How To Increase Hotel Occupancy with Group Events

All of these businesses have the ability to boost their own revenue and client base by putting on seminars for their clientele.  Many of these small business owners have never even thought of putting on a seminar to boost their own revenue and/or credibility.  Depending on the resources you have at your inn, you can develop a marketing strategy that informs these people about the potential of seminars or retreats, teaching them how to put a seminar together, and facilitating them in the process.  Acting as a resource to help other business owners enhance their own profitability and reputability also positions you (and your hospitality property) as a valuable business partner in your community.

 Putting on seminars or retreats is beneficial for small businesses owners because:

·         It gives them another avenue through which to make money during the year.

·         It provides a different method for them to engage their clientele.

·         It provides an opportunity to pick up new clients by having their existing clients bring a friend to the seminar or retreat.

·         It provides another avenue to demonstrate their expertise and thereby enhance their credibility in their field (especially important for small and new businesses). 

How to Market Seminars to these Businesses:

In order to proactively attract group bookings you need to make contact with the business owners or decision makers.  You can initiate communication either in person or via e-mail.  For this type of big project it is always better to take a day and drive around town dropping off marketing materials and introducing yourself to these business owners.  If you just don’t have the resources or desire for this approach, the mail is your next best option, and e-mail is the third best option.  You want your introduction to be as personal as possible, and e-mail provides the least opportunity for personal, human touches.  With mail or e-mail, be sure to include personalized letters using their names and introducing yourself to them.  Tell the business owner why you are contacting them and it is best to follow up with a well-timed follow-up phone call within 1 week of sending the written correspondence.  Do not send bulk e-mails (spam) to people who have not already opted in to receive e-mails from you as you may be violating CAN-SPAM laws or, worse, get your web site taken down by your host.

 Whichever way you decide to contact business owners, you will need to create a 2 to 5-page guide teaching them why putting together a seminar or retreat would be beneficial to them and their clients, why your property is the place to have it, and offering suggestions on how to get it done with ease and effectiveness.  Don’t worry if you don’t have the budget to have this marketing material professionally designed.  Do what you can, within your means, even if this is just a Word document.  Even in Word, you can add some color and a couple photos.  You just need to input your inn’s information, and you are ready to go.

 Address Their Concerns

Marketing seminars to local businesses is different than marketing rooms to individual guests because businesses have different concerns than individual people.  The most common concerns businesses have are:

 ·         What’s in it for me?

The most important things in a person’s life are his or her own needs and desires.  Even people who appear to put others first are often compelled to do so primarily because it makes them feel good.  The best answer to the question of “what’s in it for me”, as it relates to a business holding a seminar, is money.  Money can come in the form of their current clients paying for the seminar or by the business picking up additional clients as a result of the seminar.   

Another good answer is that seminars allow businesses to provide better services to their clientele.  The clients of many of the businesses listed above would greatly benefit from receiving specialized, intensive sessions to help them better understand the subject matter at hand. Since many small business owners started their business out of a passion for the subject matter, this seminar benefit can be important to them. 

·         How will this experience at your hotel reflect on my reputation?

If the seminar goes poorly, it will directly affect the reputation of the business owner or employee who organized it.  This fear is a major concern for anyone who books a block of rooms, whether it is for a business seminar of a family reunion.  They know that the lodging venue they choose plays a vital role in the success or failure of their event and thus, their reputation.  You must address this concern directly in your marketing by explaining why your venue is the ideal place to hold their event.  You must also address this concern indirectly by being responsive to their questions, accommodating to their needs, and following through with your promises. 

·         Will it be too much work?

For the most part, the answer to this question depends on the individual business owner.  For some people, even having to mail a one page form back to you is too much work.  With these folks, it is best to just walk away or they will drain you of your time, energy, and any profit you hope to see from their seminar.  They have to be willing to put in a certain level of effort in order for the event to succeed and you must be honest with them about this. 

 For others, a moderate amount of work is worth the benefits they expect to see from putting the seminar on.  There are things you can do to help, particularly for first time group clients that you want to make an especially positive first impression with.  In your marketing materials to them, address the steps they need to take to pull off a successful seminar or retreat.  Use bullet points so as not to make it seem more complicated than it is.  Demonstrate that you are there to facilitate the process with them. 

Also, first time seminar planners often stress over every detail because they know their reputation is at stake; therefore, they want the event to be perfect.  Be understanding of that need, effectively address concerns that come up and call them regularly (about once a month until the date of the seminar) just to ask them if there is anything they need.  Do not overstep your role here.  You do not want to get into the planning details beyond the normal services your property provides.  You must be conscious of your own potential for burn out at all times.  Over-reaching to help someone else out is a sure path to burn out. 

·         Can I get enough people to attend?

This is a serious question that they also have to address.  In your marketing materials, offer suggestions on how to get their clients to attend.  You should not get into actually marketing to their clients unless you have the resources to do so, the desire to do so, and their permission to do so.  Otherwise, just offer them tips on how they can get people to attend.

 Beyond this, you must encourage them to look at this issue honestly.  The last thing you as a hotelier want is a bunch of seminars being booked nine months out and then having them cancel at the last minute because they could not get enough people to attend. 

You may want to have a reasonable policy regarding refundable and non-refundable deposits that is fair to both you and businesses that cannot enroll the needed number of attendees within a realistic timeframe.  This helps ensure they give you ample notice if the seminar is not going to happen.

Prepare For Rejection

Any time you are marketing anything to anyone, you will be rejected more times than you are accepted.  In fact, your close rate will probably be somewhere in the single digits for businesses that you contact versus businesses that become actual customers.  This level of conversion rate is normal and does not mean there is anything wrong with you or your hotel. 

If you are not used to this rejection it can be difficult at first.  Before you start your marketing, accept that rejection will happen and know that it is not personal, and every marketer or salesman goes through the same thing.  It is the ones who are willing to face that rejection head on that are ones who succeed.  Using mail and e-mail help buffer you from rejection somewhat, but they also lower your close rate compared to face-to-face meetings.  

If, after giving it time and serious effort, you still have not closed any group events for your hotel, it may indicate you should tweak your marketing or change the services you are offering a bit.  Ask for feedback when your facilities are not chosen to host an event, as the insights will help you determine what needs to be adapted in your marketing or service offerings.  Adapting your service offerings is nothing abnormal.  In fact, once you have a service (and the accompanying marketing) that is selling well, it will most likely look nothing like what you envisioned in the first place.  It is all part of evolving and getting better. 

Making the Deal Happen:

Pricing

Groups expect discounts.  You expect profit.  Bringing these two needs together into a workable situation is essential to a successful seminar and operating successful lodging property.  When offering discounts, you must be sure that you are not losing money by renting a block of rooms at a discounted rate that would probably otherwise be rented at your rack rate to individual people.  If the group is booking during your peak season, under-pricing services is a real concern.  It is less of a concern during your low season, which is why many hotels find that attracting groups during their low season vacancies is the most profitable approach.   

Also, you should keep in mind that even though you are giving the group a discount on the room rate, that profit can be made up through other onsite services like food service, massage, paying for use of your community room, etc… 

A great method for determining ahead of time if giving a discount is worth booking the group event is to use the mathematical equation for Yield.  Yield will help you determine if booking the rooms at a lower rate is worth displacing higher paying, individual guests.  The equation for Yield is: 

Revenue Realized ÷ Revenue Potential = Yield 

As a very simple example, let’s say the group is going to book 10 rooms for 2 nights (20 nights total) for $75 a night (a 25% discount off your rack rate of $100).   That means the revenue realized is $1,500. 

If you were to book those rooms to individual guests at your rack rate of $100 a night, your revenue potential would be $2,000.   

So, $1,500 ÷ $2,000 = .75 or 75% yield.  Meaning you would be losing money by only bringing in 75% of the revenue you could be bringing in with individual guests (if those rooms get booked). 

If this is your peak season and the likelihood is that you will book all those rooms, then booking to the group at that discounted rate does not make financial sense for you.   In instances like these, one option may be to offer a discounted rate for a less busy time (mid-week, for example) and a full price option for the busy days ( i.e. summer weekends). 

There are two huge flaws in the simple example above.  The first flaw is that it did not take into account the revenue that can be generated from having one large group on-site.  In addition to charging more money for the use of your community space, you will find that with groups, there is a synergistic effect.  That is, if one person gets a great massage, they will go back and tell everyone about the massage and then several others will book massages.  Typically they all eat at the same place for each meal, go to the same local attractions, etc…  This dynamic is different from individuals who all have different plans and might never even converse with each other while staying at your hotel.  So, if your inn has other revenue generating services, those numbers need to be included in your “Revenue Realized” and “Revenue Potential” estimates.   

The second flaw in the above example is that it does not take into account the human equation.  Sometimes the comfort level of knowing you have a large booking months ahead is a big stress relief for a small hotelier.  If that relief is worth losing a little potential revenue, then go ahead a book the group.  You started your own business to live life not stress over money, so the human equation can be an important factor in making decisions.  

If The Rate Does Not Work, Don’t Say “No”

If the rate does not work for you, do not decline the group booking.  In fact, don’t ever say no to anyone booking a room, unless they are just not desirable guests no matter the circumstances.  Rather than saying no, think of a way to make it work.  Perhaps suggesting a different date for the seminar (during your low season), or raising your rate so the numbers work for you, or instead of discounting the rooms you can add additional services they won’t be charged for so they feel like they are getting a deal from you.  Be creative and work the numbers over and over until it works for you and the business holding the seminar.   

Manage Buyer’s Remorse

So you have located a business owner who wants to hold a seminar at your lodging property.  The finances work for both of you and they reserve your facilities.  Beware of buyer’s remorse because it’s sure to kick in.  Whether they tell you or not, they will start worrying about how everything is going to turn out and whether you will uphold your end of the bargain.  You should make a plan for managing concerns with every large booking, whether they admit buyer’s remorse to you or not. 

Manage buyers remorse by staying in touch with them and showing you care about their event.  Help them with anything that falls within the services you provide and try to give them references if their needs are outside of your services.   Staying in touch also allows you to gauge whether or not they are signing clients up for the event so that you are not blindsided by a last minute cancellation.  

Host the Group Event:

Exceed What You Promised

When the time comes to host the event, don’t just live up to what you promised, exceed it.  This should not involve a lot of extra work and energy on your part.  Simple things like baking a batch of cookies and brewing some coffee as a surprise mid-afternoon snack can go a long way toward exceeding expectations.   Other than that, if you just treat the group as you would want to be treated if you were in their shoes you will do fine. 

At the beginning of the retreat, be sure you and your staff introduce yourselves, give them a quick run down of the facility, and let them know how to get ahold of you if they need you.  If your hotel provides additional services like massage, meals, spa treatments, day excursions, make a quick reference to these services and tell them they can learn more about them in their guest binders (you should always have guest binders that feature this information.).  Don’t push these services too hard as you will risk offending the businesses owner who is hosting the seminar. 

And finally, be sure not to hover over them too much.  Often times too much attention can be just as annoying as not enough attention.  Provide your services efficiently and get out of their way.  This also ensures you and your staff don’t burn yourselves out over the course of the seminar. 

Market to the Next Business:

Get Reviews and Referrals

Remember, one of the most powerful aspects to holding group events is the word of mouth that comes from happy business owners and the repeat business that comes from their businesses once a year.  If you made a businesses owner look good in front of their clients, that business owner will love you forever.  By living up to what you promised, you will have achieved this goal.

 Ask for a review from the business owner immediately after the event concludes and mention that you would appreciate any referrals they send your way.  Market the heck out of those reviews.  Add them to your web site, include them in future guides you send to other businesses, etc…  Before the business owner leaves, try to nail them down to booking another block of rooms for their next seminar the same time next year, if at all possible. 

Conclusion

During the entire process from initial contact to the end of the event, try to place yourself in their shoes and address their needs, treating them as you would wish to be treated.  Eventually you will develop relationships with several businesses that hold seminars at least once a year, if not more.  The goal is to make this self-reinforcing so you will no longer need to actively seek out new businesses. 

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