Groups Pricing Needs a Profit Lens, Not Just a Revenue One

A FLYR Hospitality product update, written by Senior Product Manager Maria Gârbea, sets out how its Groups tool prices group business on profit, not just room revenue.

A rate that only clears displaced room revenue can still be a poor deal once shoulder nights, ancillary margins, group commissions and transient channel costs are included, FLYR says — and the reverse can also be true.

Displacement is forecast by arrival date and length of stay, so stays that overlap a block on the shoulder nights are counted, not only guests who wanted the exact block dates. Both the group’s ancillary spend and the ancillary spend of displaced transient guests are run through margin, not gross revenue. Commissions on the group side and channel costs on the transient side are netted out.

The product shows two breakeven rates side by side: one revenue-based and one profit-based. FLYR says the gap between them shows whether ancillary margin, channel cost or commission is doing the work, and which way a team should lean in a negotiation. When the profit-based rate sits below the revenue-based rate, there may be more room to move on rate than the revenue figure suggests; when it sits above, holding the line may protect the bottom line.

Teams can still accept a group below the profit breakeven — for occupancy, market share or a long-term account — but FLYR argues that should be a conscious choice, with both figures in view.

Originally published by FLYR: Groups Pricing Needs a Profit Lens, Not Just a Revenue One