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The Best Kept Secret Online - Benefits of E-group/Meetings Business

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March 01, 2005
Hotel | Distribution
Cindy Estis Green - cme25@cornell.edu

© 2005 Hospitality Upgrade. No reproduction without written permission.

Not booking many groups via the Web yet? The industry has been fixated on the phenomenon of online consumer bookings with a strong emphasis on leisure. A hotel general manager recently complained his property has increased its transient base so successfully using the Internet, he wondered why he hasn’t had the same lift in his group segments. The growth curve for business-to-business (B2B) Web sites, although trailing the consumer leisure volume, is on an upswing. And while there is a great deal of activity in the corporate transient arena of the B2B Web sites, the group sales process offers tremendous opportunities by moving online.

Of course, the hotel sales process will almost always include a direct person-to-person element to finalize a piece of business. But imagine the time a sales manager could save and the unqualified leads that could be bypassed if the data-intensive parts of the process were moved online. In addition, there are hundreds of companies and organizations that would rarely have had such a wide range of hotel choices for their meetings. Many more than they would have pursued if they had to research a prospective meeting site offline. What hotel would not want to take advantage of these opportunities to present their product to a far-reaching international audience? Cast a wider net, qualify prospects more efficiently and narrow a salesperson’s work to a short list of prospects more likely to convert. Sounds like a hotel salesperson’s dream.

Groups and Meetings
There are many steps to the group and meetings business booking. First, an event planner decides to search for suitable sites for the event and asks hotels to send proposals in response to the RFP that includes the event specifications. The hotel has to record the business, send contracts and hold space. Once the selection is made, an event planner may want to negotiate use of function space and work through how the bookings will be made, either by rooming list or individual reservations. Then the reservations are made and the event is attended. Simple, right? There are many systems underlying this process—most of which are now offered online. Below is a schematic describing the process.

RFP Sites
There are RFP sites that allow meeting planners to search for hotels and send out requests for proposals. The hotels respond and the meeting planners make their decision.

These sites receive fees from the hotels that are listed. While these sites employ different business models, their main purpose is to bring meeting planners to meeting venues. They serve a dual purpose; first to get business booked and second, to provide communications opportunities that are similar to those used in the past through magazine or newspaper advertising. Priority listings in search queries, banner ads, greater level of content rich imaging are all examples of the communications vehicles offered to hotels by these Web sites to get noticed. Some of these sites power proprietary sites of large meeting planner organizations like Conferon, Helms-Briscoe and ConferenceDirect in addition to internal meeting destinations within large brand sites like Hilton.com. That means that the inventory of hotels will be visible and bookable to any meeting planner either using the Web site’s own site or the ones they support.

Costs to the participating hotels are usually in the form of advertising packages, subscription and/or commission fees per RFP received that converts to a booking. In general, listing in the database does not incur a cost. It is the receipt of RFPs or the benefit of consumed business that incurs costs. Most of these sites also offer many options to advertise a hotel. Event planners are encouraged to use these sites by the participating hotels and chains, but the Web sites also promote their use heavily within the meetings community through advertising, public relations and trade shows.

Some of the newer and upcoming technology includes connections between the Web site and a hotel’s sales automation tool, such as Newmarket or Daylight, so leads can be fed to specific sales managers based on the type of business. They are automatically tracked so if responses are not made in a designated timeframe by the assigned sales manager, the system will automatically bump it up to the next management level until it reaches a regional or corporate sales manager who can determine why no one at the property was able to respond. This prevents leads from slipping through the cracks. These systems are also to be equipped with automated proposal writing so a sales manager can assemble content from the photos, text and rich media on the Web site, customize cover letters, fill in pre-set proposal documents and electronically send them off to the meeting planner who initiated the RFP.

While many hotels include meeting request areas on their Web sites, these third-party group RFP sites are another great venue to attract groups who might not be familiar with your offerings or have not found your hotel through search engine queries. A recent entry is a tool called Groople just offered to allow travel agents to search for hotels to accommodate social groups.

Current volumes of RFPs from each of these sites have been reported to be in the 20,000 to 35,000 level per year each. No doubt these numbers will continue to rise rapidly as more meeting planners choose to join the consumer rush to shop online.

Group Reservation Management
Once the booking is definite, there are vendors who manage the reservations associated with these events and groups. Vendors like Passkey and StarCite are two of the larger suppliers that can set up rooming lists or group blocks on an organization’s Web site or at the hotel’s Web site to manage the reservations coming in. In the old days, the hotel would set up a group block with associated rates based on a commitment by the event planner and give a cutoff date after which the block reverted to general inventory and no rate was guaranteed. The event planner would keep track of the rooming list and the hotel would hope the pickup was close to the commitment.

There are many advantages that accrue to the hotel, the event planner and to the guest by moving this process to the Internet. The event planner and the hotel can both know the actual booking pace as it happens. Everything is much more timely; there is no lag with data entry by the hotel or the relay of names by the group planner. Often, a customized Web page can be offered to guests by the event planner so they can make their own reservations online and receive instant confirmation.

Groups, meetings and tour room blocks are the bane of most revenue manager’s existence. Not knowing how many rooms are sold makes accurate forecasting difficult. This type of functionality gives the users (event organizers and guests) better service and allows the hotels to have much more timely and accurate status on booking pace in these segments.

Other options within the group sales process are integrating meeting registration with the room reservations. Groups can offer registration-related incentives to the attendees to book within their designated hotels. At the 2004 HITEC conference in Dallas, the Hospitality Financial and Technology Professionals (who put on the meeting) decided to allow a $50 credit for meeting registration fees to those who booked rooms at participating hotels at the time they registered for the meeting. This was a good deal for the attendee to get a discount, a good deal for the hotel who captured more room nights and a good deal for the organizer who filled the room block commitment. This is only possible if the systems are online and integrated.

On citywide conventions, Internet-based systems add benefits by allowing high tech capabilities like audits for the organizers so they can see how many rooms were booked outside the citywide blocks. This level of detail was never possible with the legacy offline systems. To work successfully, these systems must have connections to most major chain central reservation systems or to smaller hotel’s property management systems.

Function Space Management
There are online sites that provide event planners with the ability to test layouts for meeting space in specific rooms. Hotels pay participation fees to these sites to allow their data to be included. The hotels supply exact dimensions of the rooms and they are certified by the sites for accuracy. Meeting planners are encouraged to book with participating hotels since they know they will have access to this service as a part of their booking.

Tour Groups
In addition to groups and meetings, tour business, a mainstay of European hotels, have similar reservation management needs. There are some new systems that allow a hotel and wholesaler to manage a pre-set room block together so both parties know the status of the booking pace. The ultimate goal is to improve the hotel’s ability to anticipate tour group pickup so they can accommodate groups better and execute better yield management with more accurate forecasts.

There are as many types of B2B Web sites as there are types of third-party contracted market segments (e.g. groups, meetings, travel agencies, corporate accounts). Many hotels have not explored these sites as fully as they have the consumer sites. There is a tremendous amount of business to be had by utilizing B2B channels effectively. Hotels need to learn what is available, choose their participation carefully, test sales efforts and track results. Focusing on consumer leisure business only through the online channels would be a mistake when the B2B Web sites are eager and flexible to work with hotels so they can gain greater reach within the industry. This reach by the B2B sites is likely to translate to more business for the hotel--clearly a win-win scenario.

Cindy Estis Green, managing partner of The Estis Group, is a marketing consultant with over 25 years of experience in hospitality marketing, specializing in sales and marketing information systems. She can be reached at cme25@cornell.edu.

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