Attendance Boost

Attendance Boost

Strong gains in transient demand over the past few years have led the U.S. lodging industry out of the depths of the recession. However, it wasn’t until 2011 that hotels began to see signs of recovery in the group demand segment. Looking forward, the people responsible for planning meetings and exhibitions are optimistic, and it appears that hotels will continue to see more attendees roaming their hallways in 2013.

For several years, PKF has conducted an annual survey of meeting planners sponsored by ConventionSouth magazine. In October of 2012, a total of 79 planners located across the country answered questions about the 2012 and 2013 events they have organized. While the survey focused on events held in the southeast region of the nation, the meeting planners were located throughout the country. Some of the findings of this survey should have a big impact on hotel owners and operators.

To start, the vast majority of planners surveyed stated that the number of events they’re organizing in 2013 will equal the number they planned in 2012. But, while the planners expect the volume of events to remain flat, they also anticipate greater levels of attendance and expenditures.

Forty-three percent of the planners we surveyed said they would be operating with a larger budget in 2013 than they had in 2012. In turn, 46 percent are budgeting more for meetings this year than they did last year. Part of the reason for the extra expenditures is the expected increase in attendance. Nearly 90 percent of the survey sample said 2013 average attendance levels would be equal to, or greater than, what they were in 2012.

The planners we surveyed recognize that the hotel industry is recovering and meeting attendees will have to start paying more for hotel rooms. During negotiations for upcoming events, planners have found hotel managers less willing to concede room rates. Last year, hotels offered meeting planners lower room rates as an incentive to book their group only 33 percent of the time. This is down from 58 percent in 2011.

With hotels offering fewer discounts, 72 percent of the survey participants have planned for an increase in room rates in 2013. An additional 10 percent say rates will remain the same as 2012, but labeled existing hotel prices as high.

Resigning the need to pay higher prices, planners are no longer looking at room rates as an area where they can save money. Guestroom price was ranked as the sixth out of 11 areas in the meetings budget for potential cost savings. This is down from a fourth place ranking in 2011.

While room rates are rising, only 16.4 percent of the survey participants have had trouble booking rooms for 2013. In fact, 24.6 percent said rooms are easier to find in 2013 than they were in 2012. This helps to explain why most planners are still not willing to move the dates of their events to save money at their preferred hotel.

Given the perception that rooms are still available in 2013, the lead time for booking events has not changed for most planners. Seventy-two percent of those surveyed said the length of the booking window in 2013 is the same as it was in 2012. Twelve percent said it will increase, but 16 percent say it will shorten.

Consistent with surveys of transient travelers, meeting attendees yearn for free Internet access. According to the perceptions of the planners surveyed, free Internet is the most important meeting site criteria for attendees. Conversely, for meeting planners, complimentary WiFi ranked just ninth out of 16 factors that they deemed as most important when selecting a meeting site.

The selection criteria for a meeting facility rated as most important by the planners are, in order: Available meeting space, willingness to negotiate contracts, price of meeting space, price of hotel rooms, and service standards.

Looking ahead, meeting planners are as optimistic as ever in recent history regarding the health of the meetings industry. Forty-six percent of the planners surveyed believe the industry will be healthier in 2013 than it was in 2012. This is the highest percentage recorded since 2007 for this same survey.

For hotel owners and operators, growth in group business will further boost the record levels of lodging demand next year. While the direct benefit will be felt by the meetings oriented properties, capacity at these hotels frequently leads to greater compression in the overall market, which benefits all hotels.

Robert Mandelbaum is the director of research information services for PKF Hospitality Research LLC.

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