Jouko Virtanen from Takeoff Partners has overseen several successful expansions to North America. He says that in 2021, the same laws apply to how to make it successful as before—but you need to also turn the accelerating digitalization to your advantage.
By now, the covid-19 pandemic has impacted almost all industries in one way or another, but inarguably travel and events are among the hardest-hit industries. Takeoff Partners’ portfolio company MeetingPackage has been hard at work thinking how to help large hotel chains and small independent hotels in keeping their events and meeting venues business afloat.
During spring 2020, pandemic-related travel restrictions were put into place. Hotel bookings plummeted, and many hotels closed either temporarily or permanently. Although some hotels have been able to re-open their doors since, the future at large still looks uncertain to say the least. Second wave is a reality in many countries, and many others never got the pandemic under control.
According to Joonas Ahola, the Founder and CEO of MeetingPackage, the company has recently put much thought into figuring out how to help the hotel industry.
MeetingPackage’s offering is focused on cloud-based venue management software for selling meeting rooms and event spaces more efficiently online. As hotels are remarkable players in the event spaces industry, they form the core of MeetingPackage’s client base as well.
“The desire to invest is understandably zero but there is a need for agility for when the reopening eventually happens,” he summarizes.
Founded in 2014, MeetingPackage is one of Takeoff Partners’ portfolio companies with Markko Vaarnas holding a position in the company’s board for the past five years.
Commission-based model helps reduce risks
Before coronavirus, things were looking decidedly positive for both the meetings and events landscape as well as MeetingPackage itself.
The company holds one of the largest meetings and events distribution networks of globally with more than 300 distribution partners ranging from global Travel Agencies such as CWT to more domestic providers such as venuedirectory in the UK. MeetingPackage’s hotel customers include large hotel chains such as Nordic Choice Hotels and smaller independent hotels including Best Western Hotel International Brno in Brno, Czech Republic and Waterloo Hub Hotel in London, UK.
In 2019, MeetingPackage raised €1.5M for internationalization in Continental Europe.
Then, disruption arrived in the form of the pandemic and lockdowns. Their impact on the hotel and events industry started showing as early as in February 2020 when the first hotels closed down in Asia. In March, right before WHO declared COVID-19 a pandemic, big US hotel chains, such as Hyatt Hotels Corporation, Hilton, and Park Hotels & Resort, withdrew their Q1 and full-year 2020 guidance figures. Hotels in Spain were considered non-essential businesses and had to close, and Disney announced first the closure of its parks and then all Walt Disney World resort hotels. By April, around 4 billion people, which is roughly half of the world’s population, were in some form of lockdown. Events were cancelled as most work travel and almost all leisure travel had become impossible.
Ahola says this had a direct impact on MeetingPackage as well.
“Suddenly we had more cancellations than transactions. Even though hotels had fixed costs still running, they were forced to close their doors,” he describes.
The team at MeetingPackage put their minds into figuring out how to help and came up with two separate measures
The first was to add flexibility to the offering.
Before the pandemic, MeetingPackage’s booking engine was available with a fixed annual price. Now it is available at a much lower cost while the bulk of the price is built into a commission. This way, the risk of deploying the service is very low for the hotel, yet it allows them to win crucial time by selling meeting spaces in advance.
“If hotels start selling their meeting services only after reopening, they will essentially lose three months because that’s about how long it takes to get the bookings up to a normal level,” Ahola explains.
In addition to pricing model, the second improvement MeetingPackage made was to their service packaging.
“Until now, we had been so busy with serving large hotel chains that we never had the time to develop our offering for small hotels as much as we would have wanted to. Now we seized the opportunity and did it. Competition is increasing so small hotels are especially impacted and in need of agile solutions. Our self-serve software is available for them easily and at an affordable price.”
Shutdown can be time well spent
According to Ahola, not everything that is coming out of the pandemic is negative. There is a silver lining: it has given time for hotels to focus on digitalization.
“There is a lot of legacy software in use that doesn’t work properly any more. If a hotel or venue can afford to invest now, I strongly recommend updating to modern property and revenue management software.”
Many have done so, and the team at MeetingPackage has often found themselves acting as advisors on the matter while working together with their clients.
“Traditionally, there aren’t any people working at a hotel that would have natural responsibility over the company’s digitalization of meetings and events, so we’ve felt we are in a position to help our clients by advising them on the topic.”
Ahola believes that once the crisis is over and the industry recovers, it will become apparent who used the time to evolve and who didn’t.
“I think digitalization will become an even bigger topic in the events industry after covid-19 than it was before.”
As for MeetingPackage, they will not meet their pre-pandemic growth targets but things aren’t looking dire either. Ahola estimates the company revenue will grow by 1.5-2 this year compared to the previous year. Recent deals include ones with Radisson Hotel Group, Davinci Meeting Rooms from the US and Event Inc from Germany.
“We don’t serve any particular geographic as our clients include large hotel chains. Our clientele comes from all over the world,” Ahola concludes.