Hotel & Tourism SMARTreport #39

Hotel & Tourism
SMARTreport #39
2018 Summer Edition 55
INCREASING THE NEED FOR SPEED
IN 2018 AND BEYOND
Tim Hentschel, CEO and Co-Founder of HotelPlanner.com,
outlines the five group booking trends and why hotels need to heed
the wake-up call.
Beyond the heightened demand
for more sophisticated technology
and customer service, we asked Tim
to present five trends driving the
need for speed in 2018 and beyond.
1 THE INDUSTRY’S BIGGEST
PLAYERS ARE REDUCING
GROUP AND MEETING
COMMISSIONS
The biggest news to come out of 2018,
so far, came in March when both Marriott
International and Hilton, made the sweeping
decision to reduce the commissions they
pay to group intermediaries from 10%
to 7%. The margin drop will lead to less
distribution channels, and less advertising
and marketing for the growing group travel
industry.
2 INTERMEDIARIES
CONTRIBUTING TO MEETINGS
COSTS WILL MEAN HIGHER
EXPENSES
Research from Kalibri Labs shows that
for every $1 hotels spend in distribution
costs ($1.2 billion in annual group
booking commissions), they are spending
$4 in hotel group sales departments, a
whopping $4bn in annual labour cost. It’s
much more cost effective to give these
hotel sales managers free tools to respond
to more leads instantly, than to make their
work days less productive by cutting off
distribution channels with lower margins.
3 MORE NON-HOTEL VENDORS
ENTERING GROUP MEETINGS
BUSINESS
With costs rising, a number of outside
vendors like Airbnb and WeWork are
gradually gaining market share by offering
their space for group meetings and events,
which for some customers offer a number
of upsides.
Nevertheless, there are still many
advantages for holding group meetings
and events at hotels, but at a time when
alternative vendors are competing for this
same market share, it further illustrates the
need for hotels to remain on the cutting
edge of technology to stay competitive and
strengthen their distribution margins.
4 HAVING A MORE CLEARLY
DEFINED ROLE FOR YOUR
HOTEL’S SALES OFFICE
Another big challenge hotels are facing has
to do with their ability to effectively delegate
when it comes to determining where the
responsibility for doing the group bookings
lies. Ultimately, it becomes a question of
whether or not it’s done directly through
the sales office or through the revenue
manager who is typically yielding rates
through a number of different channels.
This is why hotels need to automate the
process.
5 BETTER OPTIONS FOR
BECOMING “SMARTER” THAN
EVER BEFORE
Obviously, the term “smart” when it
comes to group bookings is fairly open
ended and there’s no single one-size-fits all
resource that can universally anticipate the
constraints of every single customer, which
are highly personalised. When you add that
to the price tag of higher costs, smaller
commissions and increased competition,
it’s also just smart business
Tim Hentschel
CEO and Co-Founder,
HotelPlanner.com
FOR EVERY
$1 HOTELS SPEND
IN DISTRIBUTION
COSTS, THEY ARE
SPENDING $4 IN
HOTEL GROUP
SALES