The Financial Upside To Fulfilling Booking Contracts

Meetings and conventions can bring a lot of business your way. Private events provide great marketing and PR opportunities. 

Event organizers often reserve a room block for their attendees based on projected attendee numbers. This can benefit both the organizer and the hotel if booking contracts are properly fulfilled. The organizer can save some money for booking in bulk, and hoteliers can drive profit from booking out more of their inventory.

But per HNN, 34% of group room nights in the U.S. are booked outside of events’ contracted room blocks. Plus, the larger the event, the more people tend to book outside.

Generally, this isn’t a problem for the hotelier, who can still drive some profit from conferences or event guests, but clearly not as much as they would if all attendees booked with them. Planners, on the other hand, can become frustrated if their attendees don’t utilize the room block. Ultimately, it’s to everyone’s benefit to maximize contracted room blocks.

The numbers say it all. In business, even a two or three percent increase in sales can sometimes mean the difference between profit and loss. If only 66% of conference guests book with the contracted room blocks, it stands to reason that boosting that number by a few points could be significant for revenue.

How To Increase Bookings As A Hotelier

It’s important to understand that there are many reasons why guests may choose to find alternatives to your hotel. They:

  • May be interested in finding a more cost-effective option.
  • May have built up loyalty points with another hotel and want to use them.
  • May end up booking their trip with someone that isn’t directly involved with the event or the event planning process.
  • May not know all relevant details connected to the event. Sending of invites could have been overlooked or delayed.
  • May want better accommodations based on their status and income level.

So, with all these factors working against you, how can you go about encouraging more guests to stay with you?

One way is to drop rates on your inventory as the date of the conference approaches. For those guests who split hairs over a few dollars, this can be a major deciding factor.

The opposite strategy can also work. In other words, offering a special rate for early birds, but returning the rates to normal as the day of the event nears. The urgency can help people make up their mind earlier rather than later.

Ultimately, both planners and hoteliers can take measures to ensure your inventory is closer to 100% booked on the designated dates, though 100% is going to be difficult to achieve at the best of times. It may be beneficial to keep the lines of communication open and to come up with ideas on how to minimize outside bookings.

Final Thoughts

If possible, collaborate with event planners. Work with them to come up with a plan to boost occupancy rates. If you put your heads together, you’ll have a better chance at making it all work.

Planners are typically booking with the best of intentions. They want to utilize specific hotels to make it easy for attendees to find their way around town and enjoy their experience at the event or conference. But they may not be aware of the challenges you face when you set aside a room block for them, and why it’s more advantageous for both parties to fulfill the contract.

Organizing an event can be a lot of work, and planners aren’t always aware of every detail. If you find they don’t have any strategies to maximize the utilization of the room block they’ve booked, try making some recommendations and suggestions to make it a mutually beneficial experience.