The pace of the recovery of group business at hotels in 2022 and the amount of business on the books already for 2023 have hotel executives feeling more confident in the segment.
During their companies’ respective fourth-quarter and full-year 2022 earnings calls, these hotel brand and real estate investment trust executives shared their optimistic views on the strengthening of group demand for hotels.
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Tony Capuano, President and CEO, Marriott International
“Our group business experienced the most meaningful improvement in 2022. In the U.S. and Canada, fourth-quarter group revenue increased 10% above the same quarter in 2019. Group revenue for 2023 is already pacing up 20% year over year, with room night and rate gains each quarter. Given strong lead generation and increased rate quotes, especially for in-the-year-for-the-year bookings, we expect group revenues this year to strengthen further. In 2022, around half of group room nights were booked in the year, compared to one-third in 2019.”
Chris Nassetta, President and CEO, Hilton
“Group [business] saw the biggest quarter-over-quarter improvement, with [revenue per available room] fully recovering to 2019 levels, driven by both occupancy and [average daily rate] gains. Company meetings boosted performance, [improved] more than 7 points versus the third quarter. … Comprising roughly 20% of our normalized mix, group is a segment with the greatest visibility. For 2023, group position is up 25% year-over-year and nearly back to 2019 levels. Even with robust forward bookings, the pipeline still remains strong with tentative bookings up more than 20% versus last year, helped by rising demand for company meetings as organizations bring their teams back together. Additionally, pricing for new bookings is up in the low double digits and lead volumes in January were at all-time highs.”
Mark Hoplamazian, President and CEO, Hyatt Hotels Corp.
“Group … is plus 21% pace into the year. We feel really strongly about that. We had pickup last year that was in excess of booked rooms on a consistent basis. None of that is included in that base number. And that includes some real weakness later in the year that we are currently observing and seeing what we can do to ameliorate really in three key cities — Chicago, Atlanta and New Orleans — that just have really weak citywide patterns. But even with that we’re showing really good pace. … In the backdrop of all of this is a slowing in the second half with respect to relative macroeconomic conditions. … We see credit spreads compressing, but rates remaining relatively higher for the time being. We have these dynamics, which are showing great signs of strength across our business lines, including business transient. But we feel like we’ll have dramatically better visibility post- [first quarter] into [the second quarter].”
Read rest of the article at CoStar
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