When the big game is coming to town, the time for proactive revenue strategy is now—part 3 of 3.
Major events across the planet—from the Olympics to the Super Bowl—provide area hoteliers unique opportunities to capitalize on increased demand and maximize revenue with huge potential rewards. However, if not planned and executed well, hotels may risk displacing existing loyal guests, and flawed pricing strategies could lead to a half-empty hotel and high rates of no-shows.
To properly prepare for a major event like the upcoming Super Bowl in Miami, hoteliers need to consider a variety of factors. Here are just a few tips in this final installment of IDeaS’ major events strategy series.
Create the Right Experience
In the words of Will Smith, “Welcome to Miami.”
Major events are an opportunity for hotels to build relationships with potential repeat guests. Therefore, the importance of creating strong guest satisfaction over the course of their stay should be a key focus. For example, ensuring the front desk is adequately staffed with a service team able to manage international travelers’ needs from foreign language help to assisting with transport, local attractions, cultural experiences and dining options.
In addition to creating a favorable impression with new guests, loyal customers should not be overlooked. Hotels need to carefully balance short-term business performance versus long-term relationships with loyal, frequent guests. No hotel wants to risk displacing a loyal guest for a new short-term value customer and sending ongoing business elsewhere for the long-term.
Maximize Ancillary Revenue
Using a holistic forecast that can segment business accurately will help identify which customer segments to go after, inform strategies to increase ancillary revenues, and highlight opportunities for upselling rooms and services.
For hotels with function space, it is wise to set premium food & beverage minimums for any groups wishing to block space. For events like the Super Bowl, it’s an opportunity for companies to impress clients, so it is not uncommon for hotels and restaurants to get completely bought out by one business, and these groups are usually willing to pay top dollar for the right facility to entertain their guests.
When setting these minimums, keep in mind your location (i.e., proximity to the stadium, satellite events, the media center and the airport), the flexibility and usability of the space, F&B pricing and a variety of other inputs to ensure you don’t leave any money on the table.
Manage Your Channels
Third-party booking channels can form an important source of business for hotels, not dissimilar to loyal and repeat guests. Discussions with key distribution partners about the impact of the event and the need to drive performance are essential. This does not always mean completely closing out these channels, but finding creative solutions to ensure the hotel, distributor and guest can benefit from the resulting strategy implemented.
A strong, long-term partnership with distributors can be critical for many hotels in the lead-up to a major event and in the post-event period when business returns to more normalized booking patterns for the regional market.
All Things Considered
Whether you’re at a Miami-based resort preparing for the big game in February, a Tokyo boutique property bracing for the Summer Olympics, or just a smart hotelier who likes to plan ahead for all possible outcomes, here are a few final considerations to keep in mind as you develop your own major events playbook:
- Determine the optimal business mix between transient and group by room type
- Build a strong group base with strategic cut-off and cancelation periods that keep in mind your transient booking window
- Keep your loyal base business happy
- Conduct market analysis to understand supply and demand for the event
- Establish dynamic BAR pricing structure, flex rates by event days, room class, LOS and lead time
- Leverage tools to monitor your booking pace and competitor rate impact
- Leverage LOS restrictions to drive occupancy on shoulder dates
- Understand true demand by room class/room type for upsell/upgrade management
- Ensure straight-line availability by moving reservations around during peak periods
- Drive low cost channels but respect long-term relationships with OTAs and wholesalers
- Develop relationships with event organizers and planners to better understand demand (and aim to become assigned as an “official hotel”)
Meetings & Events Business
- Prioritize groups with banquet spending
- Forecast meetings & events demand, then flex pricing
- Set free-sell policies for pure banqueting business based on lead time
Food & Beverage
- Create event-themed offerings and packages
- Restructure menus with focus on optimizing revenue per available seat hour and food options that cater to guests from different countries
- Measure table mix, meal duration and seating occupancy
This concludes our three-part, global look at proactive strategies for major event revenue management. Be sure to check out part one and part two of the series and stay tuned for more industry insights from IDeaS.