NEW MEETING MIXER: The hotel industry is seeing small meetings begin their return, with most planners booking for the second half of 2021. More planners are organizing hybrid events that feature live streaming of in-person events to attendees that cannot or do not want to travel or meet face-to-face in the age of COVID-19.
As public health agencies expand COVID-19 vaccination programs across the U.S. and states ease up on public-gathering restrictions designed to keep the virus at bay, the hotel industry is seeing small meetings begin a comeback.
On March 10, Knowland reported meetings in the U.S. increased 110 percent from January to February.
“January is always a little bit slower of a month, but this was a significant pickup,” White said. “It’s the biggest pickup we’ve seen month over month since the very beginning of tracking it back at the beginning of the summer.”
That’s when Knowland noticed markets closed because of the COVID-19 outbreak began to reopen. “That brought some different volume back in,” White said, adding meetings “are not coming back in dribs and drabs. They came roaring back.”
“It was almost as if companies knew that meetings were going to be allowed the next week, and they all called and booked a meeting,” she said. “There wasn’t that sense of hesitancy.”
TOGETHER AGAIN: The U.S. hotel industry is beginning to see a comeback in small meetings more than a year after the coronavirus pandemic put a stop to public gatherings. Episode 317 of Lodging Leaders podcast explores the state of the small meeting sector and how hotels can grab their share of the market resurgence.
Knowland’s report also noted that in February the average number of meeting attendees was 39. It was the same number reported in February 2020.
Thirty-nine people makes for a small meeting, but that’s not unusual in the meeting-planning world.
White said it’s a “fallacy” that most meetings are large conventions when, in fact, the majority of meetings in the U.S. are small.
“Sixty percent of the meetings that occur fall under the 100-person mark,” she said.
“The vast majority of meetings that are physically occurring aren’t the behemoths that we’re all thinking about. They’re in that smaller space. The behemoth meetings, the ones above 500 people, actually make up less than 4 percent of the meetings in the United States.”
MEETINGS BUSINESS: Knowland’s latest report shows corporate meetings account for the majority of small meetings booked in February. Kristi White, vice president of product management at the analytics company, said this is a sign that pent-up demand for meetings is beginning to unleash and hotels should start to promote their spaces.
With regard to the event space, Knowland noted that in February meetings’ square footage increased year over year, largely because of social distancing protocols created during the coronavirus pandemic.
Though, most meetings in 2020 were leisure-driven and included events such as weddings and family reunions, Knowland reported that in February corporate business accounted for nearly 62 percent of meetings.
White said although the term “revenge travel” usually refers to leisure bookings, she believes businesses are part of the pent-up demand hotel-industry forecasters expect to be unleashed in the last half of this year.
“I think we’re going to see the same thing in the meeting space,” she said. “The minute companies start seeing some of their competitors or their vertical contemporaries start to meet, then it’s going to become this keeping-up-with-the-Joneses moment where, ‘Well, hey. If they’re over there meeting, I’ve got to be out having a meeting as well.’
“I think we’re going to see a little bit of that toward the back half of the year, but seeing those markets rebounds instantly did that nice gut check for me that I’m not off in thinking we’re going to see this pickup fairly quickly.”
Northstar Meetings Group on March 30 reported its PULSE Survey revealed 81 percent of meeting planners will hold their next in-person event sometime this year. Fifty-nine percent of that business will occur in the second half of this year while a quarter of the 900 respondents plan to hold events by end of June.
MORE HYBRID EVENTS: In Episode 316 of Lodging Leaders podcast, Lee Hunter, chair of the Hunter Hotel Investment Conference, said organizers are crafting the industry’s first large hybrid event that will include in-person sessions as well as live streaming and recording of the same sessions. NorthStar Meetings Group on March 30 reported its PULSE Survey of more than 900 planners shows the growth in hybrid meetings.
Hoteliers, Get Busy
Realizing that most meetings are small and corporate-meeting demand on a growth trajectory, Knowland’s White said hoteliers need to get pro-active in selling space and rooms.
“Let’s get our people out there talking to these companies because the companies that are meeting now are the companies that are going to continue to meet,” she said.
“If you have an insurance company meeting in your hotel, chances are there other insurance companies that are meeting in other hotels. Your salespeople can start tapping into that insurance market, dive into that particular vertical and start to maximize wallet share there.”
Other hot prospects are local companies that have not reopened their offices. “Some are getting to the point where they need to have client meetings but they don’t want to open the office and do all the deep cleanse to bring strangers in,” White said.
It costs $500 to $1,000 to have an office deep cleaned before and after a meeting, she said. So why not book at a hotel where the clean-and-save protocols have become part and parcel of doing business.
Increase in Millions
In her current position, she’s leading the effort to make sure the hotels in Spire’s nationwide portfolio grab their fair share of the revival in meetings during and post-pandemic.
Morrison has seen some promising signs of a return to business as bookings for small meetings began to come in the first quarter of this year.
“We’ve seen a tremendous turnaround in the group bookings, the meeting segment,” Morrison said, noting $4 million in meetings booked in the first quarter of 2021, a 70 percent increase over the fourth quarter of 2020 when $1.5 million in meetings were booked.
Both White and Morrison say meeting planners are booking close to the meetings’ dates. It’s a trend they say is a result of the pandemic and a sense of uncertainty that lingers in planning activities.
White said businesses are booking less than 30 days in advance and groups are within the 60-day window. Anecdotally, she said, Knowland’s hotel clients say customers are calling Friday for a meeting on Tuesday.
“Those may not be a lot of meetings with guest rooms, but it’s law firms needing to do a deposition or accounting firms that have got to get their people together to do a training because tax codes changed and things like that. So that is definitely coming back very, very quickly.”
Morrison sees a difference in booking activity as well as the types of meetings taking place in markets that have stringent COVID-19 restrictions in place versus those that do not.
“Everything’s last minute more so now than ever,” she said. Most of Spire’s meetings have been social, including small weddings of about 10 people. In states where coronavirus restrictions have eased the gatherings are larger such as sports teams in tournaments. Spire has also booked some government and health-care business meetings.
The pandemic crisis has changed the request for proposal or RFP process at hotels seeking to win meetings with businesses and associations. White said in some cases meeting planners are not putting out RFPs because of short booking windows and the small size of meetings.
Morrison said for planners who do want a contract, the agreement has a detailed force majeure clause specific to the coronavirus threat.
Force majeure was an oft-spoken phrase when the coronavirus outbreak began to impact the hotel and convention business in March 2020.
The term is French for “superior force” and it’s a contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise. In the case of 2020, that would the COVID-19 outbreak.
Morrison said meeting planners want very flexible contract terms.
“I don’t think I’ve read as many contracts in my entire career as I have in the last year,” she said. “Everybody has a COVID-impossibility or a force majeure clause that they’d like to insert.”
Spire Hospitality remains flexible with meeting contracts, Morrison said, including allowing customers to cancel meetings without stiff penalties up to June 30.
“That has helped us close a lot of business, especially small meetings.”
White said hotels that have reduced staff because of a downturn in business in 2020 should have a sales team back in place to answer those out-of-the-blue calls from planners wanting to book a meeting in mere days.
Morrison echoes that advice, noting Spire has retained as many salespeople as it could over the past 12 months. It helped to chart the pulse of prospective clients as well as maintain relationships.
“We’ve been able to attract and make sure that we’re top of mind with people. So responding quickly and having a sales team in place to be able to respond quickly and identify opportunities within the market” has paid off for Spire.
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