Corporate group meetings in hotels and resorts may bounce back more strongly than might be assumed, according to Mark Hoplamazian, president and CEO of Hyatt Hotels Corp. The commonly held view is that the holiday and leisure market will recover first followed by trips taken by individual business travelers, with so-called “group” activity—offsite business meetings and such—trailing along behind.
Hoplamazian, however, said that group business may return “more purposefully and in a more meaningful way” than has been widely anticipated to date.
The comments came as Hyatt reported fourth-quarter and full-year earnings for 2020. The net loss for the quarter was $203 million against $321 million of income in 2019. Revenue per available room during the quarter decreased 69 percent. The net loss for the year was $703 million against income of $766 million. RevPAR decreased 65 percent for full-year 2020.
Expressions of Confidence
Referring to 2020, the company said occupancy was consistent with third-quarter trends, driven “primarily by favorable leisure transient demand, particularly on weekends and holidays in the fourth quarter. Business transient and group demand continued to be muted.”
But Hoplamazian also said that interest in group bookings was picking up. Companies and other organizations, he indicated, want to engage in business development that has been stymied by the health worries and lockdowns. He said that meeting organizers were increasingly keen to re-establish: “the essential human component of getting back together.”
He added that clients were becoming increasingly wary of costs that come with digital interaction. He acknowledged that digital gatherings generally incur lower travel expense but said virtual conferencing required outlays on audiovisual equipment and what he termed “help-desk” issues—tech support for participants.
He acknowledged the emergence of hybrid solutions that combine personal and virtual interactions. He also emphasized that for Hyatt these group bookings were a relatively small part of the overall business
Hyatt diffused the negative impact of the 2020 numbers with expressions of confidence in the company’s ability to grow in size. Net growth in rooms in the fourth quarter of 2020 compared to the same period in 2019 was 5.2 percent.
Hoplamazian said of 2020: “Amidst a backdrop of challenging operating fundamentals, our net rooms growth was strong, demonstrating the strength of our brands. We opened 72 hotels and entered 27 new markets. Our teams also executed new signings to maintain a pipeline representing over 40 percent growth of our existing hotel rooms in the future."
Hyatt is not paying a dividend in respect of the fourth quarter. It paid 20 cents per share in the first quarter of 2020. Last March, however, the company suspended its quarterly dividend and all share-repurchase activity.
A version of this story originally appeared on Hotel Management's sister site Hospitality Insights.