Group and meetings business has changed dramatically as a result of the COVID-19 pandemic, but this does not mean hotel sales teams have to enter a race to the bottom to fill up their properties; nor do they need to give away the shop to appease meeting planners’ concerns and clauses.

Leslie Lew, vice president of revenue and distribution at Practice Hospitality — a Dallas-based hotel management company — said people are actually willing to pay more for safe meetings in hotels.

“People get caught up in the need for discounting, to provide value-add propositions, but … for security, safety, control and flexibility, they recognize that if you give them a premium product, they will pay more for it,” he said on a panel titled "Group Contracting During COVID-19: Lessons Learned — And Long-Term Implications" at the 2021 Hotel Data Conference in Nashville.

Lew added revenue managers must focus on the profit drivers to their hotels, not the number of meeting attendees.

Christi Davis, vice president of sales at New York-based hotel brand company Loews Hotels & Co., said for the last year her strategy was to give meeting planners the confidence they needed to book events.

“That meant attrition and cancellation offers, but we are starting to normalize the booking process now,” she said.

Industrywide, hoteliers are holding out hope that corporate group demand will return post-Labor Day. But that's not a given, said Amy Forss, senior vice president of sales and customer experience for sales and catering software firm iVvy Inc.

Rising concerns about the COVID-19 Delta variant are already affecting group demand, Forss said. Business that had been booked or rebooked in the fourth quarter of 2021 is again being pushed farther out.

“It seems to keeps on plodding along as new information comes out,” she said.

Davis said optimism is good, but must be mixed with a dose of reality.

“Labor Day is like that magic day, along with the return to office, and we are increasingly getting more notices from clients that they are delaying, delaying to early 2021 or into 2022, so while we are optimistic that corporate travel will return … we are being realistic as to what that will look like,” she said.

Forss added that events are all shifting into the same time period.

The panelists said hotel teams need to continually analyze the mix of business they have to ensure hotels can reach their goals.

“Planners are not looking at discounts, rather at the success of their goals around security, safety and control,” Lew said.

Being flexible in contracts and cancellation is key, but meeting planners — especially if they are third-party planners with commissions at stake — do not wish to cancel. With social and small-group planners, flexibility will move parallel with simplicity, Lew said.

“We do not need to complicate the process. I do not need to teach ... about reading through a traditional contract. It is about rightsizing your efforts to the audience you are addressing,” Lew said.

Small and social groups are leading event bookings, with growth expected to be around 10%.

The corporate events market is expected to grow to $121 billion by 2024, despite company travel policies continuing to tighten and with trip volumes likely to stay depressed over the next two years.

In an STR survey, 63% of companies expected less travel for sales meetings, while 59% expected less attendance at conferences.

“Planners know they are in a buyers’ market," Lew said. "They are much savvier as to knowing what are reasonable clauses and what language to insert into a contract.”

Questions, expectations and potential clause changes are happening even in the request-for-proposal stage, Davis said. Meeting planners expect more from hoteliers, especially around COVID-19 safety protocols.

“Force majeure was always overlooked but is now the most discussed clause. Before this was maybe a paragraph, but I have now seen it spread to a page and a half,” she said.

Davis added that it is important for sales teams and other hoteliers to be empowered to know what flexibility is available to them.

“Some clients want attrition [flexibility] up to the very date of arrival, but no hotel can recover from that," she said. "If you can work on a sliding scale, within your other booking segmentation windows, hotels can recover, so it is about partnerships. We want that business within the four walls of our hotel, and no one wants to negotiate the contracts again.

“It is about working together, so the hotel does not take all of the risk."

Forss said it behooves a hotel team to have a library of contract clauses at their disposal.

“So that you can come back very quickly to the client and you are not dragging your heels and going back and forth with legal,” she said.

Davis added hoteliers need to be aware of an increase in subjective language in clauses.

“That’s the hardest thing for us to manage … and that's new for us all. And what is the origin of that subjective language? The planner? Procurement? Legal?”

“The language can be unfavorably vague to all parties,” Lew added.

Not all attrition is the same in a pandemic. Now, when attrition reaches 40%, alarm bells go off, but each case must be looked at carefully, Davis said.

With certain events that have a large international presence, attendance can evaporate very suddenly, Lew said.

“You can book multiple events on the same dates to offset attrition to reach the hotel’s business goals,” Lew said, adding that solutions include having "full-floor events, bubble events and the like,” although the goal is always to offer an event better than expected.

Some hotel segments are doing better than others.

“Boutique hotels are having success with clients who might have previously booked a larger hotel," Forss said. "There is the prospective of booking business you might not have considered before, because business is out there.”

Hybrid events, though generally considered successful during the pandemic, might not be the answer for either side, panelists said.

“Companies did see higher attendance when they went virtual, but did they get the engagement they wanted? That is open to debate, but remember hybrid events are expensive. You are running two meetings simultaneously,” Davis said.

Lew said hybrid events are likely here to stay, but investment is needed.

“Meeting rooms now look like production studios,” he said, adding that costs will come with that option due to the event support needed, communications across time zones and finding ways of conducting business throughout the actual event but also the hybrid one.

“Make [hybrid] a revenue stream, and report on it,” Forss added.

The decision to cancel an event might come from either side, but it is in no one’s interest to pull the plug, panelists said.

“A business decision is not a good reason for cancellation, but if it is outside their control, we will do the right thing and start discussions,” Davis said.

Lew said that for some social groups, an event usually is a life milestone centered around a birthday, wedding or anniversary, and if those cannot go on, it is a waste of time asking for the contract to be poured over.

“It is also not the right thing to do,” he said.

But in that case, future business should be the focus, Forss said.

“Ask what is the future with that client,” she said, adding that incentives can be offered to groups to move events farther out.

Lew added that more people are booking outside the room block, as there are more options.