Hotel Companies Crank Up Courtship of Planners

The hotel news came fast and furious last week from IMEX America in Las Vegas. One after another, hospitality giants trumpeted announcements about programs or technology designed for planners. Hyatt Hotels rolled out its Planner Portal, Marriott's Convention & Resort Network teased its forthcoming Mastermind peer-to-peer community, Crowne Plaza introduced its Meeting Mentors, and InterContinental Hotels Group built up its sourcing platform through a collaboration with Social Tables and named it "Shop & RFP." Hoteliers have always prized group business, and IMEX America has become a major industry event, but even so, the planner courtship seems particularly intense at the moment.

A couple of factors have likely piqued hotelier interest in renewing that courtship, said hospitality industry analyst and consultant Bjorn Hanson, an adjunct professor at NYU's Jonathan M. Tisch Center for Hospitality and Tourism. First, after an extended period of soft demand, group business is bouncing back. "For the last few years, the group segment has just been hard," Hanson noted. "Who wants to invest a lot of resources to market to a flat or even declining demand segment? And in general, group was also an increasingly price-sensitive or lower-revenue demand segment."

That has been changing over the course of this year. Group demand growth is "finally real and really strong," according to Jan Freitag, senior vice president of lodging insights for hotel-industry data provider STR. Aside from a slight summer dip, group demand has been steadily increasing since the spring of this year, and as of last month was climbing at a clip approaching 2 percent.

"Now," said Hanson, "hotel companies do want to sell into that growing market. And that improvement is being seen not only in the level of demand, but also with less price sensitivity." The potential for more group room nights at higher rates is an alluring one for hoteliers.

The other factor is that group business is generally a good way to build a base occupancy, explained Hanson, and with demand on the rise, adding group nights will allow hotel revenue managers to more aggressively raise rates across the board. "So part of this group focus is not that it's a priority, per se, but it's part of a model that leads to optimization of rates," he said.

To some extent, the group-business initiatives that include a technology component indicate that the segment is simply catching up. Hotels have traditionally offered more robust and varied technology platforms for transient-travel booking.

That begs the question, how useful will these chain-specific platforms be for planners? Will they embrace tools that meet their needs for doing business only with one hotel supplier? It's a valid question, according to Hanson, but the initiatives needn't be wildly successful to work: "If it creates even a couple of point shifts in market share, that's significant on a national basis," he said. "It doesn't have to work for every planner, and it doesn't have to work at every hotel. But if the initiative offers something, whether it's a good tool for planners, or it communicates an interest or priority in doing business, that can make a difference. If even 5 percent of planners can make use of a new app or tool, and like it, that's enough to shift enough demand to have a measurable effect."

Hotel executives insist the initiatives are about much more than driving market share, however. "This is not a sales effort," said Amy Popper, senior marketing manager for Marriott's Convention & Resort Network, about the new Mastermind program. "It's our investment in creating conversation. It's our chance to create community."

Similarly, Hyatt's intent is to improve the hotel company's relationships with their clients. "We're trying to get our event-planning people to move past what the specs of an event are," said Hyatt senior vice president of events Steve Enselein, "and to really understand who the customer is and what's important to them."