When COVID hit, hotels that remained open, particularly resorts and extended-stay hotels, had a modicum of success mainly from the leisure segment feeding them. Evaporated, however, was the group business that hotels traditionally thrive on. These guests are an ancillary revenue goldmine for hotels: they spend money on food, on beverage, on spa, on golf, on parking—on everything not bolted or serviced within the room.
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That attractive cohort all but disappeared during the pandemic. It’s back now and hoteliers, gathered at an “Industry Leaders” panel during the NYU International Hospitality Industry Investment Conference, couldn’t be more elated.
“Group has returned,” said Peter Strebel, chairman of Omni Hotels & Resorts, whose portfolio of more than 50 hotels is basically split between resorts and convention properties. “Our numbers and leads are far better than 2019 and next year’s pace is strong—way above where we were in 2019.”
The group makeup has skewed toward SMEs, or small to midsize enterprises, with groups from 10 to up 100. Strebel said Omni hotels are seeing an increase in short-term meetings, maybe for training or regular meeting purposes. “Spending,” he said, outside rooms is way up, in wedding, catering, golf—people spending more on experiences.”
Strebel said that Washington, D.C., where it has one hotel, the Omni Shoreham, was the last group market to recover and “now is on fire.” Associations, meanwhile, are still slower to come back.
Sloan Dean, CEO of Remington Hospitality, a third-party manager, is seeing the same trends as Omni’s Strebel outlined. Group demand, he said, is exceeding 2019 levels — up 33% year-over-year for Remington’s hotels — and bolstered by banquet and catering, which is up 25%. “Before COVID,” he said, “we were selling mostly just rooms. Now, groups are arranging dinners on site as opposed to going out. So bar and catering is up and that helps profitability.”
Added John Murray, president and CEO of Sonesta International Hotels, “People don’t come to office as much but still need to get together.” He said Sonesta’s urban properties are up, driven by leisure and a gradual recovery of corporate business.
