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Group Business Comeback in the Cards

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By David M. Brudney, ISHC, March 2010

I checked the group room night “vital signs” on two of the large, high-end resorts here in Southern California to verify whether 2009 was as bad as predicted.  Both resorts offer similar products - - great meeting and banquet space, golf, spa and service - - and historically have been 65 percent group houses.

No surprise here - - total group room nights dropped by as much as 50 percent last year and the business mix has now flip-flopped to 65 percent leisure and 35 percent group.  Unlike just a few years back, both resorts confirmed that leisure is now a 100 percent drive market.

I suspect that had I expanded my research I would have found very similar results at most high-end, group-oriented resorts throughout the U.S. 

My sense is that group business - - in particular, the highly coveted corporate kind - - will make a comeback in 2010, but increase in demand will be moderate at best.  It may very well take two to three years more before we see a return to those wonderful big numbers.

Apparently, several industry leaders are more optimistic than me.   There was a great deal of positiveness heard during the annual PCMA conference held recently in Dallas.  A panel of senior executives representing medical trade associations, meeting and event professionals, corporations and hotel management companies, delivered upbeat projections for 2010 for best-ever attendance at this year’s annual meeting and increases in the number of larger corporate meetings by this summer.  One senior exec even acknowledged that his company paid a price for cutting back on meetings and travel in ’09 and a new commitment to correct that in ’10.

Another senior exec predicted that while the meetings demand will return, those meetings will not be as opulent as we knew them.  Do you hear the words, “more responsible” here or “eliminate excessive”?  

You have to wonder, don’t you, how much pent-up demand there has to be after 18 months or more of cancelled meetings, incentive trips and those all important rewards for so many worthy qualifiers?  Surely, corporate America must realize by now how valuable those gatherings are for face-to-face, human interaction, communication, continuing education, morale building, and recognition. 

From all I have experienced, read and heard, there appears to be a consensus that with 2010 we may have, in fact, bottomed out and we are on the road to recovery, but a full recovery may not be realized until 2012 or beyond - - and it’s highly unlikely we will be returning to those record profit times of ’06 and ’07.  I believe we are headed toward a “new normal”.

A retail rebound?  According to a March 5th article in the Los Angeles Times, the retail industry’s slow, but steady recovery picked up pace in February.  U.S. retailers posted the best sales results since November 2007 - - one month before the start of the recession.  Merchants reported a 4.0 percent year-over-year increase, according to Thomson Reuters survey of 28 major chains - - the sixth consecutive month of increases.

The Times reported also that movie attendance - - a part of the business that had been flat or declining - - was up five percent over 2008 with ticket sales reaching $10 billion for the first time ever.

Is it just me, or does everyone experience crowded restaurants and bars at dinner time no matter where you are?  I keep asking myself, “what recession?”  Every restaurant that I have been to during Q4 ’09 and so far Q1 ’10 has been packed at dinner time.  I’ve noticed, however, smaller portions, entrée sharing, and multiple appetizers replacing the standard main course.  

And I could not get over the Saturday evening crowds recently at exciting new “places” like L.A. Live in the heart of Los Angeles’ new downtown center.  It was a very cool evening with some threat of rain yet I thought I was back in Times Square on New Year’s Eve.  The new L.A. Live - - complete with multiple food and beverage outlets, the Nokia Theater, Staples Center, cinemas, and an ESPN studio - - is something like Universal Studios’ City Walk on steroids.  L.A. Live offers some very, very good restaurant selections.  

What about this new “couch surfing” network of travelers?  As if the hotel industry wasn’t hurting enough in occupancy - - losing potential guests to cruise lines, time share, camping, RVs, and staying with friends and family - - now we have a new non-profit, international organization that connects travelers who stay as guests with locals in more than 230 countries and territories around the world.  Couch Surfing’s site claims one million plus members - - 75 percent aged 18-29 - - and 1.7 million successful stays since 2004.  One of the site’s testimonials tells of a couple from Florida just returning from a six month tour of Europe and paid for only eight nights.  I wonder if these 18-29 year olds will ever become regular hotel guests a decade from now after experiencing couch surfing all over the world.  More importantly, I guess, is what will our industry do to earn these couch surfers’ business?

© Copyright 2010



 
David M. Brudney, ISHC, is a veteran hospitality sales and marketing professional concluding his fourth decade of service to the hospitality industry.  Brudney advises lodging owners, lenders, asset managers and operators on hotel sales and marketing “best practices” and conducts reviews of hospitality (as well as other industry) sales and marketing operations throughout the U.S. and overseas.  The principal of David Brudney & Associates of Carlsbad, CA, a sales and marketing consulting firm specializing in the hospitality industry since 1979, Brudney is a frequent lecturer, instructor and speaker.  He is a charter member of International Society of Hospitality Consultants.  Previously, Brudney held hospitality sales and marketing positions with Hyatt, Westin and Marriott.
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Contact:

David M. Brudney, ISHC, Principal 
David Brudney & Associates 
Carlsbad, CA 
760-476-0830 Fax 760-476-0860 
(c) 760-994-9266
David@DavidBrudney.com
www.DavidBrudney.com
www.ishc.com


 
Also See Applying Five Tenets of Hotel Sales and Marketing in These Tough Times / David M. Brudney / January 2009
Meeting Planners Struggle to Control Costs / David M. Brudney / December 2009
Full-Service Hotels Look to Gain Group Business as Physicians Avoid Resorts / David M. Brudney / November 2009
Hotel Sales Director Firings Impact Meeting Planners, Too / David M. Brudney / October 2009
Selling Hotel rooms: Is the Process Really that Unique? / David M. Brudney / August 2009
Hotels Show Renewed Interest in Life Science Industry Meetings / David M. Brudney / July 2009
Meeting Planners Pressured by Management, Customers and Members / David M. Brudney / June 2009
Meeting Planners and Hotel Suppliers: Let’s Be Fair / David M. Brudney / June 2009
Time for Hotel Sales Professionals to Lobby Meeting Planners / David M. Brudney / April 2009
This is No time for Hotels to Cut Back on Sales and Marketing / David Brudney / February 2009
When in Doubt, Always Make That Call: New Generation of Hospitality Sales Professionals Lesson #14 / David Brudney/ November 2008
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Relationship Building - New Generation of Hospitality Sales Professionals Lesson #6 / David Brudney / April 2007
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New Generation of Hospitality Sales Professionals Lesson #3: Selling Time Balance / David Brudney / November 2006
New Generation of Hospitality Sales Professionals Lesson #2: Want to be Successful? Start by Packing your own 'Chute / David Brudney ISHC / October 2006
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