Bookings Increase for Groups of Between 101 and 500 - CoStar

Excerpt from CoStar

Events Groups Face More Competition for Hotel Room Nights, Rates

Events business in the hotel industry has not returned to pre-pandemic levels, but when it does, it will be up against robust demand from leisure guests still seemingly willing to pay higher average daily rates.

Meeting and events business is returning to U.S. hotels slowly and not evenly distributed across all markets.

Many of the rules have changed, too, making partnerships more important.

During a Hotel Data Conference panel titled “The future of meetings and events,” Sarah Gulla, senior vice president of asset management at Pebblebrook Hotel Trust, said the demand segment is coming back with “a little bit of everything.”

“In some ways, some things have never changed. Big groups are returning, 30 to 50 persons, but for the short term we will not be seeing the corporate groups,” she said.

Heather Dameron, director of event strategy and recruiting at The Journeys Group, said she is noticing a rebound in groups of between 101 and 500 attendees.

Panelists said hotels that remained open during the pandemic are where the larger groups are staying and meeting.

Steve Enselein, senior vice president of events at Hyatt Hotels Corporation, said those hotels also host more meetings than hotels that temporarily closed when demand crashed.

“It is specialty groups, in places such as Orlando, not 2,000-person events, maybe smaller groups of, say, bodybuilders," he said, adding that meetings and events are expected to make up between 30% to 40% of Hyatt's revenue this year, and more than 40% in 2023.

Brent Namejko, director of sales at Cvent, said third-party hospitality and event providers such as his firm thought hybrid meetings would continue throughout the year at the start of 2022, but he now believes that will not be the case.

“Room blocks are going up, [average daily rate] is up 9%, and in July alone, up 15%. Customers are more confident, and fewer planners are asking for attrition and other clauses. They are more optimistic,” he said.

Gulla said larger-group planners, though, are sitting on contracts for longer periods.

“There definitely is some hesitancy on contracting, and clauses on force majeure have taken on importance,” he added.

“Short-term business is what is coming in for us. For example, 500 for Friday booked on Tuesday,” Enselein said.

Silence Is Not Golden

Major challenges facing this niche of hotel business are a lack of labor, the need for training and slow responses to requests for proposals.

Dameron said hotel firms need to be partners with one another, not competitors.

“There are challenges on both sides, but everyone is tired of Zoom,” she said.

The lack of city-wide events has reduced compression nights — when hotels are booked at 95% occupancy or higher — and performance differs by market, which is all the more reason hoteliers should be working together with tourism, destination and convention bureaus, panelists said.

“Twenty-three percent of [requests for proposals] come from new planners, and 71% of planners say they are not sure of the final destination when they start planning, which is utterly opposite from pre-COVID-19,” Namejko said.

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