Group business is key to a full recovery of the hospitality industry, but when that will happen remains an open question, according to hospitality executives speaking at two sessions at this week's New York University International Hospitality Industry Investment Conference. They also weighed in on which changes to meeting protocols that Covid-19 has ushered in are temporary and which may be permanent.
"Large groups have got to come back," said Wyndham Hotels & Resorts president and CEO Geoff Ballotti. "This cannot be a permanent change. We are seeing [small meetings] with 100 or 200 attendees, but when will the meetings with thousands of attendees come back is the question. An important reason it has to come back is because of the impact on our team members. … The industry estimates that anywhere from one-third to one-half of the 4 million people who have been laid off rely on those large meetings and conventions, they rely on the banquet and catering. We as an industry need to figure out a way for these large groups to come back so this is not permanent."
Starting with the return of small groups with hybrid meetings is easier to manage and test more efficiently, said Choice Hotels president and CEO Patrick Pacious. "We're kidding ourselves though if we think it will come back in the same way [as before]," he said. "You have to look at all the investments businesses have made in virtual private networks, in Zoom, in Microsoft Teams. CFOs around the country will say, 'We made this investment, do we really need to send people out to these long meetings?' On the margins, you'll see when business travel comes back fully, some of it may not return. We as an industry need to be thinking about it and figuring out how to adapt the assets we have to attract the business traveler of the future, but also looking at the new normal."
Radisson CEO of the Americas Jim Alderman noted Amazon's announcement that the company since the beginning of the year had saved nearly $1 billion in travel expenses because of the pandemic, and it reported a third-quarter profit of $6.3 billion, up nearly 100 percent year over year. "[Executives] will start to question the $500 flight, the time to the airport, the travel time, the hotel at the other end," he said. "Is it worth a couple thousand dollars for a 45-minute meeting? Because we've become very good at this telecommuting. We've adapted. We have better cameras, better sound, and we are used to it."
Alderman added that Radisson has had some hybrid meetings at its hotels, and small in-person meetings in the few large meeting spaces it has, such as 25 people in a 10,000-sq.-ft. ballroom. "That's a good way to do it, but it's also quite a big waste of space," he said. "It's not the new normal, it's the current normal. But I do believe we will get back to these large group meetings. The pent-up demand is incredible right now."
Travelers need confidence to feel comfortable attending events again, and according to many industry executives, that won't happen until there is a widely available vaccine or more therapeutics.
"People won't travel or go to events unless there is confidence in the future," said BizBash chairman and founder David Adler. "We need to get a handle on on-site testing. The key is to get the costs lower and make it the kind of test you can touch on your tongue and get instant [results]. From what I hear, those things are starting to happen. Big trade show companies are relying on that. China is coming back. We're seeing vibrant business there, with lots of people attending big shows, and they don't have major issues at the moment."
Adler added that "every event will have a medical team now. Attendees will go through a scanner for temperature taking. There are new ways to make the experience less difficult."
Executives also are assessing changing consumer behaviors and using that to determine which new meeting elements will remain in the future.
"When you look at consumer trends, people want more flexibility, they want health and safety standards, keyless entry—all those things will become normal," said Expedia Business Services president Ariane Gorin. "The consumer trend of wanting more flexibility will continue."
She added that hotels are investing in audiovisual and technology equipment to allow not only individual guests to work at hotels but also additional meetings connectivity, giving the example of in-person groups in multiple cities connected in a single hybrid meeting.
They're also making those investments because "broadcasting is very different than in the past," said NYC & Company president and CEO Fred Dixon. "It's not just a simple webcam. It's sophisticated TV broadcasting. And what is interesting is seeing engagement going up. The nice takeaway is that we've reached larger audiences, and I hope that stays."