While hoteliers use technology to manage yield across rooms and an array of packages, the potential of meetings and events (M&E) has been neglected. Is there any technology that helps forecasting M&E business, crunching data and enabling M&E teams to forecast and price more effectively? Donald Gasper looks at the latest trends.
Meetings and events (M&E) have been underestimated in the past by hoteliers due to a lack of in-depth understanding and appreciation of the positive benefits these activities can bring. However, given M&E revenues can account for a significant portion of a hotel’s financial performance, an increasing number of hotel groups are starting to focus on these activities to support their bottom lines.
Contrary to any narrow understanding of the benefits that M&E spaces can deliver to a hotel, these areas actually have huge potential. In fact, for many hotels, the profit potential of this revenue stream is so significant that it can contribute 40-60 per cent of their total profits.
Many hoteliers fail to fully realise revenue through M&E due to the complex nature of event spaces, which can make it difficult for the hotel to analyse lost inquiries, revenue conversion and booking trends.
For some, meeting spaces can be an afterthought to guest-room revenue since existing reporting capabilities are disjointed and time consuming, and they may have a general lack of confidence in demand forecast and price setting.
To better maximise revenue opportunities from M&E spaces, leading hoteliers are folding revenue management strategies into sales and catering processes. However, despite the positive evidence to support an integrated approach to sales, catering and revenue management, there hasn’t been a strong call for technology that fully allows hotel teams to do so. Until now.
Today there are cloud-based revenue management solutions on the market that help hotels analyse and dissect their business trends and meeting space performance at their properties. These systems visually consolidate data from sales diary management systems (such as Opera or Delphi sales & catering systems) to help hotel teams strategically manage property M&E spaces and collaborate on ideal pricing strategies.
One of the first technologies that optimises the entire hotel is SmartSpace by IDeaS, a cloud-based application, that helps forecasting M&E business, crunching data and enabling M&E teams to forecast and price more effectively. SmartSpace is a dynamic strategy application providing simple yet detailed analysis of your Meetings & Event business trends and performance. Utilising data from diary management systems, this visual set of tools provides a variety of Demand Analytics, Performance Measurement and Selling Strategy models to enhance strategic decisions and increase revenue growth.
“SmartSpace has greatly improved our analysis capabilities of our M&E space, allowing the hotel to yield rates and restrictions on specific dates to a greater detail,” says Ben Chapman, Director of Revenue at London’s Strand Palace Hotel.
Surprisingly, given the financial benefits that spaces can bring, some Asia-Pacific based hoteliers still aren’t leveraging their event areas strategically, which means they risk overlooking opportunities for substantial revenue generation.
“Asia-Pacific hoteliers need to accurately and efficiently measure M&E performance to make better-informed decisions,” says Tracy Dong, Lead Advisor, APAC, IDeaS Revenue Solutions. “An accurate demand forecast is critical in this situation. Revenue management systems help track demand and capture all inquiries, day by day, including turned-down and lost business. The systems enable hoteliers to set minimum occupancy thresholds, and on high-demand days, hold out for higher delegate numbers.”
Today’s revenue management solutions provide trend analytics, detailed heat maps and drill-down reporting capabilities, delivering hotels with critical insight into group lead times by month and status. This means that rather than relying on blanket ‘free sell’ periods established at the beginning of the year, hotels can now evaluate lead times for every individual month—reviewing both past and present years—to understand when their target business will likely book and when exactly they should be filling their distressed dates with more flexible business.
Data helps inform strategic decision-making that can drive M&E revenues. The only challenge with M&E is that because multiple hotel divisions (sales, catering, revenue management) are involved, there can be a huge volume of information to work through and collaboration between these departments is critical.
Revenue visualisation tools specifically designed for hoteliers allow users to process large data sets quickly and easily. The solutions can track enquiry trends, forecast demand, set optimised rates, measure performance, report findings, and identify new opportunities for business, all in one place, and at a far more detailed and scientific level than even the smartest revenue manager with a colour-coded spreadsheet could ever achieve alone.
The revenue opportunities presented by M&E spaces mean hoteliers need to have an integrated approach to sales, catering and revenue management in place—and the right technologies to support this. However, revenue managers, catering sales or event managers, will not be able to implement this change alone.
“Holistic alignment begins with a unified leadership team,” says Dong. “Once executive buy-in to taking on a holistic approach to maximising revenues from M&E has been achieved, you can enlist their help in driving cross-collaboration between departments like sales, marketing, catering, revenue management, and more. Establish key performance indicators like meeting room occupancy, revenue per square metres or foot, attendee density and revenue per attendee, and create educational materials and training sessions to help your teams learn to manage function-space inventory in a scientific and methodological way!”
The M&E industry is undergoing a powerful change across the Asia-Pacific region as hoteliers recognise their space is more than just a guest-room filler. Now is the time to analyse your own hotel’s approach to M&E and ask: Are we maximising opportunities in this space or are we leaving money on the table by not taking a holistic property approach to this growing market segment?