What Does SMERF Stand for in the Hotel Industry?

By Hotel Tech Report

Last updated January 26, 2022

3 min read


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Sorry to disappoint, but little blue cartoon characters aren’t the stars of this article - hotel sales manager tactics are. SMERF (or the SMERF market) has a totally different meaning in a hospitality context - one that we’ll explore in the next few paragraphs. Trying to diversify your business mix? Looking to fill some rooms in the off-season? By the end of this article, you’ll have gained a thorough understanding of SMERF in the hospitality industry, what benefits SMERF business can bring to your hotel, and how your hotel can attract SMERF guests and functions.

 

What is SMERF (Social, Military, Educational, Religious, Fraternal)?

Okay, let’s break down that acronym. SMERF stands for Social, Military, Educational, Religious, and Fraternal groups. Groups related to sports, entertainment, and recreation, like high school sports teams, fall into this category too. Common SMERF events include weddings, family reunions, religious seminars, and meetings for organizations like the Elks or Rotary Club.  Event planners at hotels like Marriott and Hilton near convention centers and CVBs (convention & visitors bureau) understand the power of SMERF business as much as anyone.

These groups book event space, room blocks, and F&B like corporate groups do, but there are some key differences. Unlike corporate group travelers, SMERF guests generally foot their own bill (rather than charging the company credit card). However, the SMERF segment is known to be more price-sensitive than corporate travelers since guests pay out of pocket for their expenses. Another notable characteristic of SMERF is because these guests aren’t traveling or booking event space for business functions, SMERF bookings often fall outside normal working hours - either at night, on weekends, or over holiday periods.

 

Key Advantages of SMERF

You might be wondering why to focus on SMERF meetings if guests are more price-conscious than your average high-rolling business traveler. Even if SMERF bookings aren’t going to fill your penthouse suites, this segment does present several compelling benefits.  Offering incentives to this market segment can be a great way to fill up lower tiered rooms and increase occupancy (even ADR on unsold rooms) at your property:

  • Fill need periods outside of working hours: Since SMERF events typically happen outside of work hours, this segment can be a perfect complement to a hotel’s existing corporate business. Does your hotel restaurant fill up during the lunch period but sit empty in the evenings? Is your RevPAR generally lower on weekend nights? SMERF can help you fill these gaps with events held on nights and weekends.

  • Fill off-season periods: In addition to booking outside of working hours, SMERF groups can also drive business during your off-season. Seeing as SMERF is a more price-sensitive segment, these groups are looking for the best deal. With students paying out of pocket, the local Model UN team probably won’t want to hold their summit on the busiest, most expensive weekend of the year. Instead, they’ll choose a less expensive date - which might be exactly when you need a little boost in occupancy.

  • Reliable group segment: SMERF is a reliable segment in all market conditions. Travel and economic trends can vary from year to year, and city-wide conventions can come and go, but the Smith clan is still going to hold their annual family reunion and the local chess club is still going to host their yearly tournament. Weddings, in particular, are more “recession-proof” than business functions; when companies tighten their belts or scale down conferences, couples still go all-out on the big day with extravagant F&B, A/V, and decor..

  • Size, budgets, and needs vary: Although SMERF groups have many similar characteristics, no SMERF group is the same. They come in all sizes and with a vast variety of needs and budgets. Therefore, hotels of all sizes and price ranges can target SMERF groups. Even if your hotel has limited F&B offerings or basic event space, it might be perfect for a SMERF group.

With these benefits, SMERF can be a strategic way to fill need periods and lock in repeat events that happen year after year.

 

How Can Your Hotel Attract More SMERF Business?

The first step to launching a SMERF strategy is to understand your existing SMERF business. What kind of SMERF groups are booking your hotel already? What can you do to encourage repeat bookings from the same groups? Nurturing the relationships you already have is a great way to secure future bookings and to help you understand what drew those groups to your hotel in the first place. This knowledge will help you effectively market your property to new groups.

Next, you can think about new leads to go after. Are there any local groups similar to groups who have stayed with you in the past? For example, if you’ve developed a strong relationship with a local chess club, maybe the local bridge club would be a good lead to investigate. Besides reaching out to organizations, clubs, or teams directly, you can sponsor or attend trade shows or work with the local destination marketing organization or convention and visitors bureau to spread the word about your hotel. 

As you start the prospecting process, remember that your SMERF contacts are unlikely to be professional meeting planners; they’re often volunteering their time, and maybe they’ve never booked a room block or signed a BEO before. Taking a little extra time to explain the process, answer questions, and offer advice can go a long way in these relationships. Although, from a numbers perspective, SMERF events might seem like they’re less important than a major corporate event, these events can be incredibly important to the attendees. SMERF guests will be delighted to see the hotel staff treating their event with the same level of care and attention as any Fortune 500 company’s event. And any extras you can throw in, like free airport pickups or an upgrade for a guest of honor will help you secure repeat business. 

There’s no perfect recipe to success with SMERF, so it’s crucial to learn as you go. After each event, make sure to ask for feedback from guests and employees to determine what you did right and where you can improve.

Do you have any questions about SMERF? Let us know!