a total immersive experience; augmented reality layers digitally rendered data and images on a person’s existing smartphone view. Think about the opportunity to apply this technology to your work as a hotelier — and how it can improve the RFP experience and help establish a strong association with the planner. The technology helps generate positive emotions toward a destination, in part by giving planners a visual and immersive preview.
The value of virtual reality — and augmented reality — is in its potential to promote your venue and reduce the perceived risk that planners may have of intangible services. That helps planners make informed decisions based on your venue’s strong points. Just imagine what it could do for your site visit, or as a follow up.
3. Stay Relevant: Use Digital Marketing
It’s a digital world, so it makes sense to promote your venue on the right digital channels. That includes search engines, websites, email, blogs, and more. So in order to stay relevant and expand your event business, start thinking about digital marketing strategically, with a priority on visibility and engagement across all channels. Here are a few suggestions to consider:
Invest in online ads:
Increase visibility when planners are browsing for meetings and events. Remember, as well, that engagement matters, so visual and compelling ads produce the best results. According to a recent case study on the Westin Copley Place in Boston, six months of running ads on the Cvent Supplier Network generated more than 100 RFPs, with a combined value of over $15 million. Results like this serve as a reminder that an ad’s placement is important, as is identifying the target audience. You want to make sure your ad is seen by the right planners, in the right areas. For example, a planner searching in Chicago may see an ad for a New York venue and decide to change the destination. There’s also ad retargeting, which presents video or display content to planners after they have left the primary sourcing channel.
Email is effective:
Everybody has it and everybody checks it multiple times per day. That makes email one of the most used and effective digital marketing channels. According to the Event Manager Blog and Mailchimp, event emails get a 21% average open rate and a 2.33% click-through rate. Other sources put email effectiveness at around a 10% average open rate; still a very effective amplifier. The trick is in the execution: Boring emails without personalization are doomed to failure.
Think big about content:
Sure, a good ad gets planners to your website or sourcing page, but good content generates interest and leads. For example, focus on visual content across digital channels, and create microsite experiences that better promote your venue’s top features. Here are a few ideas about how to create and promote visual content. Thinking about content also means search engine optimization (SEO), which can be incredibly complex. The basics, however, are simple: Start by creating content that has value to readers in enough depth to make the point.
Make decisions based on data and analytics:
Very little about digital marketing is a mystery. You simply need to monitor metrics, analyze results, and adjust according to what the market tells you to do. Of course, it sounds easier than it is — but understanding how to read results is a critical step in optimizing your performance. From leads to competitive comparisons and visits, metrics tell a story of engagement and interest. For example, the hotel management, sales and marketing team at the Fairmont San Jose discovered a new way to approach their local market based on trends found through their Competitive Set Dashboard.
4. Find the Opportunity: Make Leads Your Top Priority
A successful digital marketing plan usually results in plenty of quality leads, so making that your top-of-mind priority is crucial. Do that by focusing on response rate. In a recent case study about The Wink DC, a good response rate became critically important, as leads dropped due to a deflagging. In addition, streamlining the lead management process will help improve the chances you’ll turn leads into events. Here are a few ways to help make lead management easier.
Rank the value of each lead based on what it brings to the venue. For example, any lead can be scored in terms of profitability, availability, and relationship with the planner. The same lead could have a different score based on a given hotel’s rules. Keys could be lead evaluation, management, and consistency. You can do that by establishing a Cvent Hotel Fit Score that uses logic to evaluate group RFPs that come to your hotel based on selected criteria. Ultimately, managing leads is all about managing operational efficiencies. That helps build planner relationships, because it empowers your team to spend less time with spreadsheets.
RFP best practices:
Keep track of incoming leads. To do that, assign every RFP to a team member. Then let the planner know that you’re working on it, and give the planner advanced notice when you plan to submit. And above all, be transparent: Let the planner know when you are not able to accommodate their business, with a personal thank you note. Don’t forget, before you turn down an RFP make sure there are no other properties within your organization that might be a better fit. Finally, be ready for changes and adjustments and always resend your proposal so that it reflects the most recent work.
Analyze and apply learnings:
Measure metrics such as response rate, bid rate, and awarded RFPs. This helps you identify areas of improvement and keeps your sales team operating at a high level. That, in turn, helps boost volume and improve your conversion ratio.
5. Leverage Technology: Optimize Room Block Management
The meetings and events industry has undergone a digital transformation — that’s true. What’s interesting is that the biggest change has come in the day-to-day of managing events. And one of the areas most impacted by technology is room block management. The process of helping every attendee reserve quickly and efficiently is core to what a hotel offers planners; doing it efficiently is a major first step to making them happy. Most planners simply want efficient room block management because the alternative is time-consuming, error-prone and painful. In addition, room block technology also provides planners with real-time data on block pickup, pace, room lists, and more. This technology offers three critical benefits.
It automates managing room blocks, eliminating errors and oversight. This reduces cost by lowering staff time spent on rooming lists and improves planner satisfaction. It also shifts the work from highly trained sales operators to an online reservation platform. For group business, this can be a more profitable way to book reservations.
Good room block management tech provides a branded website experience on which attendees can register. Planners should be able to monitor reservation activity in order to keep an eye on attrition risk.
Opportunity for incremental revenue:
Managing room blocks through technology also serves as a vital communications channel. Venues can leverage registration messaging that upsells spa services, food and beverage, extended stays, and room upgrades. Even before the start of the event, room block management technology creates anticipation with attendees and relationships with planners. In fact, the Scottsdale Marriott was able to turn $20 and $40 incremental upsells into more than $30,000 of added revenue.