Sizing the value of group business for your hotel

“Group business” is a catch-all phrase which has been applied by the hotel industry to block-bookings.

But a group of 10 staying at a 30-room boutique hotel in Key West to celebrate someone’s 40th birthday weekend has a different set of demands and requirements from 1,000 delegates attending a three-day convention at a big box property in Las Vegas. The cost to the property of servicing different types of groups is different, as is the potential profitability.

Identifying the constants

While the theory between groups varies, there are some constants in the practice of securing the business in the first place and in delivering on what has been sold.

Identifying groups which are most likely to convert after receiving the response; anticipating the upsell, cross-sell and repeat booking opportunities; calculating the potential impact on rates once the group’s rooms have been allocated – all feed into an increasingly important and business-critical conversation.

Delivery of quality customer service to group customers requires effective coordination between many different departments, regardless of the size of the hotel or venue. The collaborative approach, often reflected in corporate structures and reporting lines, is effectively facilitated and enhanced by technology.

Assessing group value

Before department heads can discuss projections and profits, properties must assess the overall opportunity and value of the group visitors. This includes everything from the anticipated F&B spend of convention attendees hosting contacts and colleagues on company expense accounts to the planned lunches, breaks, and breakout sessions essential to the event planner. It’s important to factor in all revenue streams, including individual transactions and group purchases, when evaluating their value to the hotel.

Beyond purchases, there’s also intrinsic value in brand mentions and digital praise from smaller groups like the 40-something’s birthday weekend in Key West. The immediate pay off may not hit the ledger, but what is the value of their social media activity talking about how welcoming the hotel staff were and what a perfect spot it was for such a group outing? For hotels, this earned credibility online is priceless in earning new business from future like-minded groups.

Personalization inside groups

Just because a guest is staying as part of an in-house group, don’t miss the opportunity to personalize offerings and promotions based on the individual guest profile. Room upgrades, meal options, spa treatments, and even third-party activities should all be considered for additional promotion and upselling.

Bottom line

Approaching the evaluation of a group lead more broadly than just the booked bedrooms and events enables you to improve pricing decisions, occupancy, and the bottom line.