NASHVILLE, Tennessee — Business travel demand continues to slowly but steadily inch back for hotels, but patterns have changed and hoteliers are now employing different strategies to maximize that business.
During the "Today's Business Traveler" session at the 2023 Hotel Data Conference, Erica Lipscomb, senior vice president of revenue strategy for Crescent Hotels & Resorts, said most companies are still waiting for the business travel floodgates to open.
"We've all budgeted and forecast every [fourth quarter] that we're going to have this amazing return, but it just inches along," she said. "Right now from an entire portfolio standpoint, we are still lagging 2019."
Chris Cheney, vice president of hotel performance and analytics for Stonebridge Companies, said the recovery has come in fits and starts.
"In the [first quarter of 2023], it felt really good, and we started to inch back to full recovery, then we plateaued" in the second quarter, he said.
Ultimately, the business travel recovery varies by market and hotel, Cheney said. Many markets driven by international business travel demand are still lagging significantly.
Lipscomb said the slow business rebound has advantages beyond the stronger leisure travel environment. Those include changes in sales culture to be both more thoughtful and more aggressive in getting the right types of business transient and negotiated demand.
"COVID made our sales managers really scrappy," she said. "They had to go after business they've never targeted before or just business that came into their market. And if you didn't want to take it and it wasn't the right fit, you could turn it away."
Marc Sternagel, area general manager for the Grand Hyatt Nashville, said that this summer has been relatively weaker than recent years due to slowing leisure travel and the lag in business demand, but the formula of weekday group demand and weekend leisure is still working in markets such as Nashville.
"We're catching up on that three-year span where nobody wanted to go overseas, and that shows a little bit of an impact on the domestic market," he said. "It's definitely a little softer than we would like it to be."
That formula has changed since before the COVID-19 pandemic, as day-of-week trends continue to shift, particularly around Thursday and Sundays.
Allie Bennett, senior account manager of hospitality cloud sales at Cvent, pointed to the jump in blended leisure and business travel — dubbed bleisure — as a reason for that shift.
"Going against that normal pattern for [business travel] of Sunday through Thursday, they wanted to stay Thursday night and Friday night for leisure," she said.
Because of that, it's not always easy or straightforward for hoteliers to parse out whether guests are business or leisure travelers or both, and that can make pricing decisions more complicated.
Lipscomb said the best way to tackle that issue can be changing the thinking around days of week, including regarding Thursday as a weekend day instead of a shoulder day, and deploying good business intelligence tools.
"Make sure you're including those Thursdays and Sundays [and] manipulating the system so that you're now adding them into weekend demand," she said. "That's how you get increased pricing."