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Post COVID-19 Lockdown MICE Business Strategies
By Rachel Grier
Tuesday, 30th June 2020
 

Revenue Management, Hotel &L, Rate, STRIt is no surprise that the meetings, incentives, conventions and exhibitions (MICE) sector of the hospitality industry has been significantly impacted by COVID-19 travel restrictions, government lockdown measures and social distancing rules worldwide.

Over recent months, the sector has effectively been put into hibernation, but with restrictions now lifting in certain regions what does this mean for the MICE industry as a whole?

Unfortunately, macro-level challenges will remain present for the sector over coming months. This is due to the fact MICE providers will likely see their business recover at a slower rate versus hotels who are welcoming back leisure travellers. The slower recovery can be attributed to restrictions on the numbers of people that can attend larger scale events, which will still be limited for some time. Additional headwinds facing the sector are that corporate spend is likely to be reduced due to softening economic conditions, which will directly impact the MICE sector.

Event cycles and attendee confidence levels are also not working in the event industry’s favour. With half of the year already passed, organisers are moving to outright cancel 2020 scheduled events, rather than postponement to an alternate date in 2020. For events on a two- or three-year frequency, this presents a sizeable commercial risk, especially as sponsorships are driven by attendees, and attendee travel confidence levels (and available budget to do so) for major shows are in question.

With an unclear outlook for the MICE sector, what should hotels be doing to secure event business for the future?

1. Assess your offering

While quieter operating periods in the MICE sector are not usually welcomed, they do present an opportunity to assess the venue’s place in the market, evaluate their offering compared to competitors and reset their strategy. MICE professionals should be currently conducting research on previous events, honestly assessing strengths or weaknesses of their venue, catering and staffing, in order to highlight areas that need improvement. Conducting interviews with previous organisers and attendees to gather honest and frank feedback is a worthwhile exercise, not only for insight into your own business, but exploring and understanding their experiences with your competitors.

With virtual conferencing on the rise and most likely a significant part of the new-normal, the venue’s quality of audio-visual technology offerings and equipment is key. Assess the space available in your hotel to provide a suitable environment for live-streamed meetings involving a mix of physical and virtual attendees.

2. Remove barriers to secure bookings

Hoteliers should revisit their event sales process, including follow-up methods. Evaluate the approach to ensure it is efficient, transparent and that the booking or enquiry experience is seamless and absolutely buyer centric.

Larger scale corporate events have traditionally involved multiple rounds of negotiation before coming to mutually agreed upon budget and contract terms. Hotels that rely on this same labour-intensive work process to secure MICE bookings in a post COVID-19 world may find themselves losing business to rival properties who are more upfront about base level costs to make for easy comparison.

Many corporate bookers will continue to work remotely over the coming months, yet still will have to secure multiple project quotes for each client to evaluate the best venue and package for their budget. In the case of smaller events, professional bookers may no longer be involved as those duties may have been shifted to administrative team members during workforce consolidations. A hotel which displays pricing for MICE packages and which features booking facilities online, rather than adding barriers by instructing bookers to call a sales number for further details, will be making a booker’s life easier and help position their property to secure business.

3. Shift focus to smaller and local group business

Currently there are still widespread restrictions around how many people can gather in one internal space, not to mention the social distancing that also applies. This will present ongoing challenges for larger scale MICE events. However, it is likely government restrictions will relax faster for smaller scale events, where limited group sizing means social distancing can be effectively practised.

Given a renewed focus on smaller scaled functions, there will be a need for smaller meeting rooms to cater to these events. Understanding and potentially adding new flexibility to the room configuration will increase capacity for those smaller meetings. Hoteliers may also be surprised by a range of differing types of events being staged in their ballroom or larger spaces. These venue spaces can more easily cater to social distancing requirements and may be suitable for non-traditional clients who need more space to do business.

4. Review contracts and set rules

Rules. Remember those? Under normal operating conditions, hotels would traditionally impose limitations – such as space can only be booked by a residential event with a minimum accommodation spend, rather than be catering only? Sadly, those times are now gone, and the industry must start with a blank sheet of paper. Do sell rules need to be the same year-round? Hoteliers should begin with seasonality trends by event type or size, consider lead volume, conversion rates and wash rates as data points to influence the rule.

In a time where not only the MICE sector is facing significant disruption, but also its customers, how hoteliers enforce booking policies can have lasting reputational impacts. MICE professionals should assess if their contract terms and conditions can be negotiated to allow on-the-books meetings to move to future dates without financial penalty.

While losing short-term revenue is generally not advised and standard cancellation policies should normally be enforced to support a hotel’s financial position, offering flexibility during these exceptional circumstances can foster positive relationships for future business. Additionally, through moving business to future dates, hoteliers can build a solid customer base in future quarters to support their own recovery.

5. Evaluate demand and plan for the future

Hoteliers need to assess historical data and understand demand, ahead of developing a forecasting methodology into the new normal. By constantly evaluating demand and understanding lead-time and booking-pattern changes, sales and marketing teams can proactively build more targeted MICE specific strategies to fill low periods, or redirect efforts to focus on promotions for dates that previously experienced a concentration of cancellations.

To aid with long-term, or yearly, forecasting, MICE professionals need to accurately analyse demand data through the COVID-19 period. Analysis is needed to indicate if trends like low occupancy are likely to reoccur, or if this is a non-regular event due to higher levels of cancellations because of lockdown measures. Accurate data analytics and MICE business-optimisation technology will assist with forward planning and help understand which trends are relevant, and which are not, to assist in building future forecasts.

Prepare for the future, today

The MICE sector will continue to face disruptions over the coming months due to COVID-19. From ensuring venues can meet social distancing regulations to practicing enhanced cleaning and food preparation and delivery processes, there are challenges ahead. However, throughout history the hospitality industry has weathered tough periods and has continued to prove its resilience.

Although we cannot press the restart button on 2020, we can launch into repair mode now. The overall long-term outlook for the industry is and will remain positive. Now is the time to prepare for the future and reposition your MICE business for the better, healthier days which lie ahead.

Rachel Grier is the Area Vice President, Asia Pacific for IDeaS (www.IDeaS.com). She will speak at the upcoming Hotel Revenue & Distribution Summit in Singapore on October 15 on the topic of, "Benefits of revenue management system – Driving value across the total hotel organization." For more information on this topic, please contact Rachel via: www.linkedin.com/in/rachelgrier

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