Professional Documents
Culture Documents
The Commonwealth
Games: A Strategy Guide
for Indian Hoteliers
One of the biggest sporting events in the world will come to the Indian Sub
Continent in 2010 – the Commonwealth Games in Delhi in the first time the
event will be hosted on Indian soil.
Since the British Empire Games were first hosted in Canada in 1930, the
Commonwealth Games has grown into the world’s third largest regularly staged
sporting event after the Olympics and FIFA World Cup.
Major events provide a unique opportunity for hoteliers all around the world – a
chance to increase their revenue potential and improve their ongoing financial
stability. However, more often than not, many hotel owners and hotel managers fail
to recognize the need for the right type of ‘pre-event’ planning.
While there is always a great deal of excitement and high expectations in the
hotel community when a major event approaches, there is also a high degree of While there is always a great deal of
uncertainty around what strategies will be most effective. In the lead-up to the excitement and high expectations in the
Commonwealth Games, hoteliers from across Delhi may be asking themselves: hotel community when a major event
Will we manage to capitalize on the increased demand for their rooms? Will we approaches, there is also a high degree of
be able to balance the huge demand from the Games attendees willing to pay uncertainty around what strategies will
very high rates with the need to please and maintain our existing customer base be most effective.
(perhaps at much lower rates)? Will this fabled demand actually materialize, or will
cancellations and no-shows result in rooms remaining empty throughout the event?
To help address these issues for local hoteliers in Delhi, leading revenue
management provider, IDeaS, has accessed their expansive knowledge base and
sifted through streams of data collected during major sporting events from around
the world to assess if there are any lessons that can be learned by Delhi hotel owners
and managers.
The result of this research has provided an in-depth analysis of what has happened
during past major sporting events (including Grand Prix’s, Major Tennis
Tournaments, Euro Football Tournaments). The data highlighted what worked
and what did not and delivered some comprehensive recommendations for local
hoteliers to follow to ensure that revenue is maximized.
A carefully planned strategy aimed For example, at the recent 2010 South Overbooking – Appropriate
at this segment of the market will be Africa World Cup: each town that overbooking levels should be set by
needed to maximize occupancy levels. hosted significant matches needed hoteliers across Delhi to counteract the
This strategy should be developed to not only focus on the day of the expected rise in cancellations.
between the hotel owner and hotel match, but also the days preceding. For
manager and also any relevant sales and the World Cup Final being held on a Overbooking will be a key part to
marketing staff involved in the hotel. Saturday night in Johannesburg, hotel achieving 100% occupancy for the
owners and hotel managers in each city Commonwealth Games for hotels
In terms of generating revenue from needed to pay particular attention to across Delhi. Data observed from major
ancillary services, hoteliers across days such as the preceding Wednesday sporting events around the world has
Delhi should not put too much focus and Thursday by using optimal pricing shown that in most cases hotels did
on their food and beverage efforts on strategies. not reach more than 95% occupancy.
days of major sporting events. Food Depending on a hotel’s business mix
and beverage revenues have shown to Pre-payment plans – To minimize and the number of guaranteed bookings
come in below expectations on major the impact of costly last-minute it has, it can be recommended to
event days during the event period. It cancellations, it is recommended that overbook a hotel by at least 5%. This
is therefore important to focus both Delhi hotels implement a system of should gradually be reduced as the
meeting and event sales and food and phased pre-payment restrictions. transient pace increases and groups
beverage marketing efforts on non- are being washed to more accurate
major sporting event days, as there By clearly stating the terms and numbers.
will be a greater need to drive revenues conditions of ‘no-shows’ and
during this period. Occupancy levels cancellations, hotels will be able to The implementation of these
should also allow hoteliers to create dramatically minimize any potential recommended strategies, combined with
attractively priced room plus food and negative impact on revenue. If, as careful and detailed observation of the
beverage/meeting packages throughout expected, there are a large number levels of demand, will allow hoteliers
the Commonwealth Games. of cancellations over the course of an to achieve the correct balance between
event, these pre-payment plans will price and demand. Another area of
Optimal pricing strategies – The allow hoteliers to recoup a large slice of the hospitality industry that needs to
pricing strategies in the lead up to the their lost profits. These profits will then be understood when preparing for an
Commonwealth Games will have to be be complemented by last minute fill-ins. event is the growing popularity of third
carefully managed by individual hotels party booking sites, which now mean
in Delhi. While an expected increase in It is vital that Delhi hoteliers check their customers throughout the world can
demand on significant days will allow group and transient cancellation policies book their hotel visits around the clock.
rates to be driven accordingly, this will to make sure these are watertight, clear This also means they have access to the
not be the case on other less significant and concise. Not all bookings need to prices on offer at numerous hotels in
days. be 100% guaranteed or pre-paid, but any one city or country simultaneously.
for particular segments it is definitely
IDeaS Revenue Optimization recommended that hoteliers fence
recommends that a careful and direct bookings. Local hoteliers need to make
marketing strategy is put into place to sure that for those segments that are
entice visitors to arrive earlier than the fenced, that conditions of prepayment
significant periods of the event. This or cancellation are clear and easily
would mean hotels would need to pay understandable for the customer and
significant attention to particular days. the sales and reservation teams. This
will avert any nasty discussions or legal
battles.
Importantly, with all hotels in and around Delhi competing for the same client
By successfully achieving the balance
base, particular attention needs to be paid to ensure a reasonable amount of rate
required, hotel owners and hotel
parity is on offer between hotels. While visitors will expect higher rates than
managers across Delhi will be able to
normal, they will be sure to compare prices with different hotels to ensure a
maximize their revenue potential during
reasonable level of consistency.
the Commonwealth Games.
A thorough market analysis prior to the event will also allow for a range of succinct
marketing tactics to be developed, helping your hotel reach its full capacity for the
duration of the Commonwealth Games.
By successfully achieving the balance required, hotel owners and hotel managers
across Delhi will be able to maximize their revenue potential during the
Commonwealth Games. For more information on how your hotel can adequately
prepare their revenue management systems effectively for an increase in demand,
please contact IDeaS Revenue Optimization at www.ideas.com