Knowing this, one might be quick to expect similar growth in the number of meetings. The numbers tell a different story.
Since 2009, the number of total meetings has grown only 5.4%. Attendees are outgrowing total meetings four to one, and of those meetings, only 4% require over 500 room nights — but make up 39% of the entirety of group revenue in the hotel industry.
The point? The lead pool isn’t growing, the big fish are few, and it’s more vital than ever for hotels not only to attract the best possible leads, but to identify them quickly and maximize the revenue from each.
It all starts by optimizing RFP management strategies.
The industry’s drowning in a sea of RFPs.
“Now once we know what a meeting wants to achieve, we can easily send it to 10 or 20 hotels.”
This quote from Betsy Bondurant during a panel at IMEX 2017 effectively sums up one of the biggest changes in the world of venue sourcing in recent years: It’s easier than ever to submit RFPs when a single click can send requests to multiple properties. It’s a large part of the reason that the industry has seen a 300% increase in RFPs in just a five year period (Cendyn).
As a result, hotels are floating in a sea of RFPs, and sales teams are scrambling to identify the most lucrative opportunities and respond faster than the competition. With over 75% of proposals being won by the first five properties to respond, that type of speed isn’t just an advantage, it’s an imperative.
Speed is your key to swim (here’s how).
Luckily, in the same way that our digital world has catalyzed the RFP process, huge innovations in RFP management technology are enabling teams to qualify their leads and respond more quickly than ever. How much quicker? RFP response times have dropped from 2+ weeks to within the first 24 hours — which is becoming the brand standard for many hotels.
Responding to RFPs faster than the competition doesn’t just have the advantage of visibility, it’s also important for building relationships with planners. And with meeting growth stagnant in terms of quantity, those relationships are the key to repeat business, which may in turn be the key for success.
By responding first, you communicate the notion that a planner’s event is desirable to your property. Essentially, it’s one of the strongest ways to relay that a hotel cares about a planner’s business. In the client’s eyes, faster response times correlate to better communication throughout the process. This is especially important for the 37% of event planners who say bad communication is the number one reason they choose another property.
At the end of the day, first impressions can be just about everything for business. Wait too long, and that opportunity goes out the window.
It’s time to let technology handle the lead scoring.
Taming the RFP rodeo is a multi-pronged solution that couples the right technology with the right internal processes. A pile of RFPs doesn’t convert into opportunities without putting a smart lead scoring system in place.
Sure, technology can score leads automatically as they role in, but when it comes to today’s solutions, that scoring is only as good as the parameters identified by in-house teams. Once the right scoring guidelines are in place, it opens up the opportunity for teams to switch their focus from lead scoring to outreach and relationship-building — exactly where sales talents should be applied.
As RFP software evolves moving into the future, these CRMs will begin to make intelligent suggestions sans input, proactively scoring leads and alleviating sales professionals from prospecting blindly.
Ditch the room block bias.
Last month, I was at STR’s Hotel Data Conference, where amongst a multitude of data points, a few key takeaways stood out for the world of group business. The bad news: Group occupancy rates are dropping (no surprise with Airbnb effect) along with the number of days per event. The good news: Meeting quality is high and planners are spending more on FB.
That news is problematic in an industry where the room block bias still prevails. According to an HSMAI survey, a majority of revenue managers (52%) and sales teams (36%) identify RevPAR index or room revenue as primary indicators of performance. With dropping group occupancy, the bias leads sales reps to potentially disregard other opportunities for high-margin revenue outside of the room block.
In fact, last year alone, the industry generated $110 billion in ancillary spend (FB, AV, etc.) for $30 billion in group revenue. When the ratio of ancillary spend to group revenue is almost four to one, snubbing proposals without room blocks becomes a potential danger to success.
Especially when, thanks to service optimization software, hotels can easily increase FB profit margins across the board. That’s in addition to already favorable FB margins, which increased from 24.9% to 29.5% between 2010 and 2016 alone.
Transient business takes a potential hit too. Deprioritizing blockless proposals disregards the higher rates of transient bookings. Hotels should think about that potential revenue chopped off the top, especially for properties where transient demand is high. By using a transient displacement model, sales teams can quantify the potential loss and determine how to move forward.
Time for a new approach?
Technology created the influx of RFPs — now it’s the industry’s best bet for adapting to a new world of rapidly increasing requests. In a time when landing leads is more important than ever, properties can’t afford to lose out on a potential edge. In that light, an RFP management platform like Social Tables’ Event Sales Solution might be the difference maker in meeting your revenue goals for the year ahead.
Looking to optimize group revenue moving into 2019? Download the 2019 Group Sales Playbook for 30 pages of stats, insights, and tactics for your sales strategy.
About Social Tables
Social Tables, the award-winning provider of hospitality software, delivers the most dynamic diagramming and guest management platform on the market. The industry leading company consistently aids its 3,200 customers in achieving their sales and operational objectives. The company’s diverse list of clientele ranges from hotel chains such as the Hyatt Hotel Corporation to academic special events teams from Harvard Business School to corporate meeting teams such as Genentech.