January 03, 2024

Hotel Group Bookings, Revenue Ramp Up in 2024

Larger Meetings, Events Enter the Mix

Group demand is coming back at a stronger clip in 2024, and for some hotel companies it's shaping up to be a landmark year.

Tammy Routh, senior vice president of global sales at Marriott International, said in an email interview that a majority of the U.S. hotel markets continue to see "booming demand" for groups.

Markets that continue to feel a positive effect from the demand segment across Marriott's portfolio include New York City, Chicago, Baltimore, Los Angeles and Minneapolis, she said.

"The pace of recovery certainly varies, particularly in specific markets that have underlying circumstances as it relates to large convention business and or overall perception of the city," she said. "San Francisco and Seattle are two examples that have not rebounded as quickly, compared to peak years."

Both cities, however, are working hard to improve these perceptions by hosting quality events.

Peter Hart, complex general manager at the Hilton San Francisco Union Square, said via email that while San Francisco's citywide event pace will continue to be challenging in 2024, there are "strong pipelines for the future and [we] are encouraged by the citywide pace for 2025 and 2026."

As for the types of groups that are leading the demand, Hart said it's still regional small- to medium-sized meetings.

He said that the city is seeing an increase in business from the educational and SMERF — social, military, education, religious and fraternal — segments than in previous years.

"As meetings become more regionalized, we continue to see bookings on a shorter-term basis within a 12- to 18-month period. However, there's still an appetite for meetings that book longer term, especially those that have a national or international attendance," he said.

While small- to medium-sized companies were the ones leading the recovery in group demand across Marriott's portfolio, Routh said larger meetings are now returning.

Marriott is working with its customers to secure availability into future years due to limited availability in certain markets and in peak times, she said.

Marriott's events team is back to normal staffing levels, which Routh said will help sustain this volume of group demand.

Asad Ahmed, Hyatt Hotels Corp.'s senior vice president for Americas commercial services, said via email that 2024 is shaping up to be a "landmark year in the recovery of group business" for the company.

Hyatt's group demand and revenue continued to build throughout this year and contributed to Hyatt's overall results, with third-quarter 2023 group revenue up 10% compared to 2022 and up 5% compared to 2019.

Hyatt has achieved particularly strong bookings in key urban destinations such as at the Hyatt Regency Chicago, Manchester Grand Hyatt San Diego, Park Hyatt New York and Park Hyatt Chicago. Bookings at these properties are already outpacing 2023, Ahmed said.

Group and event bookings continue to rise within Hyatt's lifestyle hotels as well, including at the Thompson Atlanta-Buckhead in Atlanta; The Seabird Resort in Oceanside, California; Mission Pacific Hotel in Oceanside, California; and Wild Dunes Resort in Charleston, South Carolina.

In Peru, group demand at Highgate's Westin Lima Hotel and Convention Center is pacing up against 2023.

The start of this year included hurdles such as political unrest and social conflicts, which caused a delay in recovery, said Ítalo Bustíos, vice president of sales and marketing for the Caribbean and Latin America at Highgate.

"We are projecting to be between 80%-90% [recovered] against 2019 in both groups and events," he said. "We are expecting to be 40% above in [group] room nights against 2023 and 80% above in revenue, which is because the [average daily rate] has risen these past few years."

The booking window for groups remains shortened and many corporate travel clients are increasing budgets to send employees on trips, Bustíos said.

"So even if our on-the-books [business] wasn't much higher than the year before, we would still be optimistic we would close a lot of groups in the short window of time," he added.

The Westin Lima Peru's main feeder market for group business is the U.S. Other feeder markets include Mexico and Spain. Demand for events and catering, however, comes mostly from local businesses. This year, 70% of its events and catering business has been from local demand whereas only 30% is from international clients.

"For 2024, we expect that to change a little bit, maybe go towards 60% [and] 40% or 50% and 50% in terms of catering and events," he added.

While Peru's political unrest was communicated during the first three months of 2023, it wasn't communicated well that Peru is now fully open and safe. Because of that, there are till some group clients of the hotel that are hesitant to book, Bustíos said.

"We're always trying to convey that message to our clients that right now everything is safe," he added.

Davidson Hotels and Resorts Chief Operating Officer Pete Sams said meeting and group business is a critical and large makeup of its business. His company is projecting 1.5 million group rooms in 2024 across its 83 hotels.

Davidson's total revenue is expected to grow to roughly $2.1 billion, and much of that is on the back of group recovery and ancillary banquet spend, he said.

"We are certainly up in group, the pace is encouraging, and we are expecting to exceed this year by 25% in total group year over year," he added. "Now some of those increases year over year are inflated by some really unique projects that we undertook in 2023. Hotels such as [Lake Tahoe Resort Hotel] we converted to a new Margaritaville ... that will be the first ski-in and ski-out Margaritaville in the nation. So you can imagine the year-over-year growth coming off of a renovation will be enormous."

Sams said that some of Davidson's tertiary markets are expected to have a higher trajectory in group recovery for 2024 compared to some urban city centers. Double-digit growth is expected in locations such as Spokane, Washington; Charleston, South Carolina; and Fort Worth, Texas.

Omni Nashville Hotel Director of Sales and Marketing Tod Roadarmel said Nashville remains a strong meeting demand destination.

Cvent named Nashville the No. 2 destination in North America in 2023, just behind Orlando, Florida. This is based on total number of meeting inquiries and requests for proposals, he said.

For the first quarter of 2024, group booking pace at the hotel "remains brisk, especially for the short-term market," Roadarmel said.

"Our world came tumbling down after March 2020. [For] 12-18 months, we really lost productivity during the pandemic. But we're fortunate the demand has really taken off after that 12-18 months. Our first quarter remains strong [against [2023] and even back to 2019."

The Omni Nashville Hotel is also seeing a lift in group revenues, thanks to a boost in rates and food-and-beverage spend.

At newly opened hotels such as The Crescent Hotel, Fort Worth, General Manager Robert Rechtermann said group demand strategies have been in the works for about a year now.

The hotel opened November 2023.

"We did a lot of meetings with Visit Fort Worth and Convention Visitors Bureau and really looking at what's coming into Fort Worth," he said. "Fort Worth is changing; a lot of new office buildings being built. So we've been booking into 2024 for some time."

Rechtermann said he expects a majority of business groups to fill the hotel's event space from Sunday through Thursday, then social groups on the weekend. His team is also targeting higher-end groups that are willing to spend more on food and beverage.

Of the 200 hotel rooms the Crescent Hotel, Fort Worth has, Rechtermann's team is hoping to fill between 60 and 80 rooms per night for group travelers.

Rechtermann feels that being in close proximity to Dallas/Fort Worth International Airport will draw in guests.

"We just need to convince people it's OK to go to Fort Worth and you don't have to stay in Dallas," he said.

Copyright 2024 CoStar Group. All rights reserved. From https://www.costar.com. By Dana Miller, Hotel News Now.

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