Hotel groups, meetings, and events business returned with a surge, as companies, couples, and social groups looked to fit two years of events into one, in 2022 and 2023. But now that business levels are settling down, what are the challenges of the industry? And more importantly, what do the solutions look like?
We caught up with our team of revenue strategy experts to get their advice on how the market is adapting to the new era of group demand, from internal niggles to external trials.
5 challenges impacting group business
1. Short lead times
Short lead times are still a big challenge. Companies no longer book in advance. We see hotels with low occupancy receiving calls for a group of 100 rooms but requesting a very low room rate and a quick decision. That's extremely challenging. — Jeong Pyon, Director of Hospitality Solutions, APAC.
The booking window has got much shorter for groups. Transient has always had a short booking window, but now groups can sometimes come in with around the same lead time. While it can be a pleasant surprise to get a small group booking come in unexpectedly, it does make it more challenging to plan. — Marlene Cazares, Director of Customer Success, North America.
2. Balancing transient and group
Transient has been strong but it’s starting to pare back in some markets. This coincides with a somewhat inconsistent return to corporate travel. Together, this creates challenges of high and low demand. The question is how do we smooth out the peaks and the valleys? Offering alternative stay dates can be the answer as this allows you to cater to everyone. For example, a group may want Wednesday through to Saturday, but you’re busy with transient going into the weekend. Offering the group Monday through Thursday is much more profitable. — Daniel Lofton, Director of Hospitality Solutions, Americas.
Read our 'How to complete a hotel revenue displacement analysis' blog.
3. Changes in meeting frequency
Group meeting frequency and length of stay have changed post-pandemic. People are doing a lot of remote work and a lot of online meetings. However, they still need to see each other face-to-face and be in the same room. Maybe this isn’t as often as pre-COVID, but group length of stay has increased. People are meeting less but going for longer. — Marlene Cazares, Director of Customer Success, North America.
The volume of groups is back. However, people are doing alternative meetings, including hybrid and online. For in-person events, attendance is being trimmed down. So, an event that might have been for 100 is now only for 75. And fewer bigger events are going on — annual conferences are becoming bi-annual. — Tomos Jones, Senior Customer Success Manager, EMEA.
4. Low corporate rates
We've gone through years of massive growth in transient rates and moving away from the corporate traveler because they had negotiated fixed rates that were bringing ADR down. But there's so much opportunity to bring those corporate and group rates up and as an industry, we must do it together. A rising tide lifts all boats, right?
We need to work together and sell people our cities. There are a lot of cities where people haven’t fully returned to the office. This impacts not only the hotels but also the restaurants and retail in these downtown and urban districts. It’s an ecosystem. Destinations need to work together and deliver true destination marketing. — Daniel Lofton, Director of Hospitality Solutions, Americas.
5. Internal negotiations
Sales and revenue work together when it comes to group bookings, but often prices are pulled together on a ‘gut feeling’ or the mood of the DORM or sales manager. There needs to be more consistency in pricing to protect the value of a hotel and to build trust and transparency in the team. A revenue management system that prices for groups, and that is easily accessible by all team members, drives revenue and breaks down departmental silos. BlockBuster, for example, enables team members to work together to craft the right price for the group, with rate discussions happening in the application. — Jeong Pyon, Director of Hospitality Solutions, APAC.
Hotels need to empower their teams with the right tools. Sales teams face many roadblocks such as system accessibility to create group booking links, extend group cut-off dates, increase room allotments, etc. Hotels need to empower their sales team to manage a group block themselves.. — Cornelio Encarnacion, Associate Director of Customer Success, LATAM.
