Whether budgeting or forecasting, predicting ‘add-on’ meetings and events spend no longer needs to cause you headaches, says Cheryl Hawksworth, managing director – EMEA, IDeaS Revenue Solutions
Venues and event organisers alike know how painful and time-consuming budgeting and planning can be, but as Benjamin Franklin supposedly said, “If you fail to plan, you are planning to fail!”
Understanding how to construct a budget and ensure an up-to-date forecast for your venue is fundamental in reaching your business goals. But too often teams rely heavily on labour-intensive spreadsheets – wasting precious time collecting, preparing and organising data.
Some organisations install rule-based pricing tools which speed up some parts of the forecasting process but must be manually updated in order to respond to shifting market conditions.
Now more than ever, businesses need to act fast and smart to identify additional revenue streams, especially when resources are limited.
Adding to your bottom line
The most recent ICCA Venue Sector Survey showed the income average split for meeting venues to be 45% from space rental, 33% from food and beverage (catering) and 22% ancillaries such as digital media and signage, leisure events (e.g. neighbourhood tours; wine tasting), sponsorship and more.
In US hotels, ancillary spend such as catering, audio visual and other equipment rental, generated USD$110 billion compared to USD$30 billion in venue hire, according to Kalibri Labs.
There’s no denying the potential of ancillary revenue to positively impact your bottom line: whether you measure success by revenue per square foot/metre, attendee density or revenue per attendee. Planning for non-room hire income is essential to understanding your total revenue and setting your business on the road to success.
Manual vs automatic forecasting
Manual data collection and forecasting is not only time-consuming, but it can also lead to errors that have grave implications for your business. Simply leaving a zero off a manual data entry, or pressing six instead of nine, can destroy even the best strategic forecast.
Manual processes are also an inefficient use of staff time and can result in narrow decision-making. How many times have people in offices around the world heard ‘We’ve always done it that way’? Ultimately, practices like this hit your bottom line with diminishing profits.
Ancillary revenue, especially MICE, is particularly tricky to forecast – even more so as inflation impacts both private and corporate events. Forecasting requires deep understanding and insights into data to maximise profitability. Thankfully automated technology exists to help you make tactical and strategic decisions, based on data you can trust.
Automated forecasting tools help boost productivity and efficiency, removing the burden of collecting, organising and analysing data, whilst providing a wide range of insights to help you make the right decisions about what business to take. You can also share forecasts and budgets across multiple departments with the click of a button.
With technology, you can base your revenue strategy on data instead of assumptions, giving revenue managers and commercial directors more time to identify and utilise previously untapped opportunities. With a more scientific approach to forecasting, strategic decisions based on credible information can be created for complex areas of ancillary and total revenue.
Achieving a total revenue plan for MICE
Technology – combined with advances in revenue strategies – presents a golden opportunity for venues to bridge the gap between revenue management, profit optimisation and the many other disciplines in their orbit. By breaking down information silos and combining data in real-time from all areas of your business, tracking performance and accurately forecasting is at your fingertips.
IDeaS’ has a suite of solutions for hotels and meeting venues, including RevPlan – a total revenue budgeting and forecasting solution and SmartSpace – function-space revenue management technology – that helps optimise profits across more of your room revenue streams. Streamline operations, save time and earn more money. Find out more at ideas.com
