When it comes to group housing, meeting planners and hotels have opposing goals. While the former want to obtain as many rooms as possible for the lowest rate, the latter want to fill as many rooms as possible at the highest rate. The solution, according to a new white paper: a "dynamic flex pricing" housing model designed to yield a "win-win" situation for groups and hotels alike.
Produced by Experient and MGM Resorts International, in partnership with the Association of Equipment Manufacturers (AEM), the white paper -- titled "Modernize Your Room Block Pricing Model" -- explores how AEM used dynamic flex pricing, also known as "rate yielding," for its 2014 CONEXPO-CON/AGG trade show. The results for AEM, it claims, included greater revenue that could be used for show services, more inventory for longer time frames, additional inventory access, lower entry rates contributed to earlier bookings, and increased traffic for the event website.
"The white paper captures the positive experience we had working with Experient's Housing team to implement a dynamic flex pricing model," said Dana Wuesthoff, AEM's director of event registration and housing. "After seeing such positive results for our attendees, we're believers that this model is the way to go to help us offer improved service to show participants."
AEM's hotel partner, MGM Resorts International, likewise benefited. Results included room block growth beyond the original contracted block, leverage to gain additional inventory for the next event based on stronger pick-up history, additional room nights, competitive rates, and increased credibility with attendees finding the best rates available.
"We saw room block growth in 13 hotels by more than 15 percent from the original contracted block at lower-than-market rates," said Deanna Burgess, director of citywide corporate hotel sales. "That's something we've never seen before."
In a November 2014 post on Experient's blog, Experient Senior Vice President of Housing Heidi A. Voorhees described rate yielding as "a variable pricing strategy based on understanding, anticipating, and influencing consumer behavior in order to maximize revenue or profits from a fixed, perishable resource (such as airline seats, hotel sleeping rooms, or advertising inventory)."
"Rate yielding is not for every show, but if you need the flexibility to increase or decrease rates based on demand, or increase existing room blocks during the booking process without paying transient rates, then it might be a viable option," Voorhees said.
"Modernize Your Room Block Pricing Model" is available for complimentary download from Experient's website.
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