From ballrooms to boardrooms, hoteliers are recognizing the financial value that meetings and events space can offer, especially when available space and pricing are fully optimized. Treating function space the same way revenue managers treat guest rooms, and taking a demand-based pricing approach, can have a positive impact on total property revenue.
The team at Lapithus, a hotel management group located in the U.K., quickly discovered this for themselves when they implemented a new software platform that helped optimize bookings and pricing for meetings and events across their properties.
Shifting the Paradigm
In the past, Lapithus had always focused pricing optimization on their guest rooms, allowing the meetings and events business to simply support guest room bookings. But, with meetings and events space at each of their 21 Crowne Plaza and Holiday Inn properties, managers saw an unprecedented opportunity to grow revenue. They just needed more insight to understand the full potential.
When Sheena O’Mahony, director of revenue at Lapithus, started her role with the company, they were already a few months into a pilot of Smart Space – a demand-based pricing platform for meetings and events from IDeaS Revenue Solutions. It wasn’t long before she knew it would transform how they thought about, and quoted, pricing for meetings business.
“One of the general managers highlighted it as a great tool and indicated that there could be an opportunity to optimize revenue for our properties with function space,” said O’Mahony. “I have a strong background in meetings and events, but I’d never seen anything like Smart Space in the industry. I knew right away that we needed to get this implemented as soon as possible.”
Rapid Time to Value
The team at Lapithus had been constrained by manual processes to price function space, and they appreciated the Smart Space support team’s help with learning the new application. With a central-based group of revenue managers, and individual meetings and events managers located at each property, consistent training was essential. In fact, the majority of central-based revenue managers at Lapithus were rarely involved in meetings and events business previously. While they were deeply rooted in guest rooms for years, many revenue managers at Lapithus uncovered the intricate connection between rooms and events business thanks to Smart Space.
Training and education equipped the staff at Lapithus to utilize Smart Space to its full potential. Their confidence and trust in the tool enabled them to drive results almost immediately. Some of the properties within the Lapithus portfolio experienced an increase on booking conversion up to 10 percent.
“Prior to Smart Space, we had trouble understanding why we weren’t achieving our meetings and events revenue targets. Now, we can quickly determine if it’s a demand issue or a conversion issue based on the available inquiry data displayed in the tool,” said O’Mahony. “It’s given us the insights we needed to help us understand trends at our properties and make impactful changes to our function space strategy.”
Total Revenue Mentality
Implementing Smart Space also helped Lapithus break down the silos across the revenue streams in their properties. Lapithus staff now recognize that meetings and events can contribute significantly to the total revenue of a property – sometimes delivering a near 30 percent uplift in terms of what a single room block booking can bring. In the past, the Lapithus team was focused on RevPAR and ADR, but implementing a demand-based pricing approach has helped them look beyond these metrics to determine the data that drives the most revenue property-wide.
“Our general managers and event managers have completely embraced Smart Space by IDeaS because they can see the clear benefits,” said O’Mahony. “And, our revenue managers love that we have a solution that allows them to tap into the revenue potential meeting and event spaces have to offer. In addition, we’re getting a truly holistic view of revenue opportunities beyond guest rooms.”