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Group Business Optimization Starts with Collaboration

A breakout session at Duetto 2018 discussing current and future capabilities of the BlockBster application dealt with more than just optimizing group business. Attendees and Duetto strategists agreed that hotels and casinos should fundamentally change the way sales and revenue management departments collaborate.

“These teams often are relying on reports that are a combination of different data sources,” Vincent Cusma, a Director of Customer Success and Strategic Consulting for Duetto, said while framing the challenge of growing group and negotiated sales. “One team may be pulling it from a system, transforming it, sending it over to someone else and, by the time people are actually looking at it to make a decision, the data is outdated. Things are changing so fast and so often that people relying on a manual process, exchanging data between systems, is not really the most strategic approach.”


For highly compressed dates when group business could displace transient guests, consider Alternate Stay Date Recommendations, a new feature coming in Duetto's Fall Release. 


Inefficiency in formulating group rates and quoting them to potential guests is costing hotels and casinos already.

A major new report from Kalibri Labs published this spring put numbers to the group business opportunity for hotels in the United States. Of the estimated $300 billion consumers spent on groups and meetings last year, $140 billion of that revenue went to hotels. More than one-fifth of that total, or $30 billion, came from rooms revenue, with spending on food and beverage, transportation, and audio-visual making up the balance.

Customer acquisition costs for groups and meetings business are on the rise, the Kalibri report found. Costs across many different intermediaries rose to $4 billion in 2017, Kalibri reported, and that total is projected to rise to between $8 billion and $10 billion by 2022.

Pain Points in Group Business

“The hardest challenge with really anything in revenue management is knowing what to price,” Cusma said during the session dedicated to BlockBuster at DuettoX. “Groups are so customized, and each group has very specific needs. The supply within the market is changing, and it’s really hard to know exactly where each thing should be.”

Underlying everything is a fundamental misalignment between hotel teams. Revenue managers are in charge of maximizing profitability for the property, driving average daily rate while still converting bookings. However, the sales managers who are in charge of securing group and negotiated business often are paid to maximize the number of contracts they can close and the room nights booked under group rates.

“Even though we like to think that everyone in the hotel is really working toward the same goal of making the hotel the most money, there are different incentives,” Cusma said.

Hotel Group Business Optimization

It is hard to break these habits and align sales and revenue teams toward maximizing profitability, admitted Irene Mencía, the Revenue Management Project Manager for Palladium Hotel Group who joined the session via Skype. That is why Palladium turned to the BlockBuster application, which gets all stakeholders working in the same solution with the same data, she said.

Mencía added that the combined workflow between sales and revenue management within the app gives both teams more control over their responsibilities. The collaboration is spreading across all the different applications Palladium uses, as the revenue managers work with their colleagues and sales in BlockBuster as well as GameChanger, Duetto’s flagship Open Pricing app.

“We use not just BlockBuster but the whole Duetto [platform] to show the sales team why the system is recommending the rate,” Mencía said. “We use the entire platform to build trust in the recommendation.”

Sales managers import group requests from the sales and catering system and get a rate recommendation for the potential group’s stay date, by room type. The sales managers can request a new rate within the app, letting the revenue managers approve or deny changes.

Among BlockBuster’s most important features is the audit trail that tracks the whole back and forth within the app.

“The simplest answer is that everyone is using the same thing,” Cusma said. “Having the sales team and the revenue team using the same product and the same information can really make sure that everyone is on the same page and that you’re looking at the most up-to-date data in one place.”

Bringing Open Pricing to Group Business

Mencía’s team has come to trust the process over the past four months that BlockBuster has been implemented, leading to an important mind-set shift among her sales managers and revenue managers toward group business.

“Before BlockBuster, they thought rates for groups were static and fixed rates, related to BAR,” she said. “But now, they think they can adapt each rate to each group. They can bring Open Pricing into groups.”

The amount of groups Palladium is able to quote has gone up, Mencía said, but the company’s teams are able to handle the increased workload efficiently.

“Each group has a different rate, but it is a process [our teams] believe in, and they are so excited to see the next rollout from BlockBuster.”

BlockBuster’s Roadmap of Future Features

Cusma reiterated several features that will be rolled out in 2018 to BlockBuster, including:

  • Alternate-day and alternate-property recommendations: As Cusma put it, this feature will let hotels and casinos evaluate groups based on what the properties want, not just based on what the groups want. Depending on potential groups’ flexibility, some might look at alternate booking dates or properties for their planned stays. This can help properties fill need periods and shoulder dates with their group and negotiated business.
  • New data sources: BlockBuster will begin to ingest more third-party sources of data that make group recommendations more dynamic and reflective of demand in the market. An enhanced rate shopping module and Demand360 insights into a property’s comp set soon will be available in BlockBuster as they are in other Duetto apps like GameChanger and ScoreBoard.

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