Group Allocation

The article explains how users can adjust the impact of advance group bookings on their pricing strategy.

Product Plan
Advanced
Professional

The issue with Group Allocations

Does your hotel deal with a lot of tour operator/corporate/group allocations, where your rooms are blocked a long time in advance? These rooms are blocked off in your PMS so that they can’t be booked by anyone else. This is all expected.

The problem, as far as pricing is concerned, is that we see these rooms as sold. If we see a lot of rooms sold in any given month then we will assume that demand for that month is very high and put prices up. This is not ideal, because this demand is not from the transient segment that you are mainly pricing for. This is even more true when you worry that these groups may cancel.

Manage Group Allocations

The RoomPriceGenie app provides you with two ways of dealing with group bookings which are described as follows : 

Option I: Group Bookings Adjustment

We’ve implemented a setting that will allow you to enter the room nights allocated for group business for each month of the year. Some of those room nights may be confirmed, some not.




 

Having the exact number is not that important, what really matters is that it must be approximately in the right ballpark. RoomPriceGenie will take those rooms out of calculation when giving you a price recommendation. It’s important to approximately estimate this segment so that we do not see the demand as transient and move prices up.

Note: The above tutorial uses the tab ‘Room Nights Sold to Groups’ within your occupancy strategy page. If you can't locate it, please contact us to ask to have it switched on.

Tip: This feature can also be used if your property: 

  • Has a certain number of guests who always book very early
    If these are not representative of later bookings, you may wish to ignore them from the demand calculation. By using the 'Room Nights Sold to Groups' functionality, you can minimise their impact on your pricing recommendations.
  • Deals often with long stay bookings
    You may also use this setting when you have many rooms booked for a long stay. Often these long-stay bookings are affecting the overall occupancy at your property and may cause higher price recommendations that may not be relevant for the transient segment.

What does this feature mean for my pricing strategy?

On days that you have a lot of allocations, we will still recommend charging more than on days where you have not got any allocations – this is normal as you need to find fewer people to buy your rooms on the busier nights. But overall for the month, the allocated rooms will be removed from the number that we expect to have been booked already. We will effectively ignore those rooms for our monthly demand calculation.

Question: A big group booking just cancelled. Should I update my group booking adjustment in RoomPriceGenie?

If you have cancellations from some big group(s) then you must reduce the monthly number accordingly. We would suggest checking every now and then to make sure numbers are roughly correct as it will always lead to more accurate pricing recommendations.

What about 'Individual days' with group bookings where prices are too high?

The 'Room Nights Sold to Groups' feature allows you to input monthly room nights for group bookings. But, what should you do in case of group bookings with individual nights ?

As mentioned above, when you have blocked off the rooms in your PMS we see these as rooms sold. Thus on individual days when you have a lot of group bookings but don’t want the price to increase due to the allocations we recommend you to use a percentage adjustment in this case. 

NOTE: PLEASE DON’T RUSH INTO INDIVIDUAL DATE REDUCTIONS.

At RoomPriceGenie we still recommend charging more even on days where you have got allocations as we believe that this is normal because you need to find fewer people to buy your rooms on the busier nights. However, you may want to reduce prices if:

  • You have a strong fear of the group reservation being cancelled.
  • You are pretty confident that you aren't going to fill up the remaining rooms.

Example: On the 31st of August, you have some allocations coming from your Tour Operator which are still not confirmed. As a result, RoomPriceGenie is recommending a higher price - which you can see on the date pop-up. If you believe the price is too high you can decrease it by a certain percentage. The system automatically recalculates your new recommended price after the adjustment. Please keep an eye on this going forwards though - you can put a note on that date to do so.

 



 

Option II: Using the Monthly Adjustments

When allocations have seasonality, for example, when most of your group allocations come in July and August, then you could simply use the monthly adjustment. The monthly adjustments give you the possibility to adjust individual months.