Commercial Strategy

Group Business Is Back, Are You Ready to Capitalize?

The pandemic put lots of things on pause, but in many markets, we are seeing travel demand return in recent months, thankfully. As people are planning trips and businesses are preparing for upcoming conventions and conferences, group bookings for hotels and resorts are on the rise – and it’s not stopping anytime soon.  

Johnathan Halkyard, chief financial officer of MGM Resorts International, shared with Costar, “The group business, of course, was down in the early part of the year, but we’re seeing it continue to grow and will exit the year at about 90% of 2019 levels.” 

Group business took a hard hit during the pandemic. But, even before all that, for those not using advanced technology, group pricing on its own was a challenge.  Hotel sales managers had to go through a “just good enough” process to find the Minimum Acceptable Rate (MAR) for the group and date. There was no secret recipe for finding the optimal price and dates for business that would result in the greatest profits – but with IDeaS G3 Revenue Management System, there is.  

Using an advanced revenue management system (RMS) for group pricing and forecasting allows the sales manager to easily and efficiently decide whether the group will make the hotel more money than if they held the same rooms for transient business, and respond back quickly with the optimal price that takes into account ancillary spend for maximum profit.  

Determining pricing for a group without an advanced RMS limits flexibility, response speed, and fails to account for what is going on in the market. The pandemic has had people cooped up in their houses and working from home. Businesses are more than eager to get their employees involved and connected again. Large weddings and big social receptions are back! Families, friends, students, basically everyone in general, cannot wait to get back out and traveling. The U.S. Travel Association reported, in spite of high fuel costs 6 in 10 Americans are planning at least one trip for the summer, and hotels need to account for this rise in demand.  

Raymond Martz, executive vice president and chief financial officer of PebbleBrook Hotel Trust, said to Costar, “Resurging and pent-up business travel both transient and group, have been the most significant positive surprises in Q1. These trends are accelerating in the second quarter with strong booking trends and increasing rates. Group bookings, leads and site visits have increased substantially over the last 90 days and the booking window for both leisure and group has been stretching out.” 

With IDeaS G3 RMS, hotels can optimize profitability by forecasting group demand and group wash by room type and segment. This is crucial with demand on the rise in upcoming months and years post-pandemic, and also as the hospitality industry as a whole utilizes more technology to improve and fine-tune their business practices.   

Group pricing with IDeaS not only advises the decision to book a group but determines the greatest profit return through automatic analysis of multiple arrival date scenarios. Reports and graphs inform sales and revenue teams of the optimal rates for a range of arrival dates, depending on how flexible the group is. Organizations with multiple properties in a market can maximize incremental revenue by evaluating a group across the cluster of properties to make the best decision for the estate.   

Leading hotels and resorts prioritize speed and efficiency, and with the help of Amadeus and IDeaS, the group booking process is in good hands. The first of its kind two-way integration between Amadeus Sales and Event Management System and IDeaS G3 RMS creates a seamless and efficient experience for hotel sales staff. 

The interface streamlines the evaluation process as booking details and evaluation results are passed automatically back and forth between system, keeping key activities in the sales and catering system. Saving time, improving sales and catering efficiency with easy access to group pricing and displacement analytics, and maximizing profitability for the hotel or resort.  

Group bookings are on the rise, as we have seen in Q1 reports, and will continue to increase as the year goes on. Excel spreadsheets and “good enough” solutions aren’t going to cut it with the upcoming demand for group business. Utilizing advanced technology ensures hospitality organizations are getting the most out of every group business opportunity – and we know there are plenty to come.  

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