New Group Data Tool Defines Drivers of Meetings Business

By Jim Vandevender Chief Marketing Officer, Knowland | September 25, 2016

As hotels head into the fourth and final quarter of 2016, sales operations and revenue management teams are beginning to look toward next year. Budgets and marketing plans are beginning to be developed that hope to capture the lucrative high demand group market, drive RevPar and meet occupancy and ADR forecasts. But questions loom. Which segments will remain robust and fruitful? Will the high demand within corporate, for example, begin to ebb with the hotel construction pipeline in full swing supplying more and more inventory in most cities? What subsets within corporate group will continue to drive demand and which ones will be the new emerging provider of group room night opportunities? And if the market softens and hotels begin to pay more attention to SMERF then which accounts within that often ignored segment are having meetings that may match a hotel's group goals and booking parameters? Up until recently questions such as these were impossible to answer. That, however, has changed. New group data tools have emerged giving us the ability to look under the covers of the once hard to define group market.

Data tools that predict trend in the group meeting segment have, until recently, not been as robust or as developed as the data and predictive analytics tools available as they are for the transient side. In fact they have been almost non-existent leaving analysis of group drivers up to hunches and guesswork. But big data within other areas, namely transient activity, has existed for years. Prior to Randy Smith and his wife starting Smith Travel Research there was very little data at all on any drivers of market performance for either group or transient . What the Smiths began setting the stage for can only be considered an explosion in market data intelligence over the ensuing decades.

Following the creation of STR, a company called Rubicon, later absorbed by TravelClick, teamed with the major brands to launch a full cross-segment, cross-channel, complete picture of market demand both historical and future. This brought a whole new level of transparency of market demand and market share to the hotel industry. The focus up until this point however was heavily slanted toward non group segments. In the early 2000's TravelClick launched Hotelligence, bringing a new level of market intelligence, focused on the GDS channel. Now, more and more light is being shed, finally, on the world of group meeting activity with tools such as Knowland's Market Analytics having been recently released. The real picture of actual drivers of group activity has, until recently, been difficult to evaluate since brands closely protected where their group business was coming from and the holistic picture of a market had to be pieced together.
Where and how is group influencing current occupancy and ADR performance within US hotels? With new technology like Market Analytics, we can see that group demand is certainly still very strong but there are possibly storm clouds on the horizon. Recent reports tell us that occupancy has declined even though average rate and RevPar are holding somewhat firm.

When 2016 comes to a close, hotel sales teams will look back and examine what segments and subsets drove the group market. Will these latest occupancy reports hold true for Q1 of 2017? Knowland, a globally recognized provider of meeting and group data, recently decided to examine what the drivers of group business were in 2015 in secondary and first tier US cities so that comparisons could be made when year end 2016 results are tallied in a few months. It is interesting, again, to note that the ability to shed light on the usually opaque drivers of meeting business from a big picture holistic point of view has only been recently developed. Individual hotel brands historically have known what segments drove their own business but had no way to know how that compared to the same account's performance in their competitor brands. Without an across all brands and across all markets view of actualized group activity there was no way of knowing what segments were up in volume and which were down or which ones drove the business that did actualize. That has now changed.

In their recent findings, Knowland examined twelve major first- and second-tier cities. While the majority of these cities saw an overall increase in group business from 2014 to 2015, there were some interesting results. Pharmaceutical and financial/banking groups have typically been acknowledged as reliable drivers of group business. In the examination of these twelve sample markets, however, those two sought after segments were minor contributors when compared to other segments. In these cities, national association meetings outweighed pharma meetings 2.6 to 1. Overall, associations and technology were two of the biggest drivers of group business in 2015 in these sample markets.

For test group purposes, Knowland looked at actualized group business across all chain scales in the following first tier markets: San Francisco, Chicago, Seattle, Dallas, Orlando and Boston. The following secondary markets were then studied as well: Phoenix, Indianapolis, Tampa, Charlotte, St. Louis and Detroit.

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