In 2020, leisure demand kept U.S. hotels operating through the peak summer months, but in 2021, hoteliers hope group business will return with some consistency.

Read on for takeaways on group recovery from hotel brand and ownership company executives in comments provided during the fourth quarter earnings season.

• Read Hotel News Now's complete fourth quarter and full-year 2020 earnings coverage.

“We expect a more pronounced recovery in the back half of the year driven by increased leisure demand and meet meaningful rebounds, and corporate transient and group business. … We saw a meaningful step-up in new group demand in January, with our back half [of 2021] group position showing significant sequential improvement versus the first half of the year.

"Group is going to take longer [than business transient] but the trend lines are good. If you look at our lead volume — fourth quarter versus January 2021 — January was up 35%. … The second half of 2021 versus the second half of 2019 is down by 32%. So it’s still off, but by a lot lesser margin, and that’s a result of people saying, ‘I have to get out.’ Conventions are starting to book again because [companies] are going to go out of business if they don’t get [to] booking again.”

“At the end of the fourth quarter of 2020, our group pace for 2021 was down negative 57%. But the second half of the year was down just 25% to 30%. We're also on the group front seeing some positive trends as it relates to groups canceled. They've really slowed for the second half of 2021, and they are at normal levels for 2022, plus we're also seeing some great trends on lead volume. While it's certainly behind 2019, it's improving. As a matter of fact, over the last 45 days, lead volume has increased 20 to 30 percentage points. So, a significant improvement from what we experienced in the fourth quarter of 2020.

“The other thing I'll note on group: We're starting to see a pickup in what I'd call more normal types of groups. So as an example, we're starting to see some incentive meetings book in the fourth quarter of this year.

“January was not only a strong booking month, which was terrific, actually the best month we've had in a couple years, but the rate was up for futures 11%. And you should know most of those groups that were booked into the future years, those higher rates were in-house group versus citywides. We haven't quite seen citywide bookings come back yet, so I think that the story on the group front just underscores the point that there will be a return to meetings and group business, and it may be slower than we would like.”

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"I'm really pleased, if not surprised, to report that we're seeing some interesting and very positive data in group activity. ... Now, from the beginning of the fourth quarter through January, we booked $170 million roughly in pure new group business for all future months. And that excluded any rebooking activity. That represents a 20% acceleration over [the third quarter] in pure new group bookings.

"We for the first time since COVID-19 began seeing association and corporate activity pick up for 2022 and beyond. We have early signs that we will actually host corporate meetings as early as the second quarter of 2021. Now in addition to these new bookings, we've also rebooked approximately $300 million of business or about 28% of our canceled group revenue from March of 2020 through December of 2020. As we head into 2021, our expectation is that we will have sequential improvement in [the first quarter and second quarter] from the realized group revenues in [the fourth quarter] of 2020, with much more significant increases in [the third quarter and fourth quarter of 2021], assuming that we stay on path with respect to vaccinations and the increased use of rapid COVID tests over the course of the year.

"In January, we saw cancellations down 25% from the December levels. As [first quarter] group business is mostly comprised of sports events that are operating in a bubble and also some sizable U.S. government business including some essential healthcare workers, armed services business and National Guard business concentrated in several hotel takeovers. January through the first week of February saw lead generation rise to levels we have not seen since early 2020, with January's lead volumes at a 50% improvement over December. And of that increased activity, 60% relates to 2021 arrivals, with the majority of that hitting in the second half of 2021. This activity is concentrated in our resorts, and also, importantly, in our primary convention hotels."

“We saw a marked increase in group booking activity for our Marriott-managed hotels in January. Our hotels booked approximately 101,000 group room nights for 2021, a 32% increase over January 2019, with January typically being a slow month for group booking activity. In addition, our hotels had an impressive lead-to-booking conversion rate of 22% compared to approximately 16% in 2019.

"While there are several types of groups being booked, we are pleased to see bookings for incentive meetings, which have returned after a hiatus in 2020. We also saw improved future group booking activity in January, with approximately 73,000 future group room nights booked for beyond 2021, representing a 42% increase to January of 2019.

"Through this January, we had approximately 1.6 million definite room nights on the books for full-year 2021. Approximately 1 million of these occurred in the second half of the year, and are fairly evenly split between the third and fourth quarters, where bookings are largely continuing to hold. Should the groups materialize, our second-half 2021 group business will have recovered to almost 50% of second-half 2019 levels, based on definite group room nights on the books.

"While group pace is less meaningful today as most meeting planners remain on the sidelines, we are encouraged by our total group revenue pace for the latter half of 2021. Pace in the second half of 2021 is down only about 25% compared to the same time last year versus the first half being 84% lower than last year. This could improve with additional in-the-year for-the-year group booking activity, assuming state and local restrictions are relaxed and attendees become more comfortable with travel.”

"With corporate demand, we think we've hit the trough. And we think that we're now seeing finally some trajectory of growth. It's not a lot, frankly, but as we were actually going through with some of our property managers the other day and looking at the mix of the business, you are seeing, again, small trends. I don't know if it's enough, frankly, to quantify that much other than we think we've hit the bottom and it's moving up. In terms of in the second half of the year, group pace for us is materially better than it is the first two quarters."

“We're very encouraged about how well group is shaping up for 2022 at this point. So yes, we've begun to look at our group pace again. While 2022 pace is significantly behind the same time last year for 2021 — in fact, it's down 21% in room nights — activity has begun to pick up as meeting planners become more confident there's more clarity and optimism on success against the virus and a lot of business from 2020 and 2021 is being rebooked into 2022.

“Equally encouraging is that rate is holding as well. Our group rate for 2022 is currently ahead by 1.4% versus pre-pandemic same time last year for 2021. And for 2022, it's ahead by over 5% versus same time 2018 for 2019, which was our last normal pre-pandemic year.

“When we look at 2021, we're definitely much more cautious about group and trying to forecast when businesses will move forward and meet in-person again. Our group pace for the second half of 2021 is down around 32%, with [average daily rate] slightly positive, which, of course, is very encouraging. Group rates have generally held up or been rolled forward from previous bookings, and some have even increased if they've been moved from a seasonally lower-rated time of year to a seasonally stronger time of year.”

"One of the things that give us a good bit of optimism actually for the back half in terms of group is what we're seeing on the rate side. And in fact, sitting here today, our group rate on the books for the back half of 2021 is actually higher than it was for 2019. So I think in light of what we've been through, we view that as a pretty remarkable statistic.

"And what I can tell you is that as new bookings are being made, we're not seeing the ultra-competitive price environment that you might have thought we would see given that groups have a lot of options and a lot of hotels with availability for them. And I think part of that is that the groups that are booking right now are a lot of rebookings. So, its groups that maybe didn't move right away, but now know they want it. They canceled their program; now they know they want to have it.

"So, they've chosen their hotel and they want to rebook at that hotel. And we're also seeing a lot of groups that I think are getting a lot of confidence around just where they want to be. As opposed to a market like Orlando, where we might have seen historically a group come and look at four or five or a half dozen hotels, we're seeing them look at a couple of hotels and I think that's certainly changed the rate profile.

"From an absolute standpoint in terms of where — what would be nicer on the books, they're down and they're down fairly significantly. We're looking at group pace to what we had the same time last year for 2020. The back half down around the 40% level, but given our particular portfolio, we do not — most of the large majority of the group [business] that's in our portfolio is corporate-driven, it's not citywide-driven, and it's not necessarily large association-driven.

"It's exactly the kind of business that we would expect to book short term and what we're seeing in terms of how that's grown over time has been significant. ... From the end of [the third quarter] to the end of [the fourth quarter], we saw back-half 2021 bookings increased by 35%. We think that's significant. And we've certainly seen that trend continue in January and February, and hope to report an even stronger profile as it relates to that metric by the end of [the first quarter]."

"We are encouraged by recent booking activities. Group booking trends during the last week of January were the highest since last March, with most strength coming from smaller group meetings of 11 to 50 people. … Business transient demand increases are likely to be more gradual, not making a material contribution until 2022. We also believe in some of the new normals as we emerge from the pandemic. There will be a greater focus on safety in the travel industry. It's likely that [the] video conferencing technologies people and businesses have utilized during the pandemic will have a longer lasting negative impact on business travel."

"There remains limited visibility with many companies more focused on when to bring workers back to the office full time and less focused on booking travel at this point. The group side is expected to be similarly impacted by the lack of corporate travel in the near term. However, we are encouraged by the lead volume and group booking activity seen since November, shortly after news of the vaccines were announced, with leads for 2021 doubling and definite bookings for the year increasing five-fold in January. In addition, looking at the 2022 group pace, it is largely holding firm at this point with rates up 3% over the 2019 levels."

In the fourth quarter "we saw the continuation of a positive uptick in both business transient and group demand. Our fourth quarter business transient and group rooms revenue increased 12% and 4%, respectively, from the third quarter evidencing that both these segments are beginning to see small levels of improvement. Business-transient demand continues to be primarily generated from industries such as healthcare, insurance and government. And our group demand continued to benefit from our hotels being attractive to small and social groups such as weddings and sports teams.”

Editor’s note: Chris Nassetta serves on CoStar Group’s board of directors.