The Performance Group (TPG) Completes 9th Annual Hotel Roundtable

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TPG sales and purchasing recently met with global hotel partners to discuss the hospitality industry. A variety of trends were uncovered during the open forum, including the growing economy and its impact on corporate group travel.

Hotel space is now on a first come, first serve basis.

TPG Hotel Roundtable participants agreed that the economic recovery is driving up the demand for corporate meetings and events. In addition, transient travel is rising and group sizes are increasing. While business travel is at its highest since 2009, hotel growth is slow to meet the demand and inventory is tight. Hotel owners are capitalizing on this trend by ensuring that their inventory best captures both transient and group revenue. Additionally, old standards (like 20% cumulative attrition) have become tougher to negotiate, and contracted concessions are often tied to room block performance.

As the economy continues to recover, event planning companies should follow TPG’s lead in pushing clients to consider alternative dates. There are still deals to be had, but corporate event patterns must be flexible. While inventory is tight, groups are slow to commit and second option contracts have merit. Hotel space is now on a “first come, first serve” basis, and the first group to sign in ink and hand over a deposit gets the deal. Another dominant topic in the discussion was the predicted rise in room rate over the next five years, and the need for clients to lock-in multi-year contracts. Food and beverage pricing is also set to increase due to climate change, and internet connectivity remains non-standardized and is also subject to price volatility.

While China and India remain dominate markets for hotel growth, New York appears to be a US hot spot. London, Sydney, Bali, Dubai, parts of Africa, and South America in general are also enjoying a high conversion rate. One trend that spanned several hotel chains was the addition of limited service brands created to capture a variety of travelers. It also seems that customized hotel experiences are paving the way for the future as indicated by the following: Starwood’s iPhone check-in, MGM’s Stay Well rooms, Hilton’s Digital Lobby, and Hyatt’s Women’s Experience.

The popularity of mobile apps continues to explode. From ROI measurement to incentive networking to onsite education, their use has become increasingly creative. On the flip side, “no technology” meetings are trending as leaders seek to focus the audience’s attention on content rather than instant feedback and socialization. Virtual meetings remain a meeting component, but they’ve yet to replace face-to-face gatherings. Finally, green meeting and community give-back are still important – especially for the younger workforce.

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Stuart Patton
The Performance Group
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