Book ’em!

After corporate travel, the meetings market (or MICE as it is called) is the next most lucrative sector for hotels and is the slowest in tech adoption. With the convergence of new technology and changing customer demands and expectations, this space is next in line for disruption.

Hotels have many reasons to protect this source of revenues from disintermediation - the emergence of new, alternative spaces, the rise of a new generation of customers who want convenience and creativity, and the entry of non-hotel companies into the sector.

Last November, co-working giant WeWork paid $200 million to acquire Meetup, a service that makes it easy for groups to start regular meetings in real life. Other than marketplaces that match demand with supply, what's in demand are software solutions that help companies manage meetings - such as Meetup.

Expedia first put its foot into the MICE waters about when Germany-based product engineer Felix Undeutsch had to organise an offsite meeting in Amsterdam a couple of years ago.

Booking the ground transportation, flights and hotel rooms was easy but booking the meeting room was a hassle. "Everything was manual, very '80s," he said during a media briefing at the Expedia Partner Conference in Las Vegas last month.

And so Undeutsch took it upon himself to see if he could automate the manual process. "Hotels are overwhelmed by low converting RFPs. With one sale, there are 10-20 follow-ups. The process is not efficient."

With an eye on the market that's primarily driven by small meetings of under 30 people, Undeutsch realised that any small incremental improvement could lead to great dividends. According to him, this market is estimated at 60 million meetings a year, is worth US$400b annually and accounts for a third of hotel room nights.

Taking a technology angle to the problem, he went about creating a solution that would allow hotels to input price and inventory, handle sales enquiries and included a booking engine. "There's no need to call anyone."

Its first trial customer for the white label solution was Best Western in Germany and since its subsequent launch with other local chains in Germany, it's seen good results - reduced response time from hotels by 20x, a 6x improvement in the time it takes a hotel to create a quote, and higher lead conversion rates.

Previously, only 17% of meetings were booked in three days, today the share is 61%. And the percentage of quotes converted to sales grew from 10% to 35%.

Last year, it landed its first customer in Asia, Minor Hotels & Resorts in Thailand.

Undeutsch, who's now Head of MICE and Groups for Expedia, said the solution saves hoteliers time so they "can have more time for the bigger stuff".

His vision is "about automating proposals regardless of where they are coming from". He concedes it's not for all hotels but only those with a majority of small meetings. It works optimally for meetings of under 30 people.

The biggest obstacle to adoption is not technicality - "it's not rocket science" - but mindset. "Nobody thought people would book corporate meetings online."

He said Minor Hotels for example expects 20% of its meetings business to go online. "Once someone has tried it, the chances are the next time, they will book online."

As more small meetings move outside hotels to co-working spaces, for example, he also sees the possibility of the solution being adopted outside hotels. "The key is giving the customer what they want."

At heart is the changing nature of meetings and what people want from them. Berlin-based startup Spacebase, which won the WIT Startup of the Year in 2014, started off as a marketplace connecting buyers with sellers of "extraordinary locations" for their meetings.

Since its launch, CEO Julian Jost and his team have had to face several challenges, the biggest of which was customer education. "We are creating a market in an industry which is still very much offline. The industry being in need of digital transformation, showing customers that online booking is possible and safe is still one of our biggest challenges."

Another was finding and growing the right supply. Finding "undiscovered and extraordinary spaces" that would excite meeting planners was hard. "Existing (mainly hotel-) providers often lack the innovation/design/creativity to meet the expectations of the modern workforce."

Based on customer feedback on the difficulty of finding the right space, the company developed "a Spacebase bot-like algorithm, which finds the perfect space for your specific request, based on a number of hard criteria (such as location and capacity), as well as soft criteria such as atmosphere and style."

"Our white label solution allows us to mitigate many of these challenges because of the individual offering that we deliver to the customers."

It's also developed a software solution to help companies run and manage their meetings and has won its first major customer, a global technology company.  "From running the marketplace, we realised that our technical solutions were filling a big gap in the market. We decided to create the white label software solution, since it allows us to offer a more individualized solution for our customers (e.g. to comply with processes, procurement guidelines, legal etc.) and enables us to create a lock-in with the client."

Even as he pushes for automation and digitisation of a traditional offline industry, Jost believes the move away from going to physical offices to work will lead to a greater need for physical spaces for people to meet. "In my opinion, reasons for this are the sense of belonging to a community that is created when you sit in close vicinity to like-minded people working on similar tasks and that for most people, a spatial separation from private life and work life helps them sort their thoughts and focus on each of them at the place it belongs to."

The key for hoteliers is to ensure more of these smaller meetings stay within their premises and that means making it easier for customers to book their venues and of course, making their spaces more fun and creative to meet in.

Latest News