Recently accelerating group booking trends, both for
short-term corporate and long-term association events, are encouraging Hyatt
Hotels executives, they said during the company's fourth-quarter earnings call on
Wednesday.
President and CEO Mark Hoplamazian said December was Hyatt's
best month for group booking activity since 2007. Group bookings made in 2013
at U.S. full-service hotels currently are up 4 percent compared with last year's
pace. The performance has negated concerns the company had last year about a
slowdown of group demand, he said. During the fourth quarter, group revenues
increased by 3.3 percent year over year—compared with a 6.9 percent increase in
transient room revenues—and group room nights were up only 0.4 percent.
"November truly was a terrible month," Hoplamazian
said. "Our sentiment about group was a glass half-empty as we were sitting
here in November, but while it's still not evenly disbursed, we would now say
it feels more like a glass half-full."
Hyatt's group bookings currently are showing a "bimodal
distribution," Hoplamazian said, meaning they largely are either small
corporate events with a very short booking window or large association events
in the distant future. Hyatt's group booking activity in the technology, retail
and manufacturing sectors are showing particular strength.
"Looking at group room revenues, the strength tends to
be in the smaller room blocks and smaller-sized meetings," Hoplamazian explained.
"The largest meetings are lagging. They're still positive in progression
but are lagging the progress and rate increases in the smaller segments."
Hoplamazian said availability issues—Hyatt's North America
full-service hotels in 2012 had an average occupancy of 72.9 percent—would begin
to drive group rates higher this year while also increasing the booking window
for small corporate events. "That will allow more proactive yield
management over time," he said.
Additionally, Hoplamazian reported that negotiations for
2013 corporate transient rates brought rate increases in the mid-to-high single-digit
percentage range, similar to what Starwood Hotels & Resorts Worldwide reported last week.