If you asked a hotelier to tell you last night’s room occupancy, average daily rate (ADR), and revenue per available room (RevPAR), they could probably give you the answer in a heartbeat.
NB: This is an article from IDeaS
But what happens when you ask them about meeting space utilization, revenue per available square foot, or other key metrics pertaining to meetings and events (M&E)? More likely than not, the hotelier would need some time to find the answer.
Subscribe to our weekly newsletter and stay up to date
But considering that M&E accounts for about 20 to 30% of revenue for the average hospitality organization, hoteliers should pay just as much attention to M&E as they do guest rooms.
If not, they could be missing out on serious revenue.
So, to help you maximize your M&E revenue opportunity, we put together a list of six steps your business can take to boost M&E revenue.
Let’s get started.
Understanding the tremendous revenue-boosting opportunity of meetings and events in 2023
For hotels and other hospitality organizations, meetings and events have vast revenue potential, but the opportunity often gets overlooked.
In the US, meetings and events generate around $30 billion in hotel room revenue annually. And M&E business creates another $110 billion in revenue from ancillary services, including event space, food and beverage, ground transportation, equipment rental, audiovisual (AV) support, and more.
And while many aspects of the travel and hospitality industry are still trying to catch up to their 2019 levels, M&E is projected to surpass those levels in 2023.
In fact, M&E business in the US will bounce back to 106.4% of its 2019 levels in 2023. And that growth will likely hit 129.2% during 2024 according to the Meetings Recovery Forecast.
And there’s good reason to believe those projections too. As of November 2022, specific markets, such as Dallas, Phoenix, and Nashville, have already reached 100% recovery.
While demand for M&E space continues to rise, the costs of these events are increasing too. Studies predict that the typical cost for each attendee will rise on a global basis by 1.5% for small-scale meetings and 3% for larger tradeshows and conferences.
According to the American Express 2023 Global Meetings and Events Forecast, hotel rates will likely increase across the globe by 4.9% in 2023. That includes everything from a 2.5% increase in the APAC region to a 7.4% increase in North America. Experts attribute these costs to higher food, labor, and other fixed costs.
And companies are ready to spend more on M&E in the face of those rising costs. American Express found that 65% of companies report that their meeting costs will go up, while an additional 10% report seeing their meeting costs increase by more than 11%.
Higher costs and more company spending mean that hospitality organizations need to pay extra attention to how they’re pricing their M&E space to keep profits moving upward.
So, why aren’t hospitality organizations taking advantage of the M&E opportunity as seriously as other aspects of their business? And what can they do to maximize earnings from M&E?
We answer those questions next.
The post 6 Key Steps to Improve Hotel Meetings & Events Performance appeared first on Revenue Hub.