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Revenue Management for Meetings & Events: Measure, Monitor, Improve
By Tracy Dong - Exclusive for 4Hoteliers.com
Monday, 18th February 2019
 

MICE Revenue articles - hotel newsExclusive Feature: Today, there is a significant change in mindset occurring in the meetings-and-events (M&E) industry across the Asia-Pacific region and progressive hoteliers, event-centre managers, and other hospitality leaders are beginning to fully realise the opportunities associated with their function spaces.

Many hoteliers are moving beyond rooms-only revenue management, aiming for a total property approach.

In fact, for many hotels, M&E revenue can account for a significant portion of their financial performance—contributing up to 40 to 60 percent of total revenue.

To capitalise on M&E revenue opportunities, hoteliers are employing dynamic-pricing strategies and analytics technology to optimise the profitability of their function space.

Measure so you can improve

Peter Drucker, recognised as the founder of modern management, famously said, “If you can’t measure it, you can’t improve it.” So, how do you measure the value of your event space? If you’re in the hotel business, for instance, you’re likely to be primarily focused on the guest-room performance of the property, but your M&E rooms shouldn’t be disregarded. How big is your event space? What is the optimal revenue and profit your M&E spaces could contribute to hotel’s top line and bottom line? With the right processes in place, some hotels have managed to achieve a significant uplift in their M&E performance, even making it their largest revenue stream.

The main barrier to reaching these high levels of profitability often comes from an inability to accurately and efficiently measure M&E performance and make better-informed decisions. Hence, we fall back on making event-booking and pricing decisions based on gut feelings and guesstimates, or even worse—a first-come, first-served basis.

To have confidence in your forecast, you must start with a scientific understanding of available true demand. You must evolve beyond a culture that largely depends on trial and error to a culture that is much more objective by combining the power of data, advanced mathematics, and technology.

Smart revenue management starts with replacing instinct with facts and supplanting guesswork with well-informed predictions. Track demand and capture all inquiries, day by day, including turned-down and lost business. Set minimum occupancy thresholds, and on your high-demand days, hold out for higher delegate numbers. Then measure your performance. Did you reach your goals? Were your forecasts accurate? Did you miss out on any high-value opportunities? These measurements will help drive the success of your future M&E business.

You need a team to drive M&E performance

In the past, hoteliers have failed to realise revenue through M&E due to the complex nature of function spaces, leading to poor visibility into lost inquiries, revenue conversion and booking trends. For some hoteliers, M&E space 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 price setting.

To better maximise revenue opportunities from M&E, hoteliers need to take a holistic approach and fold revenue strategies into sales and catering processes.

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, or function space managers, will not be able to implement this change alone. Holistic alignment begins with a unified leadership team.

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.

Big Data? No Problem.

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.

Revenue visualisation tools specifically designed for hoteliers allow users to process large data sets quickly and easily. The solutions can track inquiry 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.

We’ve grown accustomed to an alarming lack of available good data for tracking M&E business trends. But now, increased access to data that was previously difficult to source (and understand) has changed the understanding of business opportunities and allowed for a much more sophisticated selling strategy, raising the focus on meetings management and enabling smarter decision-making and greater profits for the hospitality industry.

Maximise your hotel’s returns from M&E

The M&E industry is undergoing a powerful change across the Asia-Pacific region as hoteliers recognise function 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?

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.

Tracy Dong is the Lead Advisor, APAC, IDeaS Revenue Solutions / www.IDeaS.com

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