Group and meetings hotel bookings in turmoil
Hotels must rethink their sales and distribution for group and meetings bookings in light of recent trends, warns the CEO of a booking specialist.
Tim Hentschel, CEO and co-founder of HotelPlanner.com, says automating the process will help hotels cut distribution costs and compete against new competitors.
The warning came after hotel giants Marriott International and Hilton announced they would be reducing commissions for group bookings from 10% to 7%.
"This margin drop will lead to less distribution channels and less advertising and marketing for the growing group travel industry," warned Hentschel.
He said the groups, meetings and events market was also being impacted by the arrival of non-hotel entrants, such as Airbnb and WeWork, which have been gradually gaining market share from hotels.
"At a time when alternative vendors are competing for this same market share, hotels need to remain on the cutting edge of technology to stay competitive and strengthen their distribution margins," he said.
Hentschel pointed to recent research from Kalibri Labs which shows that for every $1 a hotel spends on distribution – which equates to $1.2 billion in annual group booking commissions – it is spending $4 on its hotel group sales departments.
"This is a whopping $4 billion in annual labor cost," he said. "Surely it would be more cost effective to give these hotel sales managers tools to respond to more leads instantly?"
HotelPlanner has more than 100,000 hotel partners worldwide and provides group hotel booking services to over 3,000 groups a day through its online technology and automated rate checkers.
Earlier this year it launched a private label group sourcing platform allowing hotels to obtain more direct group business through their own websites.
Listed among the top 50 travel sites in the world, and ranked number one in group travel, HotelPlanner receives over 5 million unique visitors each month.
Stephen Milton
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