What We Think
Will The Room List Ever Become A Relic?
How many of you find it strange that a significant part of our industry is essentially manual? Let's imagine that you have to enter all of your financial transactions by hand because your tax, accounting, bank, credit cards, weren't integrated. There would be an uproar. Although everyone kids that "hospitality technology is 5-10 years behind"; when we are talking about meetings and groups, it's true.
The industry still enters the majority of group reservations by uploading or faxing an excel spreadsheet or entering reservations manually and...
However, room lists are a metaphor for a more complex issue. Meeting and event technologies have been developed as independent solutions, addressing pieces of the meeting management process and are often not integrated. If we think about a solution mix that includes RFPs (search), contracting, registration, reservation management, attendee marketing, sales & catering, post-event audits, and other applications; the "group management process" requires an incredible amount of disparate and moving technology parts.
In an ideal world, a fully integrated technology solution set would be enabled to support the basic group management process:
However, in reality, the process is not at as seamless as the graphic implies. In most cases, there are numerous manual interventions to complete the group process (room list).
These largely unintegrated solutions result in a loss of revenue and productivity for planners and hotels. For guests, the group booking experience is often antiquated, especially having to rely on the current room list process. Guests are often surprised that booking a room for a meeting is so different from their transient booking process. By some estimates, online booking rates for groups are less than 5% when using a group code. That fact seems extraordinary with the massive increase in overall mobile and retail web purchases. The group management process must be guest-centric, and not one that is hampered by perceived technology constraints or reliant on traditional means.
"Our customers have told us that the current shopping and booking process for small groups is out of sync with their day-to-day digital shopping habits," said Brian King, Marriott International's global officer of digital, distribution, revenue strategy and global sales. "This process is even more cumbersome when a meeting planner must source across multiple brands. "
Successful Meetings reported that the most challenging aspect of planning a meeting was finding available dates. According to Kleiner Perkins 2018 Internet Trends Report, 60% of everyday transactions were digital. Further, Euromonitor predicts that 44% of travel sales and bookings will be digital (mobile or web) in the near future. In short, the digital experience is here to stay. So arguably, our approach to managing groups and events has not kept pace with these trends.
Not all groups are created equal. Citywide events require a much higher level of negotiation and coordination that are not as efficiently supported by a purely digital relationship, at least today. However, small meetings are an essential opportunity to elevate a hotel's relationship with both its group guests and planners. Groups and meetings may make up 30%, 40%, even 98% of a hotel's revenue base. Those meetings are likely small, less than 100 rooms on peak, yet represent most of the opportunity for reducing procedural friction, increasing revenues (both traditional and incremental) and improving both planner and guest satisfaction.
Moreover, many agree that the underpinnings of a possible economic slowdown are starting to appear. We need to heed the lessons of the late 2000's industry recession. In a period of flattening or declining growth, winning in the groups segment is going to be crucial. Hoteliers that are so focused on inventory will forget about the customer experience. Also, better data and analytics from managing the lead stream, optimizing price and availability, predicting win rates, predicting group attrition and conversion, maximizing in-house spend, lifetime value, and other critical elements will provide the necessary bulwark for succeeding in both strong and weak economic times.
If the guest experience, revenue management, or planner implications doesn't move the needle, perhaps new privacy and security requirements will. Kevin Iwamoto, a General Data Protection Regulation (GDPR) expert, commented recently:
"And yes, this means you can't share mailing lists or labels with exhibitors or sponsors unless it is explicitly disclosed up front in your opt-in form (and attendees can opt out of sharing that information with any of the third parties named in the form). The consent form will also have to include how individuals can request that their data be deleted, and any consequences that may come from opting out, such as not being included on your hotel rooming list."
In August 2019, Groups 360 announced a shared $50 million investment from Marriott, InterContinental Hotels Group, Accor, and Hilton to create a new, small meetings booking engine. This shared investment indicates that the industry recognizes the missed opportunity. Groups 360 represents a new "tip of the spear" capability to provide an aggregated, data-driven approach for searching and confirming small meetings. There are skeptics. Most of the skepticism derives from historical missteps (RoomKey and its earlier predecessor Travelweb) and, of course, the ability for the partners to align on critical operational details such as search results, unified contracting and guarantees, and other issues that have hampered similar efforts in the past.
Abraham Lincoln once said, "If I had eight hours to chop down a tree, I'd spend six sharpening my ax." Groups360's success will hinge on delivering to the marketplace a solution that ensures "adoption" and that enables data to assist planners and hoteliers with a new, optimized booking process. In other words, unless meeting planners choose Group 360 as their preferred solution because of ease of use, responsiveness, transparent content and analytics, frictionless integration, and an exceptional traveler experience, long-term sustainability could be untenable. Nevertheless, the significant funding of Groups360 underscores the importance of redefining the groups and meetings technology terrain.
How the many technology players coalesce to create a modern-day meetings and events ecosystem will ultimately determine the success of these investments. They not only have to make the event management process more efficient but must also offer a new, clear perspective on the business. According to Tourism Economics, 34% of group attendees book their room outside the block. While there are numerous reasons that guests choose a different booking method, sometimes overlooked is that the current process actually "encourages" this activity.
The guest booking experience has to achieve parity with the best-in-class direct and third-party transient engines. The group booking user experience must develop to virtually mimic the transient booking process. As an example, a significant percentage of group attendees book post-cutoff. Post-cutoff behaviors include meeting attendees booking guest rooms outside the room block or on a different technology/channel than implemented by the meeting planner.
That practice leads one to ask what is the purpose of a cut-off date. One tradition suggests that the cut-off date was implemented to ensure there was enough time for a room list to be transmitted to a hotel and those reservations entered into the PMS or CRS. Many of today's group reservations technologies would allow an event booking site to be kept open through day of arrival and beyond. Group guests would not be forced into using another booking channel. Naturally, the revenue management (RM) argument is that the cut-off date allows capturing 30 day-in bookings at the current transient ADR.
How are these post-cut off bookings really treated? Does the meeting planner receive credit for the revenue? Are these bookings viewed as transient or group from a revenue management perspective for future forecasts? Re-thinking the process could lead to many positive changes for planners, guest, and hotels.
Think back to how transient business was sold pre-OTA. The advent of the OTA completely disrupted the process because OTAs focused on a customer-centric approach. OTAs listened to the consumer, changed how to present the product, simplified the transaction, and ultimately removed the friction by not accepting technology constraints. What will happen moving forward as AirBnB contemplates entering the group market?
Like an iceberg, many of the issues lie below the surface of what's seen on the screens of our mobile devices and laptops. Advancing the industry indeed requires us to support open API initiatives, aligning planner and hotel expectations¬, and determining how to best optimize the new efforts around aggregation.
A Skift article titled "Meeting Planners Are Struggling With the Fast Evolution of Event Technology, " references an etouches study that finds almost one of two meeting planners "say that event technology is a primary pain point." Cvent predicts that its technologies will manage $19B of meetings business in 2019 and has focused on collaboration through its Event Cloud. Technology vendors are listening.
Will the room list ever become a relic? The meetings industry is at an inflection point. The old ways of managing groups will no longer work in the digital age. Technology vendors, suppliers, and planners will have to move toward greater collaboration to create a fully guest-centric experience across the meeting management process. Today the industry has the opportunity to completely re-imagine the way meetings are sourced, the way attendees book, the way planners manage events, and the way hotels provide an exceptional group experience.