Is the Meetings Booking Pace Off for 2021?

One of the buzzier bits shared at the NYU International Hospitality Industry Investment Conference this month was that the booking pace for group business for 2021 is down. During the Knowing the Customer and the Supremacy of Data session, all four panelists expressed concern about future group business, particularly from 2021 onward. "We're hearing from our destination [management] clients that their 2019 and 2020 is looking good," said STR SVP of global business development and marketing Vail Ross. "It's 2021 and 2023 that there are really struggles of getting group business."

In April, Cvent forecast that group business would be down 1 percent to 2 percent for the next eight quarters. "But 2021 looks the worst, to echo Vail's points," said Cvent senior director of analytics Jeffrey Emenecker, who confirmed that the downward trend looks as though it will get progressively more pronounced into the next 24 months. "Hotel owners are really anxious to get as much group business on the books for 2021 now as they can. [They] need to go deep on the data and do that now to try to find those groups because that is what all the big players are doing."

While two years out might seem like a long time for booking a meeting, it's usual for large events like conventions that have fewer destination and venue options.

It's unclear what might be behind the slowdown. "Is it because of uncertainty now—people are not making decisions for the future—or is it just a fluke?" Ross wondered. Either way, the effect on hotels will reach beyond group business, she pointed out. "When you have a good group foundation of demand and of rate, it does allow a level of comfort to really revenue manage the transient consumer. That's why it's a little bit of a concern [for hotels] when we look further out from 2020."

Trade issues and tariffs between the U.S., China and other countries may be influencing group booking. "When I was in Montreal [recently, I heard that] the impact of tariffs in Canada, if they go through, would cost 150,000 jobs" there, said TravelClick senior industry analyst John Hach. "There's a ripple effect. What does it do to groups? It crushes them. During the Great Recession in 2008, one of the first things we saw was large groups just evaporate. When groups start to go, you get more pressure on transient." As for bleisure, "if group is gone in the city, the opportunity to have a joint stay, a couple extra personal nights—that goes, too," he added.

And then next year is an election year, which always makes people hesitate to book future business.

Meanwhile, companies may be developing their own lodging. In January, for example, KPMG will open its own innovation and training center in Orlando with 800 guest rooms, 90 learning and innovation spaces and a 1,000-seat assembly hall, diverting from the market a lot of recurring group bookings.

Is a Slowdown a Sure Thing?

Still, other meetings managers and planners BTN questioned have not seen any slowdown in their bookings. "This statement actually surprises me very much, as the conversation within the industry has been consistent growth in meeting bookings," said Cardinal Health global manager of meetings and events Shannon Sprau. "The demand has not been declining or even flat for quite some time." Her company, however, rarely books meetings more than 12 months in advance.

HB Hospitality posed this question to The Hive, its online community of 4,250 U.S. meeting and event planners and 750 hoteliers, and the responses supported Sprau's statement. "We are definitely not delaying. … We are planning 2021 already," said Gen Re manager of travel, meetings and events Sonia Maldonado. PLAC senior director of operations Kimberly Condon replied, "My group tends to plan 12 to 18 months out, but for the first time, we're actually looking out farther, through the end of 2021."

So, there might not be a slowdown after all. Increased supply over the past decade also may have shortened the booking window for some meetings. So 2021 might actually turn out fine despite the current data trends, Cvent's Emenecker said.

If a delay is what's occurring, it even could turn out to be an opportunity for companies to leverage better deals, at least in certain markets with certain types of meetings, he added. "There is a lot of competition out there, and with projected slowdowns like these, it could make it more of a buyer's market. It will be interesting to see how hotels adjust their pricing and offerings to attract their share of the group business."