Editor's note: This is the third in a four-part series about group business. Read part 2, “Group demand on track, but rate lags.”
INTERNATIONAL REPORT—To get a better sense of booking trends and future projections, HotelNewsNow.com queried the largest hotel companies in the world. What follows are their responses, listed by company in alphabetical order. (Unless otherwise indicated, responses were sent from company representatives.)
Accor
What is the current state of group business at your company compared to last year and 2007/2008 peaks?
“The trend is good, especially for September and October, which are important months. The market is recovering after 18 difficult months. The market has evolved with shorter reservation delays (32 days prior to arrival in 2010 versus 41 days two years ago for the meeting, incentive, convention and exhibition business) and reinforcement of choice criteria in terms of sustainable development and technology.”
Accor declined to disclose information on group projections and negotiation strategies.
Carlson Hotels
What is the current state of group business at your company compared to last year and 2007/2008 peaks?
“There is growing optimism about the return of the meetings, incentive and group market, encouraging small gains as well as a better reception we are receiving to our offers,” said Fredrik Korallus, executive VP of global revenue generation for Carlson Hotels.
“Overall:
- Demand continues to be short-term, with travel less far and remaining value conscious.
- Meetings are simpler and more ROI-focused than those held prior to the downturn.
- Booking pace (as opposed to lead volume) has been building steadily in the third quarter.
- We are still seeing bookings in the year for the year from all industries.
- Bookings for the first two quarters of 2011 are up from where they were a year ago, signaling growing confidence.
- Length of stay is down to a minimum with less pick up on shoulder dates.
- Hotels have enriched their (food and beverage) and daily delegate packages to focus on the value proposition.
- Online intermediaries are growing share and influence. This represents a significant change.
“Our message to market right now is the ‘value’ of our brand, which is perfect timing,” Korallus said. “Our new service concepts (e.g. Grab & Run, Free Internet, Business Class, etc.) and our 100% Guarantee, which is wrapped in ‘Yes I Can,’ catch the attention of the MICE buyer.”
What are your group business projections for year-end 2010 and 2011?
“For 2010 we see modest, yet encouraging growth. For 2011 we remain cautiously optimistic.”
What is your rate strategy heading into corporate negotiation season?
“Group rates are being quoted in accordance with forecasted market demand. We see positive development in all rates including groups and meetings.”
Hilton Worldwide
During a recent interview, Chris Nassetta, Hilton’s president and CEO, said corporate travelers have come back “more strongly than we would have guessed. That’s a result of people having more confidence than they once had in the economy, from a corporate customer point of view.”
“We’re going to be pushing our corporate customers very hard to see rate improvements,” he said. “It is still too early to say exactly where those end up, but I think others in the industry have said somewhere in the order of 4% to 7% increases. I think that’s generally in line with our thinking as well.”
InterContinental Hotels Group
What is the current state of group business at your company compared to last year and 2007/2008 peaks?
“The business traveler has returned in greater numbers, with a strong improvement in weekday demand between Q1 and Q2. Rates are benefiting from the improvement in business mix towards the business traveler, but also some return to pricing power in some markets.”
What is your rate strategy heading into corporate negotiation season?
“It’s still early in the process. However, we would expect rate growth in 2011.”
IHG does not give forward-looking projections.
Interstate Hotels & Resorts
What is the current state of group business at your company compared to last year and 2007/2008 peaks?
“There is no one answer for a group booking outlook. Some markets are improving, some remain down. Pricing remains difficult, but we believe we are past the worst of it.”
What are your group business projections for year-end 2010 and 2011?
“We have seen an increase in requests for group bookings over 2009. Considerable competitive pressure on group rates and related revenues for catering and other activities continues to be the major issue.”
What is your rate strategy heading into corporate negotiation season?
“In some markets where corporate transient bookings have increased substantially, we are attempting to sell groups at higher rates. However, competitive bids indicate that many of our competitors are not attempting to raise rates.”
Starwood Hotels and Resorts Worldwide
What is the current state of group business at your company compared to last year and 2007/2008 peaks?
“Year-to-date new bookings are up in excess of 25% driven by the return of corporate meetings. In addition to new bookings, we have seen significantly less cancellations and room block attrition. This is having a tremendous impact on net consumed group rooms. A result of both of these (trends) is the reversal of our 2010 group pace deficit. What was a double-digit gap to prior year as of 1 January is now a mid, single-digit positive. Bookings for the year are driving this in part because of the unleashed, pent-up demand.”
What are your group business projections for year-end 2010 and 2011?
“We are seeing strength in bookings for 2011—this is impacting our group pace in the same manner as 2010.”
What is your rate strategy heading into corporate negotiation season?
“As a result of the increased demand, we are seeing a return of group pricing power both for 2010 and future bookings. The concessions offered for groups is diminishing as well as causing a return to date flexibility and sourcing multiple meetings simultaneously for added value.”
Vantage Hospitality
What is the current state of group business at your company compared to last year and 2007/2008 peaks?
“The current state of group business for our brands is very optimistic and healthy. We have found that group business for both brands has increased at a steady state when compared to the same periods in 2009. This is a result of an increase in booking pace, more people and companies booking group business and a lengthier booking window. The booking window has moved from the one-to-three month period to six-to-12 months out. We have also found that some corporations and associations are booking into 2013, which in 2009 was unseen. The average length of stay, however, has not increased, but F&B package revenue has increased.”
What are your group business projections for year-end 2010 and 2011?
“Based on current group business on the books presently, for the remainder of 2010 and 2011, our group projections are trending up 57%.”
What is your rate strategy heading into corporate negotiation season?
“Vantage Hospitality operates very differently than that of most hotel companies. While we advise our properties on group rate increases and negotiations, we do not mandate or control the rates for our properties. Therefore, we are unable to provide an answer to this question.”
Wyndham Hotels Group
What is the current state of group business at your company compared to last year and 2007/2008 peaks?
“In comparison to previous years, we’re seeing the continued shortening of booking windows along with steady month-over-month increases in group request-for-proposal inquiries. On the whole, group business is up for the year. We attribute this in part to the success of a new program we launched earlier this year which allows our inside sales team to confirm group blocks directly with customers over the phone.”
What are your group business projections for year-end 2010 and 2011?
“Group business is up for 2010. We expect this trend to continue through the end of the year and into 2011.
What is your rate strategy heading into corporate negotiation season?
“Rate negotiations are based on the demand in the individual markets where our hotels are based and vary from location to location. This is true for both group rates and corporate negotiated rates. We plan to continue to work with clients on a case-by-case basis and stress the savings found in the value-added offerings found in the majority of Wyndham Hotel Group portfolio: free high-speed Internet access and complimentary breakfast. We also continue to work to ensure that even more of our properties are participating in the transient request-for-proposal process, something we’ve had great success with in the past year.”
Editor's note: Tomorrow’s installment in the series offers tips for revenue managers as they push group rates.
