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Group management in RM
The Practical Guide to Revenue Management – Chapter 6
Group management represents a particular challenge in Revenue Management. Present in many sectors such as airlines, rail and hospitality, it applies to both leisure groups and business groups (“MICE”: Meetings, Incentives, Conferences & Exhibitions). Unlike individual bookings, group demand is unpredictable, often irregular and made up of variable volumes, making planning and forecasting much more complex.
This chapter explores the specific characteristics of the group segment, particularly the conversion rate, which measures the proportion of bookings that are actually turned into revenue. With rates often low, around 20%, group management requires precise strategies to accept the right requests, optimize inventory and anticipate cancellations.
What you will take away from this guide:
→ The fundamentals of Group Management in hospitality and transportation.
→ The key concept of conversion rate and its impact on Yield.
→ The concept of Displacement Cost and its multi-inventory variations.
→ Best practices for accepting, modeling and securing group bookings.
