During a recent webinar on booking group meetings, a panel that included hoteliers and a meeting planner shared their experiences of how to be successful in negotiating group business in a short booking window.
REPORT FROM THE U.S.—When a client submits a last-minute request for hotel meeting space, both hotel operators and meeting planners agree that communication, flexibility and compromise are essential to meet the request.
Speaking during Hotel News Now’s “Maximizing revenue in short booking windows” webinar, Heather Dameron, manager of event strategy and recruiting for The Journeys Group, said as a meeting planner it’s sometimes necessary to keep expectations “realistic” when working with a client who wants a meeting set up within a short booking window, which is usually less than 30 days.
When booking last minute, she said the first qualities she looks for is if the hotel or resort meets her group’s needs, if it fits within their schedule and if the price is right.
“But one of the things I always have to tell my team is we have to be more flexible, and we might not get everything we want,” she said. “That’s something I think both planners and hoteliers have to work together on, to make sure we’re all on the same page on expectations and how we can better educate each other.”
Here are three takeaways from the webinar on the state of group business and working within shorter booking windows.
1. Group demand is recovering
Jan Freitag, SVP of lodging insights at STR—parent company of HNN—led the webinar with a brief look at the state of the U.S. hotel industry. After U.S. hotel revenue-per-available-room growth decreased in September, October U.S. hotel occupancy rose 0.8% to 69.9%, average daily rate increased 2.7% to $133.81 and RevPAR rose 3.5% to $93.55.
Freitag said the hotel industry lacks pricing power, especially “real ADR growth,” or ADR percent change minus the change in the Consumer Price Index, which factors in inflation. With real ADR growth only at 0.5%, Freitag predicted 2019 “will absolutely be the year of cost control.”
But one positive is group demand has rebounded, which is great news for meeting planners and full-service hotels, Freitag said.
“We’re seeing healthy GDP growth and healthy profit growth of Fortune 1000 companies, and they’re sending people back on the road,” he said. “Group demand is up and group ADR is growing slightly, again basically at the rate of inflation. But if group demand is accelerating, and we’re not seeing a whole lot of new group rooms being added—the pipeline is basically flat or it’s growing 2% or so—we’re not adding a lot of new supply. But group room demand is going up, and that means that when people with very short booking windows—transient travelers come in to your hotel—there should be some pricing power because we’re compressed already.”
2. Making a profit
Laurie Czyz, senior director of sales, Americas, meeting and events at Radisson Hotel Group, said any group business request needs to yield a profit, especially if it’s within a short booking window and compromises will likely have to be made.
“It’s based on the complexity of the program, how much staff we’re going to need, how many people we’re going to need in the hotel to execute effectively,” Czyz said. “We’re going to have to take a closer look at what the group rate is that we’re going to be able to offer and how many restrictions if any we’re going to have to put on (food-and-beverage) spend. The bottom line is it has to be profitable and make good business sense for us to move forward.”
But exceptions can be made, Czyz added.
“If it’s a short-term booking from a customer that we’ve been dying to get business from, and we haven’t yet, we might look at that a little bit differently,” she said. “Or if it’s from a great client of ours that helped us out both in peak times and slower times, we’ll probably tend to negotiate a little bit more favorably in those times as well.”
3. Open and direct communication
Daisy Hall, marketing manager for Delaware North’s The Lodge at Geneva-On-The-Lake in Geneva, Ohio, said when a meeting planner contacts her property with a booking request with a tighter turnaround, the time crunch keeps all parties communicating and working toward the same goal.
“We can be upfront, and hopefully the planner is also being upfront, saying this is exactly what we need, this is our exact budget and these are exact details,” Hall said. “… Details don’t always come up as quickly as you want to from the property side, but we can in such a short booking window—knowing what availability we have—if we can accommodate them, we can put our best foot forward and really tell them right upfront this is the best rate.
“It’s easier for (meeting planners) to look at their budget and go, ‘OK, we’re probably not going to negotiate much, this is the best rate, this fits within our budget. Maybe they’re not as close to airport as we would like, but they’ve got shuttle service elsewhere.’ So it takes a lot of the guesswork out for us when we’re booking a short-term booking for group.”
When it all comes together with a booking and a happy client, Dameron said she looks for opportunities to work with the brand or property again.
“I like working with people who know what they’re doing (and) we have a good time working together, a good relationship,” she said.
All in all she views hotel partners as an extension of her team, she said, and each party needs to work together to get “the best possible result for our attendees.”
“Service and relationships are absolutely the two things that are paramount for me in doing repeat business,” Dameron added.