Group hotel bookings: Guide for small hotels

What are group hotel bookings?

Group hotel bookings are bookings in which multiple rooms are reserved at once.

This rather broad definition means that it can be applied to small friend or family groups who are looking for a couple of rooms, or large corporate, tour or event groups who may be looking to book out your entire property.

Targeting group travellers is an ideal option for your small hotel, because it allows you to maximise your occupancy with one low-cost booking.

However, it’s important to remember that group travellers have different needs than solo travellers, couples and families.

Whether you are booking business groups or family groups, you will want to know what these guests are searching for from their small hotel experience.

What is a group rate in hotels?

A group rate in hotels is the rate you apply for people wanting to book multiple rooms in one reservation.

Between the ability to fill your rooms and the efficiency of dealing with a single group, there’s no better type of booking than a group reservation in hotels. The competition to win group bookings is therefore high, so hotels will offer a discounted rate in order to attract this business.

The discount for a group booking in a hotel will depend on a number of factors. Generally speaking, the discount will increase with the size of the group. The type of booking will also affect the group rate: event bookings such as weddings tend to demand more time and effort from your staff than, say, a tour group that simply needs beds for the night, or corporate travellers who may largely keep to themselves.

There are no go-to figures for group rates. Your level of discount will depend on the factors above as well as your break-even point, whether you’re in peak or low season, and the level of discount offered by competitors.

Why group hotel bookings are good for your small hotel

Group travel plays an important role in your revenue management strategy.

Group bookings are a powerful force, as it allows you to capture a chunk of travellers while only paying distribution and marketing costs for one booking.

Business groups often travel to a particular location for meetings or conferences, and may be interested in staying at your property. Family groups will book for family reunions or multi-generational travel experiences.

Travel groups, such as clubs or volunteer organisations, prefer to book authentic, local accommodations that allow them to immerse themselves in the local culture. By appealing to all of these groups, you will be able to boost revenue and increase customer loyalty.

How to set a group rate at a hotel 

Certain groups, such as tour companies and business travellers, will know exactly how to get a group rate at a hotel, so as a hotelier you need to know how to set your group rate in a way that wins you this group booking business.

The following three steps describe the basic process.

Step 1: Do your research

Work to understand what groups are willing to spend. Group booking professionals like tour providers will tend to have higher discount expectations, and be better negotiators, than one-time event bookings like wedding parties. And get a sense of your competitors’ group booking prices, perhaps by sending them a semi-anonymous email and asking for a quote.

Step 2: Identify your break-even point

The most basic formula for setting hotel room pricing – group booking or otherwise – is break-even point + profit margin = price. Whatever group rate you end up setting, it needs to make you money. Identify your per-room break-even point and ensure you don’t go any lower.

Step 3: Decide your profit margin

Having understood your break-even point, and uncovered what competitors are charging and what the customer might be comfortable spending, you just need to decide the level of profit you should plug into the formula above.

Group booking requirements for small hotels

The top features that travel groups look for in a hotel include:

1. Simple online booking process

Coordinating the logistics for group travel can be daunting, as there are many individual reservations to make for one larger group.

By offering a simple online booking process through a reliable online booking engine, and partnering with online travel agents through your channel manager, you can improve your group booking rate.

2. Additional services

Many group travellers are looking for additional services that will make their stay easier and more comfortable. Laundry facilities and concierge are just a few options that you might consider to appeal to travel groups.

3. Gathering spaces

Most travel groups book individual rooms for the members of their party, but they still want to be able to gather and connect after a long day of touring or business meetings. A lounge area, outdoor garden or restaurant and bar will appeal to both family groups and business groups.

Group reservation strategies for hotels

Online marketing strategies can be used to appeal to travel groups.

• Begin with an SEO campaign that includes targeted keywords and fresh, relevant content.
• Publish blog posts that showcase the amenities and features you offer to groups who book a stay at your property. 
• Edit your website pages to include valuable keywords that will increase your visibility online.
• Promote your group discounts and special rates on social media, as this can generate buzz about your property.
• Implement a property management system and online booking engine complete with a channel manager, you will be able to attract travellers from a wide variety of market segments.

Travel groups often utilise distribution channels such as OTAs to find out more information about the best deals available, so it’s critical that you have a solid distribution network and easy booking process in place.