Event production costs are rising and fewer guests are attending in-person events. Proactive event planners are analyzing every aspect of their show to capture as much revenue as possible.
What if you could capture an extra $5.00 per night on your contracted hotel room blocks?
Let’s create an imaginary event to see all the ways that you could generate an extra $5.00 per room night on your hotel room blocks.
Let’s say that you have 1,000 attendees attending a 3-day event. On average, attendees stay for 2 nights resulting in 2,000 booked room nights. And let’s say that the average daily hotel rate is $200.00 per night. We can assume that 5% of guests will cancel their stay, resulting in 50 cancellations. Lastly, let’s say you’ve negotiated a standard 7% commission on all room nights; this puts your base revenue at $28,000.00. [(2000 room nights * $200.00/night) * 7% = $28,000.00).
An extra $5.00 per room night on 2,000 room nights equals $10,000.00. That’s a 35% increase in your event housing revenue – not bad! Ok, ready to learn how?
5 ways to make an extra $5.00 per room night on your contracted hotel room blocks
Negotiate a $5.00 per room night rebate into your hotel contracts.
This is the most obvious answer! Don’t be afraid to ask for more from your hotel partners. Keep in mind that the hotel is capturing $400,000.00 in revenue from this event [2000 room nights * $200.00/night].
Charge a $5.00 per room night service fee to all attendees at the time of booking.
If you’ve already negotiated a rebate into your hotel contracts and are looking for additional revenue, consider capturing a service fee directly from your guests at the time of booking. Attendees are used to seeing service fees (look no further than LiveNation), and the key to this option is ensuring your hotels provide you exclusive rates low enough to still allow you to offer the lowest public rates, even with a service fee at the time of booking.
Charge a $10.00 per reservation service fee to all attendees at the time of booking.
If you don’t like the idea of charging on a per room night basis, charge a higher per reservation service fee at the time of booking. Whether an attendee stays 1 night or 4 nights they only pay a flat $10.00 fee.
Enforce a one-night room + tax fee on all cancellations.
Let guests know that they are liable for 1 night’s room + tax at the time of booking if they end up canceling their reservation for any reason. You can offer complimentary name changes, giving guests the opportunity to find another attendee to take over their room and avoid this fee. But if they cancel outright they pay a penalty.
Build a housing fee into registration.
This model is straightforward. Guests are already paying hundreds, if not thousands of dollars, in registration. Offset the cost of housing operations by adding a $10.00 fee to registration to eliminate headaches and reduce liability.
BONUS: Charge a nominal fee for late actions.
Charge a fee for late bookings, late date change reductions, and late cancellations. You could even select which sub-blocks to apply these towards excluding certain blocks, like VIPs, if desired. An upside to penalties is that they help to encourage ideal guest behaviour such as early bookings. $10.00 per instance can add up quickly to increase your bottom line.
There you have it, five six ways to make more money on your hotel room blocks.
We have seen many clients move away from the traditional revenue stream of event housing whereby they rely on rebates and commissions post-event. We all know the headaches that come with this; having to carry the cost of your services without revenue, waiting for hotels to slowly report and pay final earnings, and the dreaded post-event reconciliation process. These days, our most successful clients are capturing revenue from their attendees during the hotel booking process.
At Meetingmax, we offer free integration with Stripe, a payment processor that securely collects money from attendees and sends it to your organization’s merchant account. It’s a small step to enable financial security for our clients as they no longer need to rely solely on post-event payment from their hotel partners.
Curious if Meetingmax room block management software is a fit for your event?