White Paper

The Commonwealth
Games: A Strategy Guide
for Indian Hoteliers
One of the biggest sporting events in the world will come to the Indian Sub
Continent in 2010 – the Commonwealth Games in Delhi in the first time the
event will be hosted on Indian soil.

Since the British Empire Games were first hosted in Canada in 1930, the
Commonwealth Games has grown into the world’s third largest regularly staged
sporting event after the Olympics and FIFA World Cup.

Sivaprasad Gangadharan The 2010 Commonwealth Games is going to be largest Commonwealth

Games event ever. There are going to be 17 sports and over 285 events. Also,
Regional Director -
72 nations will be competing against each other. It has also been predicted that
Subcontinent Sales
the Commonwealth Games at Delhi will increase the capital’s GDP by up to
49 percent – but there are question marks around whether local hotel managers
who see Rupee-signs flash in front of their eyes – will hoteliers experience the full
economic benefits of this major event?

Major events provide a unique opportunity for hoteliers all around the world – a
chance to increase their revenue potential and improve their ongoing financial
stability. However, more often than not, many hotel owners and hotel managers fail
to recognize the need for the right type of ‘pre-event’ planning.

Without a proper level of planning prior to the Commonwealth Games, local

hoteliers may either find themselves overwhelmed by the patronage they experience
when the event begins, or underwhelmed by the lack of occupancy due to the
gouging of rates. In line with this, hoteliers may find they do not reach their full
revenue potential like they had originally hoped.
 2 IDeaS - A SAS COMPANY The Commonwealth Games: A Strategy Guide for Indian Hoteliers

While there is always a great deal of excitement and high expectations in the
hotel community when a major event approaches, there is also a high degree of While there is always a great deal of
uncertainty around what strategies will be most effective. In the lead-up to the excitement and high expectations in the
Commonwealth Games, hoteliers from across Delhi may be asking themselves: hotel community when a major event
Will we manage to capitalize on the increased demand for their rooms? Will we approaches, there is also a high degree of
be able to balance the huge demand from the Games attendees willing to pay uncertainty around what strategies will
very high rates with the need to please and maintain our existing customer base be most effective.
(perhaps at much lower rates)? Will this fabled demand actually materialize, or will
cancellations and no-shows result in rooms remaining empty throughout the event?

To help address these issues for local hoteliers in Delhi, leading revenue
management provider, IDeaS, has accessed their expansive knowledge base and
sifted through streams of data collected during major sporting events from around
the world to assess if there are any lessons that can be learned by Delhi hotel owners
and managers.

The result of this research has provided an in-depth analysis of what has happened
during past major sporting events (including Grand Prix’s, Major Tennis
Tournaments, Euro Football Tournaments). The data highlighted what worked
and what did not and delivered some comprehensive recommendations for local
hoteliers to follow to ensure that revenue is maximized.

IDeaS Recommendations for Delhi Hoteliers:

Minimum length of stay – Over
the course of the Commonwealth
Games event period, Delhi hoteliers
are encouraged to enforce minimum
length of stay of requirement. This
will encourage longer booking periods
and will have a positive impact on
occupancy levels throughout the area.
The length of stay requirements
imposed by hoteliers would need to
differ according to the price points the
hotel is pitching itself at and its target
market. Less expensive family orientated
hotels should look towards a longer
minimum length of stay as this will
probably entice families to extend their
trips, whereas higher price oriented
hotels may face tougher competition
from wealthier clientele to enforce
longer minimum booking requirements.
Local hoteliers should also consider
implementing extended length of stay
packages. These could include food and
beverage and reduced rates on non-
major sporting days. These packages
should be made available during the
booking process or as part of an ongoing
Over the course of the Commonwealth
marketing program to confirmed guests.
Games event period, Delhi hoteliers are
Find the appropriate ‘balance’ – encouraged to enforce minimum length of
Paying careful attention to the balance stay of requirement.
between normal base business and the
actual period of the Commonwealth
Games will help guarantee that all long-
term occupancy levels will be improved,
while still maximizing the patronage
levels during the event.
Research undertaken by IDeaS has
shown that the initial days of the
Commonwealth Games will see an
increase in overall demand, but it has
also shown there is a potential for many
customers to be hesitant due to pricing
and logistical concerns.

Clarity. Confidence. Control.

For more information, visit IDeaS online at www.ideas.com
 3 IDeaS - A SAS COMPANY The Commonwealth Games: A Strategy Guide for Indian Hoteliers
A carefully planned strategy aimed
at this segment of the market will be
needed to maximize occupancy levels.
This strategy should be developed
between the hotel owner and hotel
manager and also any relevant sales and
marketing staff involved in the hotel.
In terms of generating revenue from
ancillary services, hoteliers across
Delhi should not put too much focus
on their food and beverage efforts on
days of major sporting events. Food
and beverage revenues have shown to
come in below expectations on major
event days during the event period. It
is therefore important to focus both
meeting and event sales and food and
beverage marketing efforts on non-
major sporting event days, as there
will be a greater need to drive revenues
during this period. Occupancy levels
should also allow hoteliers to create
attractively priced room plus food and
beverage/meeting packages throughout
the Commonwealth Games.
Optimal pricing strategies – The
pricing strategies in the lead up to the
Commonwealth Games will have to be
carefully managed by individual hotels
in Delhi. While an expected increase in
demand on significant days will allow
rates to be driven accordingly, this will
not be the case on other less significant
days.
IDeaS Revenue Optimization
recommends that a careful and direct
marketing strategy is put into place to
entice visitors to arrive earlier than the
significant periods of the event. This
would mean hotels would need to pay
significant attention to particular days.
Clarity. Confidence. Control.
For more information, visit IDeaS online at www.ideas.com
For example, at the recent 2010 South
Africa World Cup: each town that
hosted significant matches needed
to not only focus on the day of the
match, but also the days preceding. For
the World Cup Final being held on a
Saturday night in Johannesburg, hotel
owners and hotel managers in each city
needed to pay particular attention to
days such as the preceding Wednesday
and Thursday by using optimal pricing
strategies.
Pre-payment plans – To minimize
the impact of costly last-minute
cancellations, it is recommended that
Delhi hotels implement a system of
phased pre-payment restrictions.
By clearly stating the terms and
conditions of ‘no-shows’ and
cancellations, hotels will be able to
dramatically minimize any potential
negative impact on revenue. If, as
expected, there are a large number
of cancellations over the course of an
event, these pre-payment plans will
allow hoteliers to recoup a large slice of
their lost profits. These profits will then
be complemented by last minute fill-ins.
It is vital that Delhi hoteliers check their
group and transient cancellation policies
to make sure these are watertight, clear
and concise. Not all bookings need to
be 100% guaranteed or pre-paid, but
for particular segments it is definitely
recommended that hoteliers fence
bookings. Local hoteliers need to make
sure that for those segments that are
fenced, that conditions of prepayment
or cancellation are clear and easily
understandable for the customer and
the sales and reservation teams. This
will avert any nasty discussions or legal
battles.
Overbooking – Appropriate
overbooking levels should be set by
hoteliers across Delhi to counteract the
expected rise in cancellations.
Overbooking will be a key part to
achieving 100% occupancy for the
Commonwealth Games for hotels
across Delhi. Data observed from major
sporting events around the world has
shown that in most cases hotels did
not reach more than 95% occupancy.
Depending on a hotel’s business mix
and the number of guaranteed bookings
it has, it can be recommended to
overbook a hotel by at least 5%. This
should gradually be reduced as the
transient pace increases and groups
are being washed to more accurate
numbers.
The implementation of these
recommended strategies, combined with
careful and detailed observation of the
levels of demand, will allow hoteliers
to achieve the correct balance between
price and demand. Another area of
the hospitality industry that needs to
be understood when preparing for an
event is the growing popularity of third
party booking sites, which now mean
customers throughout the world can
book their hotel visits around the clock.
This also means they have access to the
prices on offer at numerous hotels in
any one city or country simultaneously.
 4 IDeaS - A SAS COMPANY The Commonwealth Games: A Strategy Guide for Indian Hoteliers

Importantly, with all hotels in and around Delhi competing for the same client
By successfully achieving the balance
base, particular attention needs to be paid to ensure a reasonable amount of rate
required, hotel owners and hotel
parity is on offer between hotels. While visitors will expect higher rates than
managers across Delhi will be able to
normal, they will be sure to compare prices with different hotels to ensure a
maximize their revenue potential during
reasonable level of consistency.
the Commonwealth Games.
A thorough market analysis prior to the event will also allow for a range of succinct
marketing tactics to be developed, helping your hotel reach its full capacity for the
duration of the Commonwealth Games.

It is of pivotal importance that in preparation for an increase in demand (especially

due to a sporting event) that hoteliers adequately prepare their businesses. Hotels
form a major part of the local tourism industry and can often play a more
important role in shaping how a guest views the host city, rather than the major
event itself. This can have either a positive or negative effect on the long-term
financial stability of an entire market, and is an important aspect to consider when
planning for a major event.

By successfully achieving the balance required, hotel owners and hotel managers
across Delhi will be able to maximize their revenue potential during the
Commonwealth Games. For more information on how your hotel can adequately
prepare their revenue management systems effectively for an increase in demand,
please contact IDeaS Revenue Optimization at www.ideas.com

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