Hotels, Student Groups, and The Economy
It’s official. We are in the midst of an economic recession. I know this – not because CNN tells me so – or because I have been closely reviewing bailout spending. I know this because hotels that have not returned phone calls from student group travel planners for the last 4-5 years are now calling asking how they can “better serve” my customers. So, I thought it would be worth a few lines to share my thoughts on how student groups impact hotel revenue.
Many hotels choose not to work with student groups during the “good times”. The reason for this is simple – they do not spend enough money. Here are a few of the “problems” with student groups:
- Require much lower rates than convention or transient business
- Will not purchase breakfast for more than $10-$15 per person
- Do not order room service or spend money at the bar
- Can be intrusive to other guests when arriving/departing en mass
- Need special blocking consideration
So, why would a hotel want to work with student groups? Simply stated – because they are still traveling. While the convention business is evaporating in front of our very eyes, students are hitting the road to explore the world.
As a student tour operator, I cannot help but have a bias. That said, I believe hotels desiring long-term financial success should review their approach to student groups:
- Look Beyond ADR – Too often, hotels begin to ignore student groups when their Average Daily Rate (ADR) is high. Some hotels are hesitant to lower their ADR, even on nights where occupancy is low – resulting in a poor Revenue Per Available Room (RevPar). Consider offering student travel planners a better-than-competitive rate ONLY on nights that have historically low occupancy. Doing so will not have any effect on the transient (or convention) rate, and will ultimately create additional revenue for the property. The secret to this tip is to know your history and offer the aggressive rates 10-12 months in advance. Last minute “specials” will generally not result in new bookings and may insult student travel planners.
- Room Blocking – In almost every presentation I have made to hoteliers, I am inevitably asked about noise problems associated with student groups. These questions usually come from higher end properties that do not book an extraordinary amount of student business. Fortunately, a few simple steps can ensure a smooth stay for everyone. First and foremost, do not place flight crews and VIP guests on the same floor/wing as student groups. Second, assign student group rooms next to each other instead of intermingling them with other guests. Finally, sandwich student rooms between chaperone rooms. Great hotels will start looking at student group check-ins at least one week in advance and begin positioning rooms in a manner that will allow student group rooms to be separate from those of other guests.
- Communication – Here it is – the single greatest secret to success – in any sales field – RETURN PHONE CALLS. It is amazing how many hotels will not return a phone call if they do not feel that it will result in an immediate booking. My team has tried to reach some hotels for months, only to finally be told that there were no rooms available on the nights we were requesting, so why should they waste their time calling us back. WOW! Even if you are unable to accommodate student groups during the “good times”, simply communicating with student travel planners can be enough to keep relationships alive for the “less good times”. I can think of several hotels that have not been able to accommodate my groups for the last few years that are now receiving a windfall of bookings because they maintained a line of communication.
Nobody expects a hotel to turn away $250 per night from a convention group to book student rooms at $100. However, most (read “almost all”) hotels would enjoy increasing occupancy and overall revenue on at least a few nights per year. If hotels will consider the effect of student groups on revenue in the same manner that we should all look at the effect of a Money Market (or Savings) account on an investment portfolio – conservative but stable, the benefit of doing some ongoing business of this nature should be clear.