NASHVILLE, Tennessee — There are signs that group demand is close to pre-pandemic levels at U.S. hotels, boosting the hospitality industry in the middle of the week.
Vail Ross, managing director of 2Synergize, said group demand in June 2024 in the U.S. has almost caught up with its June 2019 level, which picked up steam at the beginning of 2024.
“Booking and events and room nights have a correlation, and hoteliers are refamiliarizing themselves with rooms demand trends,” she said during a Hotel Data Conference session on hotel group demand trends and booking pace.
Chris Klauda, senior director of product analytics and insights at STR, said group room nights are following actualized patterns, which bodes well for the future. From January to June 2024, each month saw hotel group demand eclipse the same month in the first half of 2023.
One concern is that groups continue to book hotel stays with little notice, keeping the booking window very short, Ross said.
Lead times, bookings and room nights all are up on 2019 levels, she said. Weekday group demand is closest to its 2019 levels than demand levels compared to shoulder days — Thursday and Sunday — and weekend days of Friday and Saturday.
“Weekdays are driving groups. Transient demand has recovered, but discretionary spend is falling, mostly on weekends, followed by shoulder," Ross said. “There is strong group, and average daily rate is above the rate of inflation, even though ADR gaps remain between transient and group, group being lower.”
Aggregated lead volume in the first six months of the year recovered from 2019 but is down from 2023, Ross said. In the first quarter of 2024, lead volume increased 18.2% versus 2019 but declined 1.2% versus 2023. In the second quarter, it had risen 13.9% against 2019 but was still 2.4% behind the second quarter of 2023.
“Meeting planners are throwing things out there and seeing what sticks, especially as there was so much leisure-transient demand paying a higher ADR,” Ross said.
She added aggregated lead room nights started 2024 strong, up 11.7%. Through June, meeting attendance was up 16.3% compared with the same month in 2019.
At 12% of share, health, medical and pharmaceutical events lead for both convention centers and hotels, followed by technology, science and engineering and the meetings, convention and tourism industry, which each had a 7% share, Klauda said.
Rolling six-month group demand change compared with 2019 was still down 4.7%, she added.
Group room bookings are down by approximately 5%, Ross said.
“So, there is a correlation,” she said.
Market bifurcation
U.S. hotels are finding and converting bookings from meeting, event and convention leads. The hope is that many of them will become sustainable, Klauda said.
“The small meetings market has recovered, and the outlook is very positive,” Klauda said. “Versus 2019, small meetings are up 13.2%. The medium meetings market is tied for least recovered, but the outlook is mostly positive.”
When compared to 2019, medium meetings booked at hotels were down 4.8%, but bookings were up 10.9%, while the large meetings market had not quite recovered but had the most booked nights, with events down 3.6% from 2019 and bookings down 3.5%.
The very large meetings market has the furthest to go to recover versus 2019. That is understandable, Ross said, as 83% of the top 250 events rotate through only 21 markets in the U.S.
There are 14 events that have 10,000 or more peak nights, and the top six U.S. cities for conventions in 2023 were Orlando, Florida; Chicago; New Orleans; San Diego; Boston; and Las Vegas.
Ross said most meeting planners expect the number of event attendees this year will be higher than last year.
“Of all bookings to date in 2024, 73% have confirmed as definite, which is a good rate,” Ross said. “We’re seeing bookings two to three years out normalizing, which makes hotel [food and beverage], for example, easier to plan.”