Revenue Management Strategy for Hotel Events Spaces – Beyond Guest Rooms
Hotel businesses from large chains to boutique hotels are finding that competing in an era of data-driven revenue management, strategy has become more complex than ever. In response to that complexity, hospitality organizations must evolve to meet new challenges and find new opportunities for increased revenue. Management must re-imagine their properties to do that, with every square foot representing the potential to maximize results. Maintaining consistent occupancy levels in guest rooms is still an important business objective. But there is more to the story.
Hotel events spaces of all kinds – convention halls, ballrooms, meeting rooms, and even poolside and garden spaces – represent opportunities to make the most of a property and to serve the needs of a wider spectrum of guests and the events they attend. Tracking revenue in these spaces means building on the potential of a hotel location beyond guest rooms. What are the barriers to unlocking that potential? What factors should be considered to help hoteliers achieve success in this specialized area of the business? Let’s look at some important strategies to find the answer.
Widen your vision for what hotel events spaces can be
For many hotel organizations, measuring how to maximize revenues in all kinds of spaces besides guest rooms can be a daunting task, especially when doing so for the first time. Stepping into the unknown is always a bit frightening. Where should hoteliers start? Getting out of the traditional box by rethinking your inventory is a good place to start. What rooms and spaces are currently earmarked for gatherings, conferences, meetings? Importantly, what spaces are not right now, but have the potential to serve these kinds of activities and events?
There may be underused spaces in locations that could serve as events spaces for family celebrations, business meetings, community events, and other functions that have not yet been considered. Some examples could be spaces in your lobby that can be booked for meetings, surrounding garden areas for private outdoor parties, even designated spaces in hotel restaurant kitchen areas for culinary workshops. When hotel organizations rethink the potential of their locations, it’s easier for hoteliers to get a different perspective on the kinds of spaces and events that can reach new kinds of guests who have never stayed at their locations before.
Zero in on KPIs and attach them to revenue and profits
With all of that creative re-imagining of locations and spaces, it’s important for hotel management to keep their feet on the ground, too. That means deciding on what success looks like in very measurable terms with well-defined key performance indicators (KPIs). One common example of a useful KPI is a measurable conversion rate; the ratio between total inquiries received against the total number of actual events, which could be either expressed in number of events or in associated revenue. Other vital KPIs might be the number of attendees within a given period, revenue per square foot/meter, the times per day over which the number events took place in a single space, event type by daypart, or by occupancy rates across the total number of function spaces in a given location.
With all of the above factors as possibilities, it can be pretty easy to get distracted by KPIs measured in isolation. To avoid that trap, all of these KPIs should be combined with each other to present a fuller picture of what each contributes to revenue and profits. In this, fewer attendees for various events this month doesn’t necessarily mean less success compared to last month’s attendee numbers if that lower attendee number brought in higher revenues and greater profitability. Likewise a higher conversion ratio versus a previous period would not automatically mean a better result if the business that was converted brought in lower revenues.
Get past uncertainty
It’s evident that measuring revenues in hotel events spaces is a different exercise to doing the same with guest rooms. That’s because of the nature of the spaces themselves is different in all kinds of ways. But understanding that, the common denominator with successful revenue management in hotel events spaces is that there are so many moving parts to it in a way that there aren’t for guest rooms. Successfully navigating that is about overcoming uncertainty. So, how do hoteliers do that?
An advanced revenue management solution helps hoteliers to meaningfully attach total values to bookings, to events spaces themselves, and to the kinds of activities that drive engagement to unlock the potential of their properties. An rm solution helps to define, contextualize, and compare the KPIs necessary to help hotel management to gain clarity on the potential of their locations and how events spaces contribute to financial success overall. Robust revenue management software for hotels offers a range of functionality, including more precise forecasting and insights to enhance optimization. But its main purpose is always about empowering hoteliers to address and get past that uncertainty factor that keeps them from turning square footage into profits.
Infor EzRMS and the modern hotel events space
As in every industry in our data-driven era, hotels need a platform to monitor, analyze, and take action on real business data. They need to do so with agility, accuracy, and trust. Infor EzRMS represents a range of functionality to help hotels of all sizes to do that, helping them to focus on achievable business objectives that will help them stay profitable and competitive.
Where does your hotel organization stand when it comes to measuring success in events spaces and in guest rooms?
Infor EzRMs can help.
- EzRMS Hotel Revenue Management Software