Revenue maximization starts with relationships
 
Revenue maximization starts with relationships
18 AUGUST 2017 9:29 AM

Industry experts, including a hotelier, a DMO representative, a convention center manager and a meeting planner, said the best way to maximize revenue for all involved is to build relationships.

NASHVILLE, Tennessee—While hoteliers, DMOs, convention center managers and meeting planners may have different goals when it comes to maximizing revenue, they share a common thread, and that’s relationship-based business.

Speakers representing those groups on a panel at the recent Hotel Data Conference said strong relationships between hotels and their travel industry partners pays off on the bottom line.

Get to know groups, events
Asking a lot of open-ended questions—such as what’s different, what’s working and what isn’t—gathering plenty of data and getting to know your client and the event is key, said Michelle Sedlak regional director of sales and marketing at Aimbridge Hospitality.

Sedlak said about 70% of her company’s groups are repeat business because of relationships the team works to build with clients.

Relationships and repeat business can pay off when it comes to attrition rates, Sedlak said. For hotels where she tracks and trusts the history of repeat groups, attrition fees aren’t necessary. But for newer properties without that history, fees may be necessary.

“I’m getting a lot of feedback that is not really positive from meetings planners, but it’s what we need to do to be able to forecast and maximize our revenue,” she said during a panel titled “Maximizing revenue opportunities in a changing environment.”

From a meeting planner’s perspective, Erika Biddix, an independent meeting planer and founder of Biddix Meeting + Events, said over the years she has put a large focus on relationships.

“To me, the relationship and managing that relationship with the hotel and the venue is as important and sometimes more important,” she said.

However, Biddix said maintaining historical relationships can be tough when corporations go through reorganizations more frequently.

“You can take a group where you think you are booking for 500 and suddenly you’re booking for 800 because they (reorganized), or suddenly you are booking for 150 and you’ve already contracted it out at that point,” she said. “All that circles back to the relationship. On the hotel side, I’ve found those that I work with are able to help us make those changes if we need to even though it may mean a reduction in revenue for them (in the) short term. Long-term, … we’ll be more willing to work with them moving forward … later down the road because of their ability to make those changes for us.”

Sedlak added that it’s essential to work with local convention and visitor bureaus.

“You’re only going to get out of it what you put into it, so if you join the CVB, and you do nothing with them, then all you’re going to get back is a piece of paper at the end of the year, meaning your bill,” she said.

Meet with them monthly, she added; it’s a partnership and extension of the sales team.

Biddix agreed and said CVBs are the first thing she goes to. For example, she’s struggled to book a group in Nashville, but she still maintains contact with the local CVB, because that relationship can pay off down the road when new business pops up.

Be creative with F&B minimums
As far as food-and-beverage minimums are concerned and how they are contracted, Biddix said it’s clear what that revenue means to hotels and she feels that there should be a dramatic, short-term shift into an experiential focus with event programs.

“I am looking at the bucket money I have to spend on a program, I am trying, and the hotels are more than willing to shift those funds into the F&B space because if I drop on my hotel side, if I can still spend that money on F&B, those folks that are there … are getting a better experience and the hotel is getting more revenue to push more of the money into there,” she said.

Work technology into the mix
Hotels have seen a great success in using technology to help drive extra revenue, said panelist Jos Schaap, founder of StayNTouch, a hotel property-management system software company.

He added that since technology isn’t that expensive anymore and almost everyone has access to the internet via mobile devices, hotels have more opportunities to generate revenue through tech-based amenities like early check-in and late check-out.

From a tourism standpoint, Esra Calvert, director of research for Virginia Tourism Corporation, said technology has helped to target high-spend visitors.

“We are definitely mobile- and social-first,” she said. The “consumer is driving us and we have to serve them,” she said.

Calvert has had to change the way she looks at data in order to gain more of real-time perspective. Once guests are in VTC’s channels, it can measure things such as the consumer’s previous sequence and how much they paid for a hotel, which has helped them narrow a target.

“To remain market-efficient, we are not going to waste time. Everyone is welcome to Virginia, but we are not going to waste our efforts targeting to consumers that are paying that $50-$60 rate. We have been really focused on that real-time measure, and now we want to bridge to different sets of data,” she said.

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