U.S. hotels will continue facing a challenging group business market, according to the Cvent’s latest Group Business Outlook, a regular quarterly report that provides a two-year, looking-forward review of group booking activity at hotels in the United States. In fact, fewer group rooms have been booked for six of the next eight quarters.
“While group booking pace has picked up slightly compared to last quarter’s report, the overall 24-month view is still fairly weak,” said Jeffrey Emenecker, senior director of analytics, Cvent. “As we look at the next two years, our sourcing data shows a relatively flat awarded group rooms pace and a slight downturn in awarded RFP activity within the U.S. market. Supply continues to increase, but booking pace is not keeping up, which means a drop in group occupancy across the board. Our hope is that hoteliers can use this outlook to develop and adjust their group strategies to drive more business.”
Ironically, the group business outlook could be good news for the tour and travel/leisure sector of hotel business, as lower business group bookings could mean lower prices for leisure groups.
The outlook report uses data from the Cvent Supplier Network (CSN), which saw $16 billion in unique RFPs sourced in 2018. Based on this large volume of sourced business, the Supplier Network numbers can provide a good indication of the pace of group business in the U.S.
The report, which uses data from June 30, 2019, shows that awarded group business is expected to:
—Increase in Q3 of 2019 by 1.5 percent;
—Increase by 0.8 percent in and Q4 of 2019, by 1.5 percent and 0.8 percent, respectively;
—Decline by as much as 3 percent next year.
Meanwhile, overall awarded RFP activity in Q2 is below average and down from Q1. In last quarter’s report, Cvent attributed the Q1 slowdown in part to the commission policy changes that went into effect this year and pulled greater award activity forward into Q4 2018.
The three tables below illustrate the report in graphic fashion.