What Makes Groups Attractive to Hotels?
Hotel executives reveal how they evaluate RFPs
by Sarah J.F. BraleyMay 1, 2012
Director of group strategy for five full-service Marriotts in downtown Boston: the Boston Marriott Copley Plaza, Boston Marriott Long Wharf, Renaissance Boston Waterfront Hotel, Courtyard Boston Downtown/Tremont and Boston Marriott Cambridge
Vice president of revenue management for Benchmark Hospitality International in the Woodlands, Texas, the bulk of whose properties are conference centers certified by the International Association of Conference Centers
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When a planner submits a request for proposal, what kind of scurrying goes on behind the scenes at the hotel? How do a property's sales and revenue managers determine whether to take the business and what terms to offer? To find out how group business is weighed and decisions are made, M&C spoke with four hotel professionals representing various property types and positions. (Our panel of experts is shown at right.)
> Who evaluates requests for proposal?Gus Vonderheide: Although revenue managers play a very significant role at our properties, they're just part of the process. Directors of sales still make the ultimate decision on whether to accept a group or not.
Kim Nugent: The lead starts off with the sales manager, who speaks with the director of revenue. It's the revenue director's responsibility to supply salespeople with the tools to make a good decision about a piece of business. If it doesn't fit or the sales manager has questions, the director of revenue then helps the salesperson find a place that fits with the group's needs and the needs of the property. The general manager is the ultimate decision maker, but between the sales manager, the director of sales and the director of revenue, they can decide on the business.
Vincent Sciabarassi: We use a computer system that learns over the months and years to generate a price point and determine a positive or negative value for the piece of business. We do have a certain ceiling, allowing sales managers to make a decision on their own, empowering the sales team based on the number of rooms in the lead. For a boutique hotel of our size, when we hit the ceiling of 50 rooms, we need to work with the revenue management team to make sure we're not displacing other opportunities.
Maureen Chambers: More than half of the leads we get are handled by the salespeople on their own. There are still times when I call someone and ask what they think about the piece of business, pulling in the director of sales' perspective or the GM's perspective.
> What do you look at first?Vonderheide: The first thing is the pattern of the piece of business, the arrival/departure dates. There's no cookie-cutter approach for all properties, but we do try to stack groups, with one going in or out, with minimal disturbance.
Then there's rate. Every hotel has an average daily rate they're trying to obtain, so if a piece of business comes in at a rate below what they're looking at for that week, that will raise a flag. If the group is bringing a lot of food and beverage to it, or A/V that I can be a part of, that might offset the low rate.
Nugent: In the past, we used to say if a group had a minimum of 200 rooms and a rate that worked, we'd book it. Now, we look at what works on a particular day. We look at the potential overall package of the group, and then we compare it to our transient business. Ninety percent of the time, the group is the better piece of business. In a conference center, you could be looking at multiple pieces of business for a given day; you have to compare it in case that's the week you have really high transient demand.
Sciabarassi: First and foremost is the actual day of the group arrival and the number of rooms, to make sure the business fills the profile of the respective hotel. Length of stay is second.