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"Book-Par"
Part Deux
The
29 June 2006 edition of the Zeitgeist Z-News
As you
might imagine, we received lots of response from last
month’s post on developing new matrixes for measuring
CVB productivity. And, we received a couple that called us out for being
CVB apologists.
We actually enjoyed those messages because it reaffirmed for me that
there are still some that believe that, if a Bureau isn’t posting
big numbers, it’s the Bureau’s fault. Which ties directly
into the point I was trying to make. Was it the Destination Marketing
Organization industry’s fault when visitation levels went into
the dumpster in 2002? No...and I haven’t heard anybody say it
was. Everyone knew that it was a perfect storm combo of economic sluggishness,
a suddenly overbuilt lodging market, fears of terrorism and massive
consumer debt.
So, when business is good...why is it the Bureau’s fault that
their numbers are off? After all, the role of the CVB is like that of
a real estate broker. If houses are selling well on their own, the agent
is going to have a rough season because they have precious little inventory
to sell. And so it goes now that we are in a hot lodging market.
Which gets to the crux of most of the responses we received. While we
are being judged on our ability to sell room nights, sports facilities
and meeting space that may already be booked, CVBs are so much more
than that. And yet, we are often judged solely on sales of a product
over which we have no control.
So, allow me to expand on the original concept which, for group bookings,
revolves around the concept of conversion. Like hotels measure Rev/Par
(Revenue per Available Room), I suggested “Book/Par” (Bookings
per Available Room).
And, this measurement is all about the things that DMOs can control
or influence:
LEADS: Keep this barometer just like the DMAI
Performance Measures. It’s the number of qualified
leads DMOs can generate and the number of potential room nights they
represent. But let’s add another measure...that of potential attendee
spending.
BOOKINGS: The Number of Confirmed Bookings (and potential
Room Nights) in which the DMO had a meaningful role as a percentage
of the leads on which the Bureau was actually able to bid. In other
words, if the DMO is unable to secure facilities (space and/or rooms)
that are sufficient to meet the minimum requirements of the RFP, it
should not be counted against the DMO. After all, it developed the Lead
(and should receive credit for doing so)...but, if the product isn’t
available to sell, it’s hardly the DMO’s fault.
The DMO should still report out the number of bookings and the associated
room nights won, but shouldn’t the ultimate indicator shift to
the “kill” ratio. How many of the groups that were in your
sights (and when you had the “ammunition”) did you bring
home? Whether the economy is good or bad and whether room inventory
is being made available or not, the bottom line is whether the Bureau
converted the pieces of business that it had the room inventory to pitch.
Some respondents asked how this number could be derived. I’m not
a math major, but I’m thinking that every time a Bureau is unable
to bid on a piece of business because of a lack of room blocks from
partner hotels, that event (and its corresponding room nights) are subtracted
from the total of potential leads when it’s time to determine
Book/Par. That event data should be captured in a “Forfeited Business”
file for future analysis.
Here’s a hypothetical scenario: If a Bureau generates
leads worth 100,000 room nights and books 60,000, its kill ratio is
60%. However, if the hotel community only provides room blocks for 50,000
of those rooms and the Bureau lands them all, the kill ratio is 100%.
Which is a more telling indicator of Bureau performance? That it booked
less rooms...or that it booked more of the rooms that it was provided
to sell? That’s Book/Par.
We’re not done here, as I think that measurements on destination
image should also be part of the equation...but this is starting to
get long and we’re on the verge of a holiday weekend here in America.
As always...I’m interested in your take. And, we’ll be addressing
measuring the leisure market as well in the weeks ahead.
I’ll be on the road a lot over the next few weeks in Texas, Florida
and Indiana...so, if time prevents another post prior to
DMAI/Austin, I look forward to seeing many of you
there, and continuing this conversation in person.
Have a great weekend!
Bill
Wanna comment on this or other topics. E-mail Bill.
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