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Reevaluating Space and Revenue: The Slow Return of Group Demand and Events in the Hotel Industry – Image Credit Unsplash
The industry needs to reassess hotel spaces and consider factors such as revenue per delegate and flexible spaces to cater to the changing demand and increase revenue.
As the hospitality industry recovers from the pandemic, hoteliers are reconsidering their spaces and revenue sources, specifically focusing on groups and MICE business. Demand for groups and MICE has been steadily recovering, with some hoteliers advocating for more consistent data to better measure potential revenue.
During a panel at the Hotel Industry Development Event, hoteliers discussed the need to reassess traditional revenue metrics. Instead of focusing solely on revenue per square meter, the panel suggested considering revenue per delegate. According to Peter Heath, founder of business advisory Venue Performance, the United Kingdom has already seen a 6% year-over-year increase in meetings and events business.
Consistency in data and metrics remains challenging, especially when considering new hotel developments or refinancing loans on existing hotels. This inconsistency further complicates the process of maximizing potential revenue streams. Michelle Walder, vice president of operations for Europe at Standard International, highlighted the need to reevaluate hotel spaces and invest in areas such as food and beverage, which can constitute a significant portion of the hotel’s revenue.
Hoteliers also need to consider the potential revenue from meetings and events, even without dedicated spaces. Peter Haaber, CEO of Danish hotel firm Core Hospitality, emphasized the importance of keeping track of nearby events and capitalizing on the influx of visitors.
The panel also highlighted the need for more strategic use of hotel spaces. Henri Wilmes, chief investment officer at LRO Hospitality, suggested sharing event spaces among different users, which could potentially increase revenue but may be challenging for hotel owners to embrace.
In conclusion, as the hotel industry recovers from the pandemic, there is a clear need to reassess and reevaluate spaces and potential revenue streams, particularly in relation to group and MICE business. Focusing on data consistency, flexible spaces, and strategic use of resources can help hoteliers maximize their revenue during this recovery period.
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