By Daniel Melnyk, CEO and Founder of Parclane
In what felt like the blink of an eye, 2022 came and went. 2022 was the year we found our way back to relatively normal, and for industries like hospitality, it was a year defined by recovery. 2023, however, promises to be defined by something else entirely – growth. For a long time, hospitality brands found themselves patiently treading choppy waters, and now it’s finally time to swim ahead.
As we prepare for what lies ahead, it’s more important than ever before for hoteliers to get acquainted with the trends and statistics set to shape our industry moving forward. The group sales and meetings industry market is of considerable interest, as this hospitality segment is expected to gain significant momentum over the coming months. In the world of hospitality, group business is big business, and this segment represents a critical revenue opportunity for any hotel that successfully capitalizes on it. With this in mind, we’ve compiled a list of the latest hotel group sales trends and statistics for 2023 that you absolutely do not want to miss.
Events and Meetings are Back
Amadeus reports that group and business travel segments are steadily recovering in Q4, with 4.3 million group room nights already booked for H1 2023. Moreover, the global business travel segment is expected to recover fully by 2024. More specifically, it is forecast to increase by 14% in 2022, with the US and China seeing the largest growth (30% each). (Leslie Josephs). According to HotelAVE, group demand should bounce back to around 90% of pre-pandemic levels next year, but a 5 percent year-over-year increase in group rate will push the performance past the 2019 mark.
In addition, 64% of event professionals say spending increased this year, and while the events industry saw a market size decline of -9.8% per year from 2017-2022 (due to the COVID-19 pandemic) as of 2022, the industry has seen a net growth of 4%. Moreover, 63% of marketers plan to spend more on live events in 2023 and beyond, and only 40% of marketers plan to increase spending on virtual events, while 16% actually plan to decrease spending in favor of live events.
An Optimistic Outlook
The American Express Meetings & Events 2023 global forecast utilized an ‘optimism scale’ of 1 to 10 to take a temperature of the industry heading into 2023. According to those findings, 77% of the participants in the Amex Meetings & Events survey rated themselves an eight or higher concerning their outlook for the industry’s health in 2023. Additionally, more than two-thirds (68%) of participants in the Amex forecast expect their attendee numbers to reach pre-pandemic levels within the next one to two years. Finally, meeting volume climbed back to nearly 90% of pre-pandemic levels in September, according to Knowland, and based on its Meeting Recovery Forecast. Overall meetings and events volume will surpass 2019 levels in mid-2023.
Leveraging Automation Technology
Data from Amadeus shows that RFPs increased by 51% in 2021 compared to 2020. When we couple this RFP influx with the labor shortage currently plaguing the hospitality industry, we realize the paramount role that automation and technology will play as hotels compete for group business. The National Association of Sales Professionals cites data entry as one of the top time-wasters for those in Sales. Unfortunately, most group sales teams only spend 30% of their time actually selling and 50% of buyers end up choosing the vendor who responds first. The truth is, having too many individual manual tasks results in not only time wasted but also countless deals lost.
To this effect, teams that use technology have an average 45% proposal win rate, and 68% of teams that use software say their stress levels at work are “almost always manageable” compared to their peers without dedicated tools.
It’s time for hotels to invest in marketing automation platforms that empower their sales teams to increase productivity, put the buyer first to shorten sales cycles and convert more profitable business. Hotels can leverage this demand generation technology to unlock the potential in S&C data, giving teams visibility through technology-enhanced reporting to generate new group revenue with personalization at scale.
The GBTA/CWT Global Business Travel Forecast reveals that the 2023 cost per attendee is expected to rise another 7%, which can be attributed to the increased cost of meeting space to room rate, food and beverage, and A/V and production costs. According to the “What’s Trending 2023” report from BCD Meetings & Events, an event that cost $20,000 in 2019 could run $27,000 in 2023.
In response to those rising costs, about two-thirds of respondents to the Amex forecast study felt their overall meeting and event spending would increase in 2023, with about 12% of that group expecting an increase of 11% or more. For planners hoping to reduce their budget(s), Amex reveals that the first two areas to cut will be the number of nights and off-site activities (23 percent and 21 percent, respectively, in North America). Planners are expected to focus their cost-saving efforts on areas that are expected to maintain attendee experiences.
Bleisure and Blended Travel
Currently, 60% of all global business trips turn into business-leisure (bleisure) trips, the term affectionately coined to describe trips in which work and leisure activities are combined. According to a Statista survey conducted in early 2022, 35% of responding business travelers worldwide thought that it was likely that they would go on bleisure trips in the future. According to the Future Market Insights report, the bleisure tourism market is projected to reach $497.5 billion in valuation by the end of this year.
According to the Morning Consult, around 4 in 10 employed people say that they will travel more frequently and at different times of the day, week, and year than they used to before COVID-19 due to flexible work schedules. Just over 1 in 5 travelers with blended plans cite the ability to save on costs as a reason to combine business and leisure trips. Additionally, around a quarter of travelers with blended plans (26%) say they are motivated to combine their business and leisure trips if doing so would make their trip more enjoyable or give them a chance to travel to places they otherwise wouldn’t.
Sustainable Practices In High Demand
Sustainable travel is currently the talk of the industry – and the group travel segment is no exception. Booking.com reveals that 70% of global travelers say they would be more likely to choose a sustainable accommodation – whether they were looking specifically for one or not. Moreover, 50% of global travelers say that recent news about climate change has influenced them to make more sustainable travel choices.
With this in mind, environmental, social, and governance (ESG) practices have become a focal point of event and meeting planners, with an emphasis on eco-friendly venues and events that incur less food waste, less single-use plastic, and help to bolster or positively engage with local culture and communities. With this in mind, organizations like EventCycle, “repurpose and redistribute leftover event materials to charities & community groups as well as back into the events industry.”
Trends and stats are continuously evolving rapidly, so the focus needs to be on adaptability rather than certainty. After all, few hotels have maximized their group sales revenue by merely keeping with the status quo. With so much pent-up demand for meeting and events business, and planners showing frustration with their venue suppliers, hotels have an unprecedented opportunity to capitalize on this demand. Thankfully, the advent of automation technologies can make hotel sales teams more efficient—and measurable growth highly obtainable. For hotels looking to scale responsibly, marketing automation allows for massive growth by both building the funnel and delivering on the kind of brand experience that is needed to win.