Exclusive Feature: Meeting and event revenues often account for a significant portion of a hotel's financial performance across the APAC region, and as a result we are seeing an increasing number of hotel groups starting to apply more focus on yielding this revenue centre.

To better maximise revenue opportunities from meetings and events, hoteliers are deploying established revenue management strategies into sales and catering processes.

However, despite the positive evidence to support an integrated approach to sales, catering, meetings and revenue management, there hasn’t been systems that support demand-based pricing strategies for meetings and events. Until now.

A Move to Demand-Based Pricing

Traditionally, event managers have used a fixed-price approach when booking function spaces. They set pricing for the year and adjust periodically, reacting to changing demand (often too little too late). Today, though, this approach is considered far too restrictive, because it prevents teams from tailoring proposal responses and optimising revenue based on future demand combined with profitability rather than adhering to static minimum requirements that don’t optimize the business.

Although meetings and events teams may manage a steady stream of business, a static strategy can lead to missed opportunities to secure the business that is most profitable. For example, meetings and events managers often focus on business with shorter lead times first, even though rejections and longer-lead inquiries may yield better revenue.

Why? Manual record keeping or underperforming sales and catering systems simply don’t allow for visibility into demand that helps hoteliers execute a more strategic approach to prioritizing meetings and events enquiries.

Revenue Management and Meeting and Event Spaces

Applying revenue management principles to meetings and events requires hoteliers to take a more well-rounded look at their sales and catering revenues, as decisions they make for their function spaces can have a major impact on the bottom line.

To ensure that a hotel is optimising revenues from their function spaces, hoteliers must establish and review KPIs for these spaces. It is essential to collect meaningful data, forecast with confidence, and as a result, identify the most valuable business. After all, any demand-based pricing strategy is rooted in clean and relevant data. Easy access to the right data, along with interactive visualisations, provides powerful insights into meetings and events performance, and influences strategic business decisions.

To grow revenue for events spaces, hoteliers should review how they are maximising their space. Are they booking the highest value events with lowest amount of displacement? Space utilisation measurements, like venue occupancy, can help identify tactics to increase revenue by strategically pricing rooms based on their individual demand. The historic usage of meeting rooms and the pattern of occupancy can also highlight whether optimal space utilisation has been satisfied by the demand in the market.

Another performance indicator for consideration is the number of attendees attributed to a meeting room at any given time, also known as attendee density. Measuring the number of attendees, the optimum capacity for the venue space as well as the overall revenue generated can also help determine if meetings and events spaces are being utilised to their full potential.

Measuring if meetings and events spaces are generating optimal revenues goes beyond the space itself. Food, beverage, room hire, equipment rental and audio-visual revenue can all contribute to a hotel’s bottom line – and all have very different profitability margins and cost structures. This data can be used to compare the revenue of function space alongside other revenue-generating units, or highlight the underutilisation of the space in relation to those other areas.

Today there are cloud-based, visual strategy management solutions on the market that help hotels analyse and dissect their business trends and meeting space performance. These systems visually consolidate data from other sales tools to help hotel teams strategically manage meetings and events and build ideal pricing strategies.

Advanced Solutions Deliver Better Results and Better Revenue

The advanced hotel technology available today break down siloed departments across hotels. By applying standard revenue management practices to meetings and events resources, hoteliers can price, forecast and measure business performance with the same confidence as they do with guest rooms.

The result is better revenue, higher profitability across the whole property and much more visibility into data that empowers meetings and events teams to answer even the most challenging business questions.

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Rachel Grier is Managing Director Asia Pacific for IDeaS Revenue Solutions - A SAS Company

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