SAN FRANCISCO — Hotel business from small meetings and groups is largely being underestimated, particularly in the U.S. and Europe, according to Accor executives speaking at the company's Global Meeting Exchange conference.
The return to pre-pandemic performance in this segment has not been swift, but business and event planners now need to be proactive to get the space they require in some markets.
“It is not equal everywhere, but we have confidence in that we have seen a rise in corporate travel,” said Markus Keller, Accor’s chief sales and distribution officer and who also is a board member at Hospitality Sales & Marketing Association International Europe.
Meenaz Diamond, the French hotel firm’s senior vice president of sales worldwide, said hotels must perform beyond expectations to capture this emerging business.
“Attendees do not always now need to go to a meeting, and they can be choosy. The value proposition has to be correct, and there also has to be a leisure component” in any event’s itinerary, she said.
Diamond added she is seeing a trickle of longer meetings and events in Europe, which she said is encouraging.
Emlyn Brown, Accor’s global vice president of well-being, said health and experience are driving meetings, events and business travel. He added the industry must remember that travel is full of wonder.
“People have their eyes open. Travel has to become special again. The hotels that understand that will do well,” he said.
Accor’s recent structural division of its portfolio is helping clarify this messaging in its North American market, where it currently has approximately 120 hotels.
Its “power brands,” including Swissôtel and Novotel, are being led by CEOs heading up traditional, geographic-based markets such as Americas, Europe and North Africa and Middle East, Asia and Pacific. Its luxury and lifestyle brands are now divided into distinct groups such as Fairmont; Raffles/Orient-Express; Ennismore, and Sofitel/MGallery/soft brand Emblems.
Greater China, due to its current closure, is standing on its own as a single market.
That move is intended to better explain Accor’s offerings to investors and group, event and incentive buyers, said Patrick Mendes, Accor’s group chief commercial officer. He added 61% of the firm’s portfolio is now outside of Europe, whereas in 2013 that number was 26%; and 33% of its luxury portfolio is now outside of Europe, whereas in 2013 that number was 11%.
He said Accor now is the No. 2 hotel firm in North America in the luxury market.
Mendes said this “deep transformation” will officially be in place in October.
Business Return
Heather McCrory, Accor's CEO for North and Central America, said she remains cautious about the uptick in business travel.
“Everything in 2020 and 2021 has been moved to 2022,” she said, adding it was encouraging to see some event business in 2022 having to be booked farther out in order to get the dates the organizer wanted.
Mendes said caution is required as recovery is being driven by average daily rate.
Jan Freitag, national director for hospitality market analytics at CoStar, said the U.S. hotel industry is now selling exactly the same number of rooms it did in 2019. U.S. group demand also is back to normal in the luxury segment, he said.
“ADR will continue to go up, and booking windows will continue to elongate,” Freitag added.
Digital nomads and bleisure travelers are now competing for Thursday night bookings, which typically have been dominated by groups.
Jeff Doane, chief commercial officer at Accor, said group and events business in North America has rebounded to 67% of 2019 levels. He said the figure is better than that in real terms, or adjusted for inflation.
“That improvement has come about really in the last 75% of this year,” he said, adding it includes new business as well as postponed business.
Editor’s note: Accor paid for all travel expenses to San Francisco, including airfare, amenities and hotel accommodation. Complete editorial control was at the discretion of the Hotel News Now editorial team; Accor had no influence over the coverage provided.