group sales & forecasting methodologies are broken

Your Group Sales & Forecasting Methodologies are BrokenMichael Hudson, Group-onomics

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

Sharing Knowledge is Part of our DNA

Our Economy is based on Consumption

Whole Industries Were Created For This

Giving Others Use of Your Assets

Requires Diligence

Hotel Intelligence is a wide field

Think About Your Own Actions…

What is the First Thing You Do?

Buying a Car…

Think About Your Own Actions…

Think About Your Own Actions…

What is the First Thing You Do?

Purchasing a House…

Think About Your Own Actions…

Think About Your Own Actions…

What is the First Thing You Do?

Buying an App…

Think About Your Own Actions…

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?

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

Why Manage this Complex Business

with History Collection that is State of the Art…

for 1988

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

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

75%

13% - 18%Average Attrition Range

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

Vox Populi: Sir Francis Galton

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

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

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

…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

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

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

Simple Answer to a Complex Problem