This article is a guest article written by Morgane POGARSKY .
Group reservations represent an interesting lever to improve your occupancy rate.
But be careful, because it must be handled with care in order to get the best out of it for your establishment.
To do this, we offer you some keys to getting started, monitoring your activity and adapting your strategy!
1 – Define a clear and differentiated group policy
Groups can be leisure (several friends, a large family, a discovery trip) or professional (a work team seminar). A group can be recurring (for example an air crew which reserves several rooms at regular intervals) or one-off (a single and not repeated reservation).
Setting up a group policy will allow you to be clear on the key elements of your strategy .
To support you, we will discuss together different points that will help you construct its outlines:
- Minimum group size
- The quote format
- Reservation conditions
- Data retention
- The request schedule
- The cost of travel
- Distribution of your offer
Defining the minimum group size will depend on the capacity of your structure. This is an important point, because it is indeed on this basis that you will offer a certain level of reduction.
Refine your group subcategories in a simple way at first with, for example, a professional and leisure variation.
Each subcategory will present different customer behaviors (different propensity to pay for example) that you will be able to identify and refine with experience.
If you have around fifty rooms, you can have a minimum of 8 to 10 people to create a group, or between 8% and 10% of your capacity based on double occupancy.
Listen to your customer requests to ensure you are on target.
Don't forget that the best way will be that of "test and learn", that is to try and learn!
Also, remember to list the information to request in order to establish the quote :
- the number of people and associated rooms
- the desired dates and by deduction the number of nights requested
- Requests for associated services
Also clearly define the reservation conditions :
- The terms of payment of the fixed amount (prepayment for example)
- Conditions for cancellation and modification of reservations
2 – Data conservation, a real learning lever!
Keeping data related to groups booking at your property based on a list of criteria can be very informative.
They can easily be stored in an Excel table. Record carefully:
- The number of people and associated rooms
- Dates of stay and number of nights
- The reservation period (i.e. the number of days before the arrival date)
- The price paid
- The amount of additional income (including meals for example)
- The type of leisure or professional segment (you can decline if necessary)
Group demand is more volatile than individual demand, so history will be useful, but not decisive! Keeping this information will allow you to learn more about the profiles of your groups and refine your knowledge of their behavior.
Groups generally book in advance of an individual request. Thus, they will provide you with visibility on your activity and additional points to boost your occupancy rate.
Also very useful is to compile group requests, even if they have not resulted in confirmation. Indeed, if you have a certain number of requests and no confirmation, you may wonder about the effectiveness of your group policy.
Finally, calculating the average price of a room in your establishment at different scales (on all rooms or on double occupancy) and over different periods of time (for example a Friday, a week of vacation or a month) will be useful to you. very useful.
To obtain your average price, simply divide your turnover for the period concerned by the number of rooms reserved over this same period.
3 – The request schedule: a structuring element of your group policy
An important starting point, remember to keep a calendar of high and low occupancy periods for your activity up to date with upcoming significant events (trade shows, cultural events, local events, etc.). Stay tuned to what's happening near you!
Communicate it to your colleagues so that everyone can have easy access to it. On paper or on an Excel file, it’s up to you to find the right format!
This will allow you to clearly identify the date opportunities for which you can optimize your income, but also those where you will need to boost your activity.
4 – Make groups an asset during periods of low activity
You will appreciate group bookings during off-peak periods, as individual demand is lower.
The principle is to offer a preferential rate to the group compared to an individual reservation , of course no interest for a customer if he obtains the same price for his room when booking alone.
Hence the importance of knowing your average price levels depending on the period. Be careful not to cut prices, define a price in line with your competitive environment, the period as well as your level of service.
5 – Be careful during periods of high activity
However, groups will of course be keen to position themselves in high season.
So how to do it?
It will be about finding a fair balance between revenue optimization and customer satisfaction.
If this is a recurring group accustomed to reserving rooms for you during off-peak periods, you can of course be flexible or, failing that, offer a satisfactory alternative date.
But more generally, consider excluding from group reservations dates when you know that individual demand will be strong enough to fill your establishment.
6 – Travel cost, an essential tool for defining the minimum price level
Keep in mind that a group can be accepted as long as it will bring you at least as much as the addition of the individuals that you could subsequently refuse.
To do this, you can calculate what is called the travel cost during your group quotes.
Let us use an example to enlighten you:
- a group of 20 people requests a quote for double occupancy, i.e. 10 rooms
- you have analyzed using your history that the average price of a double room on a busy Friday evening was €80
- if you offer a quote at €70 per room, then your travel cost will be (80-70) x 10, i.e. €100 loss on your turnover
- you can see the observed average room price of €80 as the minimum acceptable income for the group in question so as not to dilute your income
Pay attention to the length of groups' stay, so that you don't find yourself blocking overnight stays in high demand.
Also be sure to protect occupancy during these periods: demand will be higher, for example for a quadruple room during school holidays.
7 – Diversify your distribution channels while favoring direct sales
Your customers will generally prefer direct contact with your establishment rather than via an intermediary in order to settle the various elements and arrive with peace of mind!
But intermediaries will allow you to make yourself known and increase your reservation requests.
Also, you can operate via allotments. This will be a contractual link by which you will allocate a certain number of rooms to a local tour operator for example.
You will be able to define a retrocession date, because once this has passed, you will be able to recover the unsold capacity. The retrocession date may differ depending on the period (strong or weak) you are in, so mark your calendars!