February 14, 2024

Group Travelers Prioritize Wellness, Urban Destinations

Higher Occupancy, Shorter Booking Windows Make Juggling Group Demand More Difficult for Hoteliers

Groups traveling for business in the U.S. are seeking broadened wellness options, hotels that include facilities beyond the typical banquet hall, easy airport access and opportunities to give back to the community.

Meanwhile, companies and associations are looking to reward their best performers with excursions and off-site events, according to many hotel management companies.

Group hotel reservations are also shifting back from resorts to cities — and in many cases, secondary urban destinations. And a growing percentage of group stays are being booked during the week instead of weekends as work-life balance takes priority.

“One factor is remote work. Teams don’t work together as often as they used to, so when you do get them together, there’s more of an emphasis on team-building activities,” said Pete Sams, chief operating officer at Davidson Hospitality Group, whose properties include the Westin San Francisco Airport, Canopy by Hilton Philadelphia City Center and Hilton Los Angeles Culver City.

“We’re getting more requests for outdoor events and activations like archery and axe-throwing. They’re looking for destinations with activities where they can encourage bonding."

Front and center in many group booking requests is wellness, whether related to food-and-beverage offerings or opportunities to start or maintain a fitness regimen.

“One of the first questions we get is, ‘What do your fitness facilities look like?’” said Tammy Routh, senior vice president of global sales at Marriott International, who added that many group organizers request activities such as yoga in the morning or nearby hikes in the afternoon.

As for food and beverage, more groups are requesting a wider range of non-alcoholic beverages, or “mocktails,” as well as healthier and often locally-sourced food, including gluten-free options and those that take food allergies into consideration.

“We can’t just produce the same meetings that we were producing pre-pandemic,” Frank Passanante, senior vice president and global head of sales at Hilton Worldwide, said. “The pandemic accelerated the way people feel about wellness, whether it means sleep, nutrition or food and beverage menus.”

CoStar reported in January that group business is surpassing 2019, pre-pandemic levels.

Groups from industries such as banking, health services and retail booked more rooms in 2023 than they did the year prior, according to Christopher Finelli, vice president of sales and marketing in the Americas at Hyatt Hotels.

Last year, the company responded by debuting its Wellbeing Collective, which highlighted 30 hotels the company says offer wellness-related services specifically for group attendees, Finelli said via email.

Groups are also seeking to shorten trips, and part of that is quick and easy access to the airport from the hotel.

“Airport accessibility correlates to a shorter meeting,” Sams said. “You don’t want to waste a lot of time getting to the destination, so we’ve seen more of an emphasis on a shorter commute.”

That means hotels in traditional group destinations such as Las Vegas, New York and Oahu did particularly well last year.

“Associations are back to booking citywide conventions,” Routh said. “And incentives are really strong. Everyone’s trying to find a way to reward people.”

But demand has also spread to smaller cities as groups prioritize value along with experiences. Urban alternatives such as San Diego, as a substitute to Los Angeles; or Indianapolis, as a substitute for Chicago, have also seen an uptick in group demand for hotels, Sams said.

“Chicago and New York were part of the first tranche of recovery, but now the secondary cities are coming back,” he said. Groups “can get a better price point, but there is still lots of activity, restaurant options and offsites.”

Groups are also prioritizing hotels that can provide opportunities for either companies or business associations to give back to the community that they’re visiting. For attendees with the time to go offsite, some hotels offer opportunities to clean up a nearby park or school, according to Passanante.

Some hotels also offer on-site activities.

Groups recently staying at Southern California’s JW Marriott Desert Springs Resort put together packages with folded American flags and personalized notes that were sent to servicemen and servicewomen overseas during the holidays, Routh said.

Greater demand, and higher expectations, from groups create challenges for hoteliers — especially since the booking window, between making a reservation and arrival, remains short for many groups.

“Groups are saying, ‘Don’t deliver us a four-walled box,’” Passanante said. “Give us unique venues beyond typical hotel space, like rooftops or repurposed restaurants or flexible suites or outdoor spaces where we can produce events or meetings.”

Marriott’s Routh added: “Everybody’s talking about the customer looking for something new, unique, and focusing on the experiences. Groups are thinking, ‘How will I create attendee engagement so that people will walk away thinking that that was the best meeting [they've] ever attended?’”

Copyright 2024 CoStar Group. All rights reserved. From https://www.costar.com. By Danny King, HNN contributor.

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