Our Pulse Live webinar, which aired on March 16, saw Duetto’s Lloyd Biddle, Director of Enterprise Solutions, take the audience through positive insights into how group business could be bouncing back this summer.
“No matter what data sets you analyze, it is evident that in the hospitality industry’s recovery business transients and groups are the missing pieces of the new normal puzzle,” Lloyd told the audience as the discussion kicked off.
“This group segment comeback will require a renewed level of collaboration between hospitality sales and revenue management teams, many of whom are now consolidated in a commercial strategy organization and hold the title ‘director of commercial strategy’ or DOC,” he added.
Lloyd was joined by Kristi White, Chief Product Officer, KNOWLAND, and Jeffrey Emenecker, Senior Director, Analytics, Cvent, who provided their expert analysis on group business performance and trends to look out for.
Missed the webinar? You can register to watch On Demand here: https://go.duettocloud.com/pulse-live-mar22
Here’s a quick recap of the conversation:
Could sales see a centralization movement like revenue management has?
Kristi White: We're already seeing it. Hotels with the same owner that are near one another are coming back with a centralized sales team, irrespective of the flags that they're personally flying. We're even seeing it at the brand level.
And they're selling across multiple properties. Even with different owners, they're getting permission from these owners to be able to cross-sell because they can't find the right people.
And it's a reality that's probably not going away anytime soon.
What are the recent meeting dynamics and industry segment trends?
Jeffrey Emenecker: We've seen a lot fewer space-only meetings. My guess is a lot of that is going virtual.
We are starting to finally see some of the larger meetings accelerate now as well.
From a segment perspective, corporate has come back quite a bit, but it's still not back to where it was.
The other area that we've seen be very strong is the education segment. It has consistently overperformed throughout COVID.
Kristi White: We're slightly different. Corporate is almost recovered from a percentage of the business to 2019 levels.
When we look at a micro level, the top 10 industry segments from 2019 are also the segments that are least recovered; they're only sitting at on average about 40% recovered to 2019.
On the opposite side of that, segments like online retail, entertainment and media, agriculture, transportation, are at 70% or higher recovery to 2019. Online retail is 130% recovered.
So, the moral of the story is you can’t always look at what you used to get.
Where do you see the highest group rate increases coming from?
Kristi White: Under normal circumstances, not in the latter phases of a pandemic, it was always from new business. And the specific reason is with old business they knew what they paid in the prior years. So fundamentally trying to move them to higher levels gets troublesome because they feel like there should just be a CPI increase or maybe slightly more than CPI.
I think that as they're coming back, they have an understanding that there are probably going to be additional costs because we're cleaning at a rate that we've never cleaned before, we're putting different things in the room, so the cost has come up, so we'll probably have an opportunity to grow some rate from there, but it'll be interesting to see.
Lloyd Biddle concluded: “The current hospitality industry trading environment is unlike any business cycle that we have witnessed in recorded history. What are some of the key learnings for this unique recovery thus far? The high adoption rate of RMSs like Duetto made a difference, especially among the lower chain scales where a “race to the bottom” mentality (called irrational discounting) was averted. More specifically, the crisis response of altering forecasting algorithms to more heavily weigh current pace and pickup, and not primarily rely on historical trends, resulted in industry-wide ADR increases occurring before occupancy rose, which is an unprecedented sequence in past cycles.”
Catch the whole conversation On Demand and discover how group business is returning and what tactics your property should be employing. Simply visit: https://go.duettocloud.com/pulse-live-mar22