Groups, business travelers booking hotels, but closer to arrival

Zoom meetings and hybrid workplaces have become part of the corporate vernacular since COVID-19 was declared a global pandemic in 2020, but business travelers still need to meet in person and online. group to have real time.

Worries about a looming recession and COVID variants also don’t seem to be going away, but hoteliers are still hoping and forecasting some increase in business and group travel in the fall. At the same time, reservation windows – the time between reservation and check-in – remain short.

“While SMERF (Social, Military, Educational, Religious and Fraternal) activities appeared to be continuing during the pandemic with shorter disruptions, businesses have been shut down and are only returning sporadically. Large corporations have relied on meetings and virtual gatherings throughout the pandemic and only recently have started traveling again,” said Mitch Provosty, chief financial officer of RREAF Holdings.

Hilton expects returning business travelers to take fewer trips, but with longer stays on those trips. (Conrad Los Angeles)

Business is booked in a short window with no shoulder nights, Provosty noted. Shoulder nights are Thursday and Sunday, weekends weekends. Attendees basically arrive for the meeting and leave when it’s over. This short booking window is possible because many hotel group calendars have business openings.

“We see more avenues for large corporate group activities in the future,” he added. “With a shorter booking window, the risk of future economic conditions or new variants emerging that alter group travel plans is much lower.”

Despite all the travel disruptions due to the pandemic, Provosty said, virtual meetings simply cannot replace in-person meetings.

“We’re learning that face-to-face opportunities build relationships and company culture that virtual meetings can’t build,” he said.

Additionally, groups are more cautious about peak nighttime engagements, said Christi Davis, senior vice president of the Loews Sales Organization, part of Loews Hotels & Co.

Hotel footfall by business travelers is stabilizing, but rates and leisure demand remain high. The business mix is ​​changing with strong performance in mid-market and local accounts, while higher-volume enterprise accounts still lag behind pre-pandemic levels, she said. .

Hoteliers expect business travelers to take fewer trips, but with longer stays, said Christiane Cabot Bini, executive director of business travel sales at Hilton. Mindful of corporate budgets, these travelers will maximize their time on the road, with an increased length of stay of 1.5 days per trip. They are also looking to engage and embrace tools and innovations that reduce friction points around their travel experience, she added.

A Hilton property, for example, is already noticing a big rebound in performance levels from before the pandemic.

“We achieved almost 92% of our pre-pandemic group room occupancy in 2019. Our normal group room target, based on our transient market share, is already back. The resort’s group segments haven’t changed much,” said Kevin Rosa, Director. Sales and Marketing at Hilton Sandestin Golf Resort & Spa in Miramar Beach, Florida.

Despite a slight drop in the total number of participants, the station welcomes more groups in a month than in the past. For example, 52 groups have booked for October, but demand is down 500 total rooms for the month, Rosa said.

The pandemic has changed the size of groups and how they come together once there, but it hasn’t changed their primary purpose: to network. The groups also meet to showcase new products, distribute company information and present or redeem rewards, Rosa said.

“Our team is seeing a record number of group bookings, but the nights contracted for each group have become smaller. This is felt more on the business side,” he added.

Spencer Whitehead, director of meetings and events at the French Lick Resort, said “groups are now competing for meeting spaces as they try to make up for missed years and income opportunities or reunite with colleagues” .

Indiana property groups continue to navigate post-pandemic environments by requesting more space and adjusting programming to allow attendees to participate at their comfort level, Whitehead added.

In addition to changes in length of stays and guest groups demanding more space, some hoteliers are noticing a change in the type of business travelers occupying their properties.

“We’re seeing fewer suits and more hoodies, which shows a shift in the type of travelers who stay for business,” said Mitchell Hochberg, president of property owner, investor and development company Lightstone, which has 28 hotels. in its portfolio in the United States.

“Today’s business traveler tends to have different travel habits and cares more about hotel experiences and neighborhood vibes than sheer convenience.”

Some business travelers, other than “bleisure” customers, are primarily interested in convenience and efficiency as they return to travel more mindfully, he noted. Do-it-yourself amenities such as self-check-in and take-out dining offers provide the streamlined experience these business travelers need.

“At this point, we haven’t seen any signs of an economy-related downturn,” Hochberg said. “Across the industry and within our portfolio, there has been a noticeable increase in advance bookings, indicating that the dim outlook for future travel that we have experienced over the past few years have faded. And while there is always the threat of a new variant on the horizon, we don’t see our customers letting that risk interrupt their plans.”

The Holiday Inn Oceanfront in Surfside Beach, SC is starting to see a return of business and group travel. (RREAF sheets)

Kevin McAteer, Concord Hospitality’s senior vice president of marketing and sales, said hotels in the company’s management portfolio have reported a steady return in business traveler demand.

For example, hotels in Concord, Texas saw a 10% increase in business travel mix between the first and second quarters. This same mix trend continues in the third quarter, McAteer said.

Industries that seem to be moving the needle vary from healthcare to consulting to oil and gas. Concord hotels in Salt Lake City are almost back to pre-pandemic levels, with up to 16% of demand coming from business travel.

Booming travel segments include government, transportation, and contractors.

“One travel shift that we’ve clearly noticed is the rise of solo business travel,” he said. “Increasingly, individuals are visiting the markets where they do business, particularly to regain or build the trust of loyal customers they haven’t seen in person for some time.”

Requests for proposals for smaller meetings — those of 50 people or less — have increased at a faster rate than before the pandemic. Booking windows continue to be much shorter than in 2019, which could prove beneficial for hotels in the third and fourth quarters, McAteer predicted.

“While there are real economic concerns and uncertainty about 2023, we believe stability in the hotel space can be expected,” he said. “A deep recession is not inevitable, but if we do suffer one this time around, the hospitality industry is in a better position to weather it and weather the storm.”

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