While conventional wisdom says the rebound for the hotel industry will be driven by leisure transient demand, Hyatt Hotels Corp. President and CEO Mark Hoplamazian said his company is already seeing “interesting and very positive data in group activity.”

A quicker-than-projected return of group demand for hotels would be a boon for a company such as Hyatt, which is disproportionately reliant on both group business and the type of business transient traveler that have been almost completely sidelined by the ongoing COVID-19 pandemic, he said during the company’s fourth-quarter and full-year 2020 earnings call.

Throughout 2020, Hyatt’s managed hotels in the Americas earned roughly $340 million in revenue from group business, and Hoplamazian said 87% of that came in the first quarter of the year before the effects of the pandemic hit. But it’s been slowly and steadily clawing its way back through 2020.

“It sequentially improved over the course of the year,” he said, noting half of the $44 million in group revenue from the three previous quarters was realized in the fourth quarter of 2020.

Hoplamazian said his company booked $170 million in new group business — not inclusive of rebookings for canceled or postponed events — in January alone.

“That represents a 20% acceleration over [the third quarter] in pure new group bookings,” he said. “We are, for the first time since COVID-19 began, seeing association and corporate activity pick up for 2022 and beyond. And we have early signs that we will actually host corporate meetings as early as the second quarter of 2021.”

He said rebookings are also substantial.

“We’ve rebooked approximately $300 million of business, or 28% of our canceled group revenue from March 2020 through December 2020,” Hoplamazian said, noting that lead generation has also risen to a level not seen since early 2020.

He said his company’s earlier projections of a more substantial return of corporate and group business could be realized in the second half of 2021, dependent on successful coronavirus mitigation efforts and more widespread vaccinations.

“As we head into 2021, our expectation is that we will have sequential improvement" in the first and second quarters from the realized group revenues in the fourth quarter of 2020, "with much more significant increases" in the third and fourth quarters of 2021, he said.

All of this adds up to, in Hoplamazian’s estimation, the possibility of group business coming back earlier than many industry observers might expect.

“I have to tell you that we had previously been saying that the sequence would be leisure transient followed by business transient followed by group, and I think that the potential upside surprise in that progression is that we might see group come back in a more purposeful way and in a more significant way,” he said, adding demand has skewed more to resort properties than city centers.

While all of this is positive news, Hoplamazian said leisure transient still makes up the lion’s share of demand for his company, like all others in the hotel industry right now.

“I spent a lot of time on group because it caught my attention in a big way, as you can tell from my tone, but it remains true that the vast majority of our business" in the fourth quarter, and as the company heads into the first quarter of 2021, "is still transient,” he said. “It was close to 85% of our total revenue base in [the fourth quarter]. Leisure is still leading the way. Seventy percent of that transient is leisure and 30% is business."

Hoplamazian said the earlier indicators for the potential group demand rebound in the hotel industry come from China, which was ahead of the curve both in the initial spread of COVID-19 and the containment of the disease. He said the group business his company saw in 2020 was “what you would have seen pre-COVID.”

“New product launches by car companies, a lot of new line introductions by luxury brands,” he said. “And these were very, very extensively programmed. I mean, I'm talking about food and beverage and entertainment and AV programming. So we're seeing that type of business come back with some significance.”

Hoplamazian described the demand seen in China as the “canary in the coal mine” for an eventual global return to travel.

He said his company has prepared for this rebound, including pioneering new approaches to hybrid events.

“While many people in the industry have launched so-called hybrid meetings solutions, we went back to the drawing board and started from scratch and recognized that cobbling together pre-existing [audiovisual] capabilities and having a digital leg to a meeting isn’t really satisfying the core needs of most of our biggest customers,” he said.

Hoplamazian said he has a “live design effort” underway for a hybrid meeting solution that will “span 11 different hotels and 11 different markets” in the U.S. that will allow for up to 1,000 attendees to gather at a single property while physically distanced and connect with other attendees at other hotels or even at home.

“There is an essential human-connection component of how companies are thinking about getting back together and what the raison d'etre, what the reasoning is that they want to get back together. And we're figuring out ways to actually make that come to life, both on-property and in relation to the digital participants,” he said, noting the company is “codesigning” the hybrid meeting experience “with several of [their] largest customers.”

The company’s initial optimism about hybrid events had to be tempered somewhat by their partners because they come with more costs than originally anticipated, he said.

“Between the extra AV staffs they’ve had to put on plus what I would describe as the help-desk issues, which I’m sure everyone on this call has experienced in their own lives, it’s actually an additional increment of costs for them to hold these hybrid meetings,” he said.

The highlight in terms of performance for Hyatt in 2020 was net rooms growth, which was 5.2% for the full year.

Hoplamazian said roughly 20% of net rooms growth came from conversions in 2020, and he expects that to be in a similar range in 2020.

One possible headwind for Hyatt in terms of potential rooms growth is ongoing negotiations between Hyatt and Service Properties Trust, a real estate investment trust that over the past year has severed relationships with several hotel branding companies and converted them to their affiliated Sonesta brands. Hoplamazian said he remains hopeful the 22 hotels owned by Service Properties will remain flagged with Hyatt brands.

“We were in discussions with them and are hopeful that we will find a path forward with them,” he said.

Hyatt reported a net loss for the year of $703 million with adjusted earnings before interest, taxes, deprecation and amortization of negative $177 million, according to the earnings release. Revenue per available room was down 65.4% for the full year compared to 2019 and was down 68.9% year over year for the fourth quarter.

As of press time, Hyatt was trading at $78.56 a share, up 5.8% year to date. The NYSE Composite Index was up 5.3% for the same period.