Brian Berry, senior vice president of sales and data analytics for Cvent’s Hospitality Cloud, gave us insight into changes in group business and — most importantly — how to use that information to succeed. You’d think that attracting group business would be easy, given that the economy is doing well and we’re at the top of the lodging cycle, but it turns out that isn’t the case. Booking group business is more complicated than ever, despite a good economy, better technology, and more resources.
First, Some Data About the Value of the Meetings and Events Market
- $565 Billion is the estimated worth of the M&E market.
- 30% of Hotel Revenue is generated from M&E.
- $12 Million is the average annual hotel revenue from M&E.
- $14 Million is the average amount large companies spend per year on offsite hotels and venues.
Now, Some Information About Group Business
- Group demand growth has turned negative.
- Group occupancy is decreasing year over year.
- ADR growth has been less than stellar.
Why Is Group Business Doing Worse Than Transient?
Transient has been good for a few reasons. It’s a simple equation. Baby boomers are retiring and traveling more, millennials are spending more money on travel than any previous generation, there’s higher international demand, and there’s low unemployment. All of that adds up to increased consumer confidence, which drives spending. In contrast, group demand is really business travel. Business confidence has been lower than consumer confidence, which means group business hasn’t seen as much success as transient.
How Does Group Business Look Going Forward?
- We may be in for more of the same lackluster group performance.
- The average size of groups is getting smaller.
- The average peak size is down.
- The average booking window is shrinking.
Small Is the New Big
You want to book big groups, but with slowing growth, it isn’t easy. Surprisingly, when you look at events of fewer than 50 rooms, the growth has been phenomenal. That means that you’ll need to be more adept at fitting multiple events in simultaneously. It means more transactions, more RFPs, and exceptional pattern management tools. Basically, technology is going play a large role in making this all work.
What You Need to Do to Be Successful
- Elevate your marketing. This means viewing ROI differently.
- Focus your sales resources differently. This improves the processes to win more.
- Turn data into insights.