Through the summer months of 2021, hotel recovery from the global pandemic that decimated wide swaths of the hospitality sector was finally taking shape. After operating (in most cases) for more than a year in survival mode, hoteliers began to exude a cautious optimism — at least with respect to leisure demand, which by July had approached 2019 occupancy levels. The prospects for a return to business-as-usual for group demand, however, remained far less certain as new variants caused a growing number of businesses to further postpone conferences and other large events, even as countries eased coronavirus-related travel restrictions on foreign visitors.
To try to bring the picture into sharper focus, Starfleet Research partnered with Oracle Hospitality to conduct a survey of hotel executives, managers and other employees from properties with event function space, both large and small. The goal was to ascertain hoteliers’ perceptions and challenges around group events and understand their plans moving forward. For many hoteliers, the loss of events business, which typically represents between 25 and 50 percent of total revenue, has taken a hefty toll on their bottom line.
Even as leisure air travel picked up speed and tourist destinations sprung back to life, questions remained as to whether business travel and in-person events would follow suit — or, for that matter, ever fully return to its platinum era. Most survey respondents expressed doubt that prior levels of revenue performance would resume before early 2022. A majority of respondents (65 percent) expected their hotels to generate less than 25 percent of prepandemic revenue from events in the interim.
Almost three-quarters (74 percent) of hoteliers also indicated that, at least for the foreseeable future (i.e., the next 12 months), events at their hotels would likely be conducted in a hybrid environment, meaning that some percentage of guests would attend in person while the remaining guests would participate virtually from remote locations. This expectation underscores the need for hoteliers to immediately evaluate and implement technology, if they haven’t already, to enable meeting planners to stream presentations and other event activities online in a way that optimizes the experience for all attendees.
According to the research, only about one-third (30 percent) of hoteliers expected that events at their properties would be held mainly in-person with no restrictions on the size of gatherings in terms of the number of invited guests before early 2022. At the same time, 40 percent of respondents expected that events would be held mainly in-person but limited to small gatherings of, say, fewer than a hundred guests. In their view, weddings and other family events — as well as small business meetings — might ramp up quickly, especially with the new C.D.C guidance, but industry conferences and other large-scale events would likely remain off the table for the time being.
Despite the short-term uncertainty surrounding function space utilization, it’s important to remember that, historically, hotels with in-demand space were typically inundated with requests for information, with event planners scrambling to simultaneously compare multiple venues for cost and suitability. So, while the timetable to normalcy may still be up in the air (and international business travel remains a wild card at the time of this writing), it seems only a matter of time before group demand rebounds to significantly higher levels.
To prepare for that eventuality, hoteliers should waste no time in ensuring that their organizations have the requisite technologies in place to compete in what will surely be a fast-moving environment, with group sales teams handling large volumes of inquiries fueled by pent-up demand. To be effective in their jobs, these teams, along with event planners, will require fast, accurate and detailed information related to not only function space availability, but, also, guest rooms availability, menu, package and pricing options, and more. Unfortunately, according to the research, fewer than half (45 percent) of hoteliers reported that they are “very satisfied” with their existing technologies for managing group sales and events while 35 percent said they are “somewhat satisfied” or “not at all satisfied.” More than one-third (38 percent) of respondents indicated that they plan to upgrade their event-related technology capabilities in the next year.
Surprisingly, many hoteliers have continued to rely on general-use software and even manual processes to run their function space business, with suboptimal results. This is true of even legacy event management tools with rudimentary — if not antiquated — capabilities for managing group events. In fact, 40 percent of respondents indicated that the technology capabilities currently utilized by hotel staff lack many of the key features that one might expect of a modern-day group sales and event management platform, including features that, at the very least, make it easy for sales teams to respond to requests for information in a comprehensive and timely manner. While more than three-quarters (78 percent) of respondents said that their customer account, contact, and activity management capabilities met their needs, almost half (47 percent) indicated that their existing technologies lack user-defined dashboards with single-point access to key information. This might rightly be viewed as a significant shortcoming. Meanwhile, only 30 percent of respondents indicated that they are able to manage all group blocks—corporate, social, FIT allocations.
Suboptimal performance may also stem, in part, from poor technology integration. A lead capture system, a property management system (PMS) and a revenue management system — as well as contract generation, billing and reporting applications — that each operate as a standalone solution may fail to “talk” with one another. Disparate and disconnected data siloes impede a hotel’s ability to participate effectively in the sales process and may result in loss revenue opportunities. This situation also commonly leads to duplicate data entry. Consider: National or regional sales offices need real-time access to function space inventory and pricing information. With antiquated processes and legacy systems, this information may be unavailable to the people who need it most. Also, because each property in a brand may operate through independent systems and channels, hotels may have access to only a fragmented view of guest accounts, leading to information inefficiencies, lack of sales coordination, and the inability to maximize the value of corporate accounts.
Before the pandemic brought the industry to a temporary standstill, a growing number of hoteliers had begun to harness the power of next-generation solutions designed to resolve these problems. The best of these solutions can be configured to fit the needs of any hotel and offer sophisticated capabilities that can make all the difference in the world in terms of execution of complex event and space bookings and guest relationship management. Flexible booking options make it easy to manage any number of events simultaneously. Other tools enable, for example, customizable catering packages and instant menu creation. Catering resource management with flexible menu options and item inventory control and function diary with drill-down capabilities have become standard features of advanced solutions, providing an unprecedented level of resource inventory control. Advanced reporting tools make it easy to track expected event revenue, margins and final consumption based on customizable revenue types.
Next-generation solutions offer many advantages that may not be immediately obvious. The best of these solutions, for example, makes a record of information about all client accounts and sales activities, including the assignment of responsibility for proposal follow-up, contract paperwork and email communications, becomes cohesive and easily accessible. This is a key benefit, according to the research, given that RFP management, diagramming and function space virtual representation, mail and activity integration, sales pipeline management and prospecting and e-Proposal and e-Contracting capabilities all rank as “important” or “very important” factors to event management success by the vast majority (82 percent) of hoteliers who participated in the survey. By seamlessly sharing data between the sales and catering function and the PMS, managers and staff can also access information about all group — and individual— guest spend on reservations and activities in one solution.
Hoteliers with function space need to have a technology platform that will enable them to drive centralized and optimized group sales operations all year long. They need to ensure that their sales teams know how much function space inventory they need to sell and where they need to sell it in order to reach maximum capacity and achieve full revenue potential. The sales team needs tools that allow them to know at a glance how function space inventory ties into the broader guest rooms inventory and current availability for any given date. And again, because function space inventory, like guest room inventory, is subject to constant change, the solution needs to interface with the PMS and other technologies in a seamless and, preferably, real-time fashion. Effective sales management depends on immediate and accurate access to up-to-date inventory information as well as pricing information. A next-generation solution is designed to automate the process across all channels and locations.