What is hotel group business?
Hotel group business refers to the booking and management of rooms, meeting spaces and services for organized group events from planning to completion. These can be one-off gatherings or multi-day events. Groups may be part of the MICE segment (corporate events, meetings, incentives, conferences and exhibitions), social events or organized tour groups.
Types of hotel group business
Group sales come in many forms, but four categories are especially common: corporate groups, social groups, association and conference groups and tour and travel groups.
Corporate groups
Corporate groups typically need event space for meetings. These events are often smaller than large MICE conferences, but corporate event planners still rely on hotel owners and staff for food and beverage services, AV equipment, team-building support and transportation. Larger hotel brands like Marriott, Hilton and others often cater especially well to these groups because they offer the space and services required.
Another corporate arrangement involves negotiated contracts, in which companies block a set number of rooms over a fixed period. Employees then book their rooms as needed. This is especially popular among global companies because negotiated rates and consistent room blocks provide reliable, repeat business.
Social groups
Social groups fall under leisure travel and include weddings, reunions and other family-oriented events. Because these are often deeply personal milestones, the guest experience matters immensely. These groups frequently look for packages that include accommodations, food and beverage, event space, family-friendly amenities and sometimes even wedding planner services. Since guests are paying out of pocket, they tend to plan carefully and expect a smooth, well-supported experience.
Association and conference groups
Associations may include religious groups, alumni organizations, SMERF groups (Social, Military, Educational, Religious and Fraternal) or hobby-based conferences. These groups typically rent meeting or conference space and reserve room blocks to accommodate attendees from out of town.
Tour and travel groups
When it comes to hotel group business, tour and travel groups are one of the most common types of groups. They work by having hotels partner up with travel agencies to help with group bookings and they establish a relationship to ensure repeat business as different tour groups will stay at your hotel. Tour groups tend to prioritize locations close to top attractions or transportation hubs and will often want to book extra services like food and beverage, but since they are working with tight schedules, they will want processes to be as efficient as possible.
Why is group business so important to hotels?
Hotel group business is one of the most valuable revenue drivers in the hospitality industry. Not only does it support occupancy during low-demand periods, it also brings repeat business, higher ancillary spending and lower acquisition costs than transient business. Sales teams benefit too, as group bookings provide opportunities for long-term relationships, predictable revenue and more efficient lead management.
Group business also tends to be a more stable source of revenue: fewer cancellations, easier forecasting and plenty of chances for upselling before and during the event.
Steady and predictable revenue
Hotel group bookings help stabilize occupancy throughout the year, especially during low-season periods. Because groups often plan events well in advance, they give hotels a more accurate outlook on upcoming demand.
Lower acquisition costs
Unlike transient guests - who each require separate marketing and sales attention - groups require only a single decision-maker to confirm multiple bookings. That means significantly lower acquisition costs and more efficient use of resources. Once you've successfully hosted one group, positive reviews and word-of-mouth can make attracting additional groups even easier.
Explore reputation management to truly leverage the work that goes into attracting a group.
Fewer cancellations
Whereas leisure travelers may have a change of plans, get a better deal at another hotel or cancel due to severe weather, groups are less likely to cancel. Once the group has gone through the effort to organize a business event, a conference or a family reunion, it's unlikely they'll cancel unless there's a last-minute change.
To mitigate the effects of a last-minute cancellation, you could implement a cancellation fee to be sure you can make up for a cancellation.
Easily forecast demand
With fewer cancellations and bookings often set months or even a year in advance, it's much easier to forecast group demand. This helps hotels optimize staffing, inventory and operations - and ultimately increases profitability.
Repeat bookings
Many events happen yearly, so if a group is satisfied and comfortable at your hotel, they're more likely to return. That's great news as your acquisition costs become even lower. If guests have a positive experience at your property, they usually become regulars.
Upselling possibilities
Groups - especially corporate or incentive groups - are more open to upselling. Since costs are often covered by an organization, attendees feel more comfortable booking upgrades. Add-ons like breakfast packages, bar tabs, meeting space rentals or team-building activities are also easier to sell to groups than individuals.
12 strategies to maximize hotel group bookings
Now that we've covered why group business is so valuable, let's look at strategies to attract, convert and manage these bookings.
1. Optimize online visibility
Attracting group business is all about strategically managing your online channels and ensuring a good position on Google for this target audience. You can also tap into location-based keywords around events, seasonal attractions, concerts, conferences and shows to target attendees looking for a room when attending these events.
Aim to make the most of search engine optimization to attract group business. If you get Google reviews, especially from groups, respond as soon as possible to keep guests engaged and show them you care.
2. Diversify promotion channels
Channels may change when it comes to group bookings. You may consider finding ways to target local businesses with your social media or search engine marketing efforts. For groups, online channels will be as important as offline channels.
Consider partnering with a local event organizer, wedding planner or travel agent so that you're front of mind when it comes time to recommend a hotel to a group.
3. Identify key decision-makers
When it comes to group business, it's important to identify who books group travel and tailor your outreach accordingly. The outreach you do for a travel agency should be different than the outreach for a company, MICE or even for family events and weddings. For example, in the case of weddings, a key decision-maker is without a doubt the wedding planner. How you reach them and the message you use will need to be different than if you want to target a corporate travel manager.
4. Adjust group pricing and packages
Nothing gets guests through the door like a good deal. Booking for many people at once can get expensive, so consider offering group rates when practicing revenue management. You may even consider giving an extra discount if they book directly to avoid paying so much in commissions to third-party booking sites.
You could also remove the intermediary and only accept direct group reservations. Why not throw in a complimentary beverage or breakfast once the group reaches a certain number to give them an added reason to book?
5. Tailor offers for corporate groups
Corporate groups are typically the most profitable group bookings, so consider creating a series of benefits targeted at this group, such as free meeting rooms, breakfast or lunch, a co-working area in your lobby or even free coffee while they work.
Creating unique offers for corporate groups can be very profitable in the long run because they tend to be repeat guests, especially when they have global headquarters in your area.
6. Implement technology for RFPs and group bookings
Implement tools like hotel event management software for proposals, BEOs (Banquet Event Orders) and online forms to simplify the sales process. These tools can also reduce manual work, simplify communication and help ensure accuracy throughout the sales cycle. Faster and more accurate sales processes mean faster responses and the opportunity to deliver seamless experiences for clients.
7. Streamline booking and check-in processes
Groups arrive with complexity. Automation tools - such as online check-in, digital keys, kiosks and flexible hotel payment options - ease pressure on staff and reduce wait times. A modern PMS also keeps room assignments and inventory clear and organized.
8. Align sales and marketing for group leads
Coordinate campaigns and lead management to capture high-value group clients. It's important to spread the message of your hotel as a group destination but also as you generate demand, it's essential to have the infrastructure in place to nurture those leads. The more aligned your sales and marketing channels are, the faster response times and higher conversion rates. Once you bring in a group, they are likely to be repeat guests.
9. Adjust pricing dynamically and incentivize off-peak bookings
Adjust rates based on real-time demand and offer discounts to fill slower periods or value-added packages, which can help maintain occupancy and revenue flow even in periods of low demand. This will help balance seasonal fluctuations while maximizing profitability.
It's also a good idea to adjust prices by playing with your hotel cancellation policy, offering better rates for non-refundable rooms.
10. Promote sustainability and unique selling points (USPs)
Highlight sustainability initiatives or unique accommodation selling points that distinguish you from competitors. Showcase locally sourced menus, energy-efficient systems or artisan-made amenities that appeal to environmentally conscious or experience-driven groups.
11. Maximize total revenue per group
Go beyond just room bookings. Find ways to boost total revenue per group with the help of incremental revenue from F&B, meeting spaces and add-on packages - upsell additional services and packages for each group. Offer customizable add-ons, whether that be a tour, themed coffee breaks or audiovisual equipment. This will enhance the guest experience and boost overall revenue per group.
12. Encourage repeat and referral bookings
Incentivize returning groups with perks, discounts, referral rewards or even complimentary upgrades. This will help groups to recommend your property to other organizations, which helps strengthen your relationship building and create a steady pipeline of future group business.
Conclusion
We've explored the importance of hotel group business and some convenient ways to target and manage this audience. With the right strategies, you can increase overall revenue while improving operational efficiency. You'll also save time and money as you unlock one of the most crucial keys to profitability: group bookings.
Looking for ways to turn every space, reservation and guest interaction into potential profit?
Download our guide "How to Diversify Hotel Revenue"
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