The COVID-19 epidemic has profoundly changed the hospitality industry and it will take years before the industry can fully unravel and appreciate the implications and impact of all these changes on hoteliers. Now, as we move from pandemic into the endemic phase of the health crisis, demand is quickly picking up and hotels are returning to full operational capacity. It may feel as if things are returning to “normal” on the outside, but on the inside, it’s anything but. Hotels are dealing with ongoing staffing shortages, rising prices, international unrest and two years’ worth of missing data, making planning for basic operations at the property-level even more complicated and hectic than ever, especially for smaller properties.
This means that hoteliers are focused on recovering the losses they experienced during the lockdowns, and I’m here to share some fantastic news that will help your property’s bottom line: nearly 80 per cent of respondents to the Northstar/Cvent Meetings Industry PULSE survey intend to produce their next in-person meeting in the first half of 2022. The same study also showed that 44 per cent of respondents will hold their next in-person meeting this quarter, and another 34 per cent will meet in Q2. Only four per cent will hold off until 2023 or later.
The sleeping giant awakens
Inquiries and RFPs for rooms and meeting and events spaces are surging, and hotels need to be prepared to quickly respond to a flood of incoming RFPs from planners (often short-term bookings) and secure corporate/event bookings and long-term contracts to fill their dormant pipelines.
Smart hoteliers already know that the way they valued and responded to incoming RFPs pre-2020, with dismal one to two per cent conversion rates, is not an efficient way to do business in 2022. Situations are still too tenuous and no one can afford to be cavalier when there’s no guarantee that tomorrow’s email inbox will be filled with inquiries.
Tips on what to look for in evaluating new business
First, hoteliers need to consider buyers’ current frustrations when planning promotions for corporate travel bookings. More than 55 per cent of planners polled in the latest Northstar/Cvent Meetings Industry PULSE Survey complain about higher rates and food-and-beverage prices, and 48 per cent complain about inflexible contract terms.
To address this issue, we recommend offering long-term contract and multi-year discounts to buyers who can commit to ongoing bookings (guaranteed income for you). In a recent BTN article, executives from travel-management giant, American Express GBT, said: “many of their clients are requesting dual-rate-load models, with both a fixed corporate rate and a dynamic discount off the market rate for a property as a hedge against market uncertainty.” Offering a discount for the standard corporate or “best-available” rate will help please both the buyers and your bottom line, so don’t ignore the importance of long-term contracts in your 2022 corporate sales strategy.
Second, price is no longer the most important consideration for travel managers. “Many buyers have told BTN that price won’t be the deciding factor,” reads a recent article from BTN. “… travel managers at companies such as Discovery and Microsoft have said publicly that business trips may get more expensive as companies safeguard the health of travellers and support strong outcomes for necessary trips.” The author of the article, Elizabeth West, predicts that because price is no longer the primary consideration for buyers, some may believe that luxury, resort-style properties would become the favourite for events, going forward. In reality, according to West, it’s more likely that travel managers choose “upper-upscale hotels…especially if they can master elements like contactless room service, remote check-in and keyless entry.”
Finally, hoteliers need to take advantage of new-and-improved methods of procurement. In 2022 and beyond, especially in markets with uncertain or fluctuating demand, your property will need to take advantage of every single revenue opportunity to try to recoup as much lost income as possible. That includes not relying solely on one or two sources for online RFPs. There are many fantastic emerging, online sourcing and procurement platforms that give access to new buyers’ RFPs from all over the world to provide helpful tools to increase the likelihood of winning the RFP. AI-powered data analytics allow you to know when your bid is most advantageously positioned and real-time feedback allows you to graphically compare your proposal (weighted by rate and concessions) to your competitors, and even make changes to boost your conversion rate and revenue.
By Ken Shanley
Ken Shanley is the founder of Vindow Inc., the world’s first AI-powered solution that significantly streamlines how group accommodations are sourced.