For those with the team and occupancy, the former is great. However, for those unable to provide the supply to meet demand — or larger hotels with rapidly escalating acquisition costs — booking more events is a less-than-viable option. This is especially true in CBRE-tracked markets (42 out of 60) where supply growth will outpace the national average.
Properties who fall into this camp instead must optimize the business they’re already bringing in. They need to use intelligent group segmentation to target high-value business, and focus on leveraging the meeting elements that promise the most ROI. Yet, with so many moving parts in the group business cycle, which pieces of the booking promise the most bang for the proverbial buck?
As group FB revenue continues to pace toward a 2-3% increase by the end of the year, catering might just be the secret ingredient to more lucrative bookings.
The proof is in the stats.
FB represents 25% of revenue on average for full-service hotels who keep operations in-house — an ever-growing portion that continues to make up more and more of the revenue pie. How much of that total FB revenue is coming from groups? Typically just under 50% across the industry, but more than half at upscale and luxury properties.
According to STR, catering and banquet sales in 2017 made up:
- 57% of FB revenue for luxury properties
- 59% of FB revenue for upper-upscale hotels
- 58% of FB revenue for upscale properties
You can count on these numbers getting larger according to a new Avendra trends report, with 61% of hotel GMs and FB directors planning net growth in catering this year. These properties are capitalizing on favorable FB margins, which CBRE reports increased from 24.9% to 29.5% between 2010 and 2016.
FB is the third most important factor in site selection.
Not so surprisingly, cost and location continue to dominate the outlook on site viability for planners. Yet for planners choosing between event spaces that fit the budget, the biggest differentiator is ultimately group FB offering.
This is backed up by results from the IACC’s Meeting Room of the Future survey, with FB ranking third amongst the determining factors for venue selection.
Three Ideas That Can Grow Group FB
1. Invest in event management technology to provide better service.
37% of event planners report that bad communication is the single biggest reason they choose another venue. With FB especially, event management technology opens up huge opportunities to cut down on back-and-forth and improve communicative efficiency — from improving guest management to equipping properties to communicate visually.
With the ability to diagram FB experiences to scale, visually manage guests by the seat, and show planners the layout to-scale, these types of technologies empower planners and properties to cut down on back and forth while improving collaboration by working together in real-time. Plus, properties are able to equip staff with the context needed to execute events seamlessly.
This was all but confirmed by an STR study carried out earlier this year. When analyzing numbers over a three-year period, the study found that the 123 properties using Social Tables’ Event Services Solution averaged 1.82% more FB profit on average than the 631 properties without the platform (measured on a RevPOR basis).
2. Think about how communal spaces can become FB spaces.
At the beginning of the year, AMEX Global Meetings forecasted a 3.8% increase in group demand for nontraditional venue options. Ultimately, as meetings become more and more focused on providing purposeful experiences, the traditional ballroom setting is falling out of vogue with planners. Luckily, properties with communal space have the opportunity to diversify and meet changing expectations.
By using social spaces like lobbies, rooftops, and even outdoor areas (waterfronts, walking trails) as repurposed settings for FB service, many properties are capitalizing on the need for networking spaces and serving it up with a side of FB revenue.
Take Chicago as a case-in-point. In June 2017, properties who utilized rooftops for FB experiences saw a whopping $13 increase in revenue-per-seat to $68.20. In comparison, other properties saw an average of only $55.22.
Many owners and GMs are hearing the call when it comes to new supply and dedicating more space to FB in builds.
3. Ditch set meal times for continuous refreshments.
The same IACC survey that shows the importance of FB as a differentiator also shows that a majority of planners agree that there are large upsides to continuous FB service.
Instead of being stuck in their seats waiting for set times, continuous service allows attendees an added element of personalization and freedom that many events lack. Guests can leave their seats when it feels right, and get the brain fuel they need when they need it.
For hotels, this means more work monitoring and refreshing stations. However, the upsell potential of this type of experience more than makes up for the added resource allocation.
Group business has seen a lot of flux in recent years: Group occupancy rates are dropping, RFPs are increasing, and events as a whole are getting shorter. Still, meeting quality is high and group daily rates are at record highs. For properties who are able to leverage FB to drive up minimums and reel in revenue, the opportunity is there to bring in more from bookings.
About Social Tables
Planning the buffet, placing the mics, laying it all out — it’s not easy making the little details come to life. So in 2011, we set out to change the way events are sourced, designed, and executed by introducing better collaboration between planners and properties. Today, we’ve evolved Social Tables into an innovative platform offering the hospitality industry’s leading solutions for event sales, services, and group distribution. All to help the world create the best face-to-face events.
Article source: https://www.hospitalitynet.org/opinion/4090455.html