Group booking expected to ramp up for the end of 2016

Group booking growth in the U.S. has remained strong throughout 2016, though projections for the segment sometimes appear scattered. Earlier this year, group bookings were on pace to outshine transient, before decelerating in June. But a new report from TravelClick shows group booking pace improving for the end of 2016, and picking up steam early next year.

According to John Hach, senior industry analyst at TravelClick, groups have an advanced booking curve over transient, meaning early bookings are a strong sign of how a hotel is prepared to fare in the months ahead, but this also means there is a greater focus on capturing new business as early as possible through advanced bookings.

“The group segment needs to be a constant focus for hotels for a few reasons,” Hach said. “Looking at overall transient pace, the pace of new reservations is not as robust now as it was in 2014-2015. If [your hotel] is not looking for groups then you become more dependent on transient, but because transient is relatively stagnant I advise competing more aggressively for groups.”

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A longer summer, in concert with other factors, could have contributed to odd group booking trends in 2016.

One reason Hach gives for the spotty performance of the group segment earlier this year is the extended summer that travelers took advantage of. “The booking curve for summer came a little earlier this year, but we’ve seen a good advanced booking pace through May. From June through September, group booking pace was down a little, and that put a little extra pressure on the segment, so hotels need to look at how competitive their pricing is. Hotels with competitive rates did very good during that period.”

Looking forward, for the next 12 months (September 2016 - August 2017), transient bookings are forecasted to be up 2.1 percent year over year, while average daily rate for the segment is expected to rise 1.8 percent. Leisure is expecting occupancy gains of 3.7 percent and ADR gains of 2.3 percent. In comparison, group bookings are forecasted to rise 4.4 percent in committed roomnights over the same period last year, while ADR is up 3 percent.

In order to take advantage of these gains, Hach said hotels need to be aware of events and aggressively push for advance bookings. Utilizing business intelligence tools is considered a must at this point, as they allow operators to analyze trends and play to their strengths.

“If you are near a location that pulls in consistent transient business, you are strong, but having access to advanced business intelligence allows you to be selectively competitive,” Hach said. “We are in a different marketplace than we were in two years ago. We have to ask what we can do differently now that we haven’t done before.”

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