Resort Group Strategy

Resort Group Strategy

Resort Group Strategy is one of Main source of Business devised and shared on the Global Source platform. The Following is guidelines aim to enrich it by tackling specific group pricing challenges unique to resorts.

Rates group packages at resorts presents distinct challenges compared to other property types.

Competition varies as resorts often compete across different markets with disparate rates. Ancillary spending tends to be higher, necessitating thorough evaluation of ancillary services in business assessments.

Managing group and leisure Demand across Seasons and weekdays is crucial and demands specialized strategies.

Equally important is balancing transient and group rates to optimize occupancy and prevent a decline or shift in leisure demand during peak periods.

Resort Group Strategy / Outlines

This Segment outlines guidelines for three primary activities involved in pricing group opportunities at your resort:

  • Managing Patterns for Group Opportunities
  • Determining the Group Rate Ceiling Position
  • Incorporating Ancillary Revenues in Group Evaluation
  • Annually establish group strategies for all upcoming years according to the latest demand and market share data.
  • Regularly review and adjust short-term group strategies, such as group room availability and displacement thresholds, as necessary based on day of the week, period, and/or season.

Resort Group Strategy / Reports & Tools:

  • Daily Flash Operations Reports
  • Historical “Daily, Weekly, Or Quarterly Period Reports
  • Weekly/ Monthly Demand Data
  • Weekly Turndown Data
  • Price Sensitivity Report
  • STR Reports
  • Group Forecast.
  • Daily Competition Report.

Resort Group Strategy / Recommendation

You are required to gather historical data.

Examine Leisure Demand over a span of 3-5 years, categorized by day of the week and season.

Assess the highest potential for yielding leisure room nights based on day of the week, time periods, and seasons.

Identify weeks characterized by low group bookings to gain a clearer understanding of unconstrained leisure demand and opportunities for capture.

Analyze Leisure Segmentation to pinpoint segments with high average daily rate (ADR) potential, as well as overall ADR.

Establish group room availability and thresholds that enable the maximum capture of leisure room nights of equal or higher rates.

Resort Group Strategy / Procedure

To achieve precise outcomes, adhere to the following steps:

Analyze leisure demand:

Utilize daily operations reports, demand/turndown reports, and historical day-by-day files to comprehend leisure demand patterns by day of the week and season.

Adjust group room availability thresholds:

Modify these thresholds to achieve the optimal yield for leisure demand.

Revise group strategies and business evaluation: Adapt strategies and evaluations to guide sales efforts effectively, maximizing the yield from leisure demand.

Perform lead-time analysis:

Assess future group lead potential to make informed decisions when declining less favorable group patterns or rates. Strong lead potential allows for patient yet assertive pattern management.

Communicate with sales channels:

Proactively share critical closing and distressed dates with all sales channels to facilitate coordinated efforts.

Resort Group Strategy / steps

Considering the following steps, seek and find appropriate answers:

Why differentiate between Group demand & Leisure demand for pattern management?

Group demand can be actively directed into lower leisure demand patterns, whereas leisure demand may diminish or shift if consistently turned down during high-demand periods or patterns.

How can I enhance demand definition?

Assess unconstrained leisure demand by segment and rate program to delineate demand between higher-rated rack/leisure bookings and discounted bookings.

How to determine when to lower Group room availability?

Daily Competition Report can identify short-term sold-out dates in the market with transient compression, signaling potential opportunities to lower group room availability / thresholds to maximize revenue. Ensure that Group availability / thresholds aren’t lowered to accommodate lower-rated leisure demand than historical group potential.

Do I only consider group vs. transient room nights?

When developing occupancy projections for group room availability and displacement thresholds, consider total spend (including ancillaries) and profits. Significant variations in spend and profits can exist between group and transient stays, as well as between different group types.

Are there concerns with having zero group room availability at times (planning on 100% leisure mix)?

Most large resorts can’t efficiently operate with a 100% leisure mix due to insufficient facilities and resources to service only leisure customers.

How does my group base affect transient yield?

During high leisure demand periods, a larger group base may offer better transient yield opportunities, enabling more effective maximization of RevPAR through aggressive rate and restriction strategies.

How to determine if group strategies need adjustment?

Continuously analyze weekly STR Reports to assess if group strategies, thresholds, and pattern management require adjustment to improve occupancy share or average rate.

Stay alert to short-term demand changes not supported by historical data, and regularly communicate with airlines to identify days with limited flights affecting pattern management.

Resort Group Strategy / Rate Ceiling

Resort Group Strategy

To ensure that the highest group rate within the strategy optimizes revenue from group demand while minimizing potential Rate conflicts for remaining rooms, adjust group rate ceilings whenever group pricing is updated.

For instance Hotel and Group Opportunity:

For reference in the following process section:

Hotel:

Capacity: 1000 rooms

Business mix: 80% group, 20% transient

Historical Group ADR for the opportunity season: $174

Historical Transient ADR for the opportunity season: $159

Historical Transient daily room nights for dates in this period: 250 rooms

Benchmark Rate Calendar Pricing:

Group Ceiling: $189

Group Benchmark: $174

Reference Rate: $165

Transient Benchmark: $189

Opportunity 1:

Peak night: 800 rooms

Past rate: $200; Budget: $200

Historical actualization: 600 rooms; Expected increase in attendance

Hotel can fill remaining inventory based on historical performance.

Resort Group Strategy

Resort Group Strategy

Opportunity 2:

Peak night: 200 rooms

High-end incentive group; Rate preference: <$249

Hotel needs to fill remaining rooms using additional group and transient rooms.

In Opportunity 1, offering a group rate higher than the group rate ceiling and transient benchmark may be feasible if historical analysis indicates sufficient demand for rack/leisure rated rooms to fill the remaining 200 rooms at a rate higher than $200.

In Opportunity 2, setting a group rate higher than the group rate ceiling and transient benchmark could adversely affect the hotel’s ability to sell remaining rooms. If analysis indicates insufficient demand from group and transient segments, the rate offer to the group should be adjusted accordingly.

Resort Group Strategy / Procedure:

Utilize historical performance data to gauge demand levels across various group and transient price points and/or segments:

  • Evaluate actualized performance across all business segments.
  • Assess total revenue and profit generated by each business segment.
  • Identify the segments yielding the highest profitable revenue.
  • Compare performance with that of competitors to identify potential further opportunities.
  • Analyze lost/turndown information for dates with unoccupied rooms to determine if these rooms could have been sold at price points not available in the existing strategy.
  • Examine market performance.
  • Determine if competitive performance suggests additional rate opportunities or if competitors are achieving higher occupancies at lower rates.

Resort Group Strategy Take into account cutoff dates.

Deliberate on the specific date chosen as the cutoff date.

  • Refer to Opportunity Example #1. The contracted group would have utilized 80% of the hotel’s room inventory.
  • The decision to offer a rate exceeding the ceiling rate was informed by analysis suggesting that the remaining 20% of the hotel’s room inventory could be filled at prices higher than the group rate without conflicting with the confirmed group.
  • The cutoff date for this group was set as 30 days prior to arrival.

Resort Group Strategy / Revenue Process:

Generate ancillary revenue report using your PMS or Opera system. Below are instructions for both systems:

INSTRUCTIONS FOR PMS:

  • Utilize the Market Category Statistics Report in your PMS system

The Market Category Statistics Report enables you to observe room nights, room revenue, and other revenue for the month and year-to-date for various types of groups (e.g., National Association, Corporate Group, Social, etc.) or individual groups, depending on your defined market categories.