The Next Normal of Managing Hotel Group Contracts through Technology

Once states and countries have wrangled in their COVID-19 second waves and start to reopen borders (and distribute vaccines), confidence will inevitably reach a point where groups will book again. But the world of MICE will not look the same as it once was, and if you haven’t fully embraced the technologies that can expedite group contracts and payment processes then you won’t get the business.

While the large-scale conventions and exhibitions are off the table until the widespread distribution of a vaccine, smaller meetings and regional events are just around the corner – the upcoming holiday season representing one such opportunity for a resurgence. Not only will using the old paper-and-pen methods give the impression that your hotel isn’t doing its best to protect groups from viral spread , but nowadays you also need automation so as to not overload your lean teams.

As we saw with the past two recoveries after 9/11 and the 2008 recession, hotel teams learned to do more with less and this time hospitality organizations will be especially slow to ramp up hiring in the sales department even as business starts to return. The difference now is that the mandate for contactless guest experiences has also accelerated our adoption of end-to-end digital transaction platforms – no manual credit card authorizations required and no paper records.

Importantly, with the pandemic all but permanently changing many of our habits, your future group customers also won’t want to print forms to sign or even negotiate through an extended period of phone (or videoconferencing) conversations. They’ll want a frictionless bargaining process – virtual tours, detailed spec sheets, electronic contracts and web-based BEOs to fill out, all coordinated as fast as possible by your sales team.

Luckily, using a combination of customer-facing platforms and middleware, hotels can speed this process along with features that can:

  • Quickly deliver electronic contract documents that can be signed, timestamped, version coded or updated on the fly
  • Email or text private payment portals so that no credit card information is shared over the phone or via paper forms, thus reducing the chances of fraud and disputes
  • Configure multiple deposit dates and amounts for BEOs so that groups can split the total over a longer timeframe and across different credit cards
  • Layer in additional fraud prevention via payment portal closures after completion, card-not-present restrictions in the days prior to the guests’ arrival and card entry failure limits to deter brute force attacks
  • Send out automated past due notifications to the group planner as a reminder as well as to the sales manager in order to keep track of trailing accounts receivable
  • Connect approved online payments directly into the appropriate ledger within the PMS to decrease time requirements from the accounting team

As we’re all trying to find ways to win back groups business, I reached out to Conner Erwin at b4, a company specializing in secure online payments with its product TransForm, to learn about another intricate way that modern technology will help in the recovery. “If you want to drill down, just look at the interchange rates on credit card payments, for which using PCI-compliant transaction software may help reduce this part of the overall merchant fee. So, even though we’re talking small percentage deltas, these savings become significant when you’re dealing with large group contracts, enough for hoteliers to offer a tangible price discount during negotiations.”

Indeed, in the uncertain times ahead, money will be much tighter for businesses and groups as it has been for the average leisure guest. Contracts will be won by specific properties based on arbitrages of within a couple thousand dollars. This means that the cost savings you attain through labor efficiencies, payment flexibility, better interchange rates or any other inborn advantages can then be passed through in the form of a more competitive price to the prospect.

One other behavioral change that we’ve witnessed from this past summer’s vacation data is the speed with which transient hotel guests are booking. Oftentimes, travelers reserve a room on the Monday prior to a weekend getaway, spurred on by the continually unpredictable nature of lockdowns and staged reopenings. Groups may follow this pattern, and thus you will need to react almost instantly to incoming inquiries lest the group already book somewhere else. This makes technology essential to keep pace with the rapidity of the post-Covid group bargaining process.

In the spring, we all took the necessary steps to make our properties as contactless and safe as possible in order to prepare ourselves for the return of FITs and single corporate guests. Now is the time to review your tech stack again to see how you can enable it to facilitate groups while still minimizing costs.

The world’s most published writer in hospitality, Larry Mogelonsky is the principal of Hotel Mogel Consulting Limited, a Toronto-based consulting practice. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Larry is also on several boards for companies focused on hotel technology. His work includes five books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013), “Hotel Llama” (2015), “The Llama is Inn” (2017), “The Hotel Mogel” (2018) and “More Hotel Mogel” (2020). You can reach Larry at larry@hotelmogel.com to discuss hotel business challenges or to book speaking engagements.

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