Group Sales & Forecasting Methodologies are Broken
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Transcript of Group Sales & Forecasting Methodologies are Broken
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Your Group Sales & Forecasting Methodologies are BrokenMichael Hudson, Group-onomics
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Group Hotel Revenue Model•Multi-million dollar assets that sign long-term contracts for short-term leasing of rooms & space !•Remove assets from available inventory to be sold (forgoing future sales & potential higher rates) !•Estimating amount of rooms/space to hold aside is critical for yielding assets and maximizing revenue !•Verifying group event performance IS problematic for the industry due to lack of transparency
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Sharing Knowledge is Part of our DNA
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Our Economy is based on Consumption
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Whole Industries Were Created For This
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Giving Others Use of Your Assets
Requires Diligence
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Hotel Intelligence is a wide field
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Think About Your Own Actions…
What is the First Thing You Do?
Buying a Car…
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Think About Your Own Actions…
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Think About Your Own Actions…
What is the First Thing You Do?
Purchasing a House…
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Think About Your Own Actions…
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Think About Your Own Actions…
What is the First Thing You Do?
Buying an App…
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Think About Your Own Actions…
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If you agonize over ratings for a $0.99 app, why wouldn’t you do this for a piece of business for
your hotel that can make or break your yearly Sales goals/forecasts?
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Meetings & Conventions are the Most Complex Business for Hotels to Predict & Manage
Locations Brands ADR Variations
0%
14%
28%
42%
56%
70%
2008 2009 2010 2011 2012 2013 2014 2015
32% 35%45% 48% 52% 54%37%
48%56% 59% 62% 64%
Leads Actualized Rooms Leads ProjectedActualized Projected
Sales Channel Costs
Rooms
F&B
Space Rental
Convention Services
Outlet Spend
Revenue Potential Industries & Booking Windows
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Why Manage this Complex Business
with History Collection that is State of the Art…
for 1988
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The History Process is BROKEN
• Data provided by Meeting Planners are selectively positive
• Data shared covers room nights not full revenue picture
• When all else fails…Blind Cut
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What if You Knew, with Certainty, Which Groups Meet Their Agreed Rooms
0% - 59% 60% - 90% 91% - 100% 101% - 109% 110% - 149% 150% & Up
AttritionOverbook
Sweet Spot (+/- 10% of Agreed)
Nearly 75% of Groups do not
meet Contractual Rooms obligations
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75%
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13% - 18%Average Attrition Range
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Challenges for Hotels• 1 of 40 Hotels Getting the Same Lead • RFP Turnaround is measured in hours to be competitive
• Negotiating begins prior to clear picture of Groups’ value
• Contract performance trend data is limited or inaccessible
• Internal Hotel data covers only single brand
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Vox Populi: Sir Francis Galton
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Internal Steps Can Help
• Persistent & Electronic format of history data
• Champion an IT initiative that creates a data warehouse
• Embrace user-friendly graphical interface software packages like Tableau or Business Objects
• Lead/History Coordinator as a position within Sales/Revenue Management
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But an Industry Approach is Best• Share more than just Room Night Performance • Transmittal via electronic distribution • Industry Standard Post-Con History Rating Form • Configurable for different business units:
• Sales • Revenue Management • Group Housing
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To Make Better Decisions…• Agreed to Pick-up Rooms Detail • Events by Year and Market • Complete performance metrics, including category
spend, ADR & Total RevPOR • Arrival Pacing & Daily Pickup by Group • Detailed Space Usage by Type • Concessions and Commissions • Peak & Shoulder Night Performance
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…Start with Better Data• Booking window • Peak Nights • Length of Stay • ADR paid • Space Usage
• Group or Event Location • Arrival Day • Events by Market & State • Industry Vertical & Market Segment
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The POWER of 1%Hotel Rooms 500 total number of rooms at your hotel(s)
Percentage of Group Occupancy
55% Of total annual occupancy, what percentage is GroupPoten9al Sellout Days % 45% Annually, what percentage of the ;me is your hotel(s) at 90% or greater occupancy
Group ADR $220.00 Group Average Daily Rate or Target Rate
F&B per Group Room Night $100.00 Per Group Room night, average F&B/Catering Spend; typically charges hit the master bill
Group Hotel Counts by Size
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Small Movements = Incremental $$$
1%
$0$200,000$400,000$600,000$800,000
0 1,200 2,400
452
1%
$0$200,000$400,000$600,000$800,000
Incremental Revenue$144,540
Hotel Rooms 500Percentage of Group Occupancy 55%
Poten9al Sellout Days % 45%Group ADR $220.00
F&B per Group Room Night $100.00
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Simple Answer to a Complex Problem