Leisure travel buoyed hotels in the immediate wake of the COVID-19 pandemic, but meetings and conventions now are bringing up the rear. In-person events have gained a newfound appeal as a result of Zoom fatigue and the sense of isolation from working at home.
That’s good news for hotels, but it presents challenges, too. Though properties continue grappling with labor issues, many meeting planners tasked with organizing banquets and other food and beverage functions are contending with menu sticker shock in light of higher food costs. At the same time, meeting attendees demand an experience that makes traveling to a conference (and, let’s face it, putting on pants) worthwhile.
So how are hotels working with planners to leverage each other’s assets and design dazzling, memorable events without breaking the bank? In short, by deploying creativity.
MEETINGS DELUGE
“Group business is raging,” declared Hilton CEO Chris Nassetta at the NYU International Hospitality Industry Investment Conference, earlier this summer. “Pre-COVID, 80% of our business was small and medium enterprises and now they’re back over COVID levels.”
The uptick appears poised to continue, said Hilton’s Tom Walters, SVP of food & beverage, Americas, citing Hilton’s second-quarter earnings report, which revealed that group bookings for 2024 grew 30%. “Our sales team saw the largest revenue bookings in our history for all future arrival periods,” he said.
Data providers are sounding an equally positive tone. “Now that the leisure wave has passed, there is more of a focus on group business,” said Patricia Shea, SVP of revenue for Knowland, a metric provider for the meeting & event industry. “Hotels are looking to provide that foundation of revenue with group business, F&B and other services for the rest of 2023 and into 2024.”
Independent meeting planner and industry veteran Joan Eisenstodt can explain, at least in part, why people are gathering once again. “There’s a euphoria among people after not seeing colleagues for up to three years and, for some working from home for that whole time, and being away from gatherings, the thrill of travel and being with others is a high.”
Prospective meeting goers also are in a “hug” phase, she said. “Now that there are no restrictions around touching, people want to greet each other with a hug.”
THE ’WOW’ FACTOR
After labor, the largest cost consumed by a hotel for meetings is food, an expense passed on to the meeting planner that can eat heavily and fast into a budget. Skimping, however, sometimes is not an option.
“The most notable theme we’ve seen since the pandemic is that meeting planners want to deliver over-the-top, exceptional experiences for their clients, and value for money is the goal,” said Walters. “Finding ways to carry the meeting’s theme or agenda into the F&B offerings is a great, value-oriented way to produce an exceptional experience that will resonate.”
He continued, “Many Hilton properties offer unique, existing on-site activations that groups can enjoy while staying mindful of budgets.”
For example, he said, within the last year, Grand Wailea, A Waldorf Astoria Resort, in Maui, has added to its group offerings a guided cultural tour, where guests learn about local elements, such as plants, followed by a chef-led dinner where dishes inspired by the tour are served. Or at the Waldorf Astoria Cancun, which opened late last year, a Mayan cooking demonstration is offered, where the chef explains the menu in Mayan and it is then translated into English and/or Spanish. Margarita classes also are offered. At the Hilton Los Cabos, an agave tasting room, named La Biblioteca, has been created and features a selection of more than 200 tequilas, mezcals and other agave-influenced spirits.
CAREFULLY CUTTING CORNERS
Meanwhile, some planners are finding ways to adjust their food and beverage offerings that cut costs without compromising the overall attendee experience.
“Hotels have to find ways to manage what they are capable of making with the staff that they have,” said event professional Tracy Stuckrath, host of the “Eating at a Meeting” podcast and a specialist in safe and sustainable food and beverage experiences at meetings. Coping mechanisms she’s seeing at hotels include day-of-the-week menus, where all groups in-house eat the same items, thus reducing inventory and staffing needs; cutting the number of menu options; or changing items to ease labor requirements.
Further, she noted, chefs are having to order food at different intervals for 2024 so they’re asking planners for menu selections 45 days out, versus the 72 hours they allowed at one time. “That doesn’t mean hotels have to ask for guarantees that far out, but this gives them a better sense of what to order,” she said. And, she noted, some properties are outsourcing their hors d’oeuvres and other items from caterers or ghost kitchens, since they do not have the staff to produce them. She’s also seen a surge in groups altering their attendance numbers, often at the 11th hour. But hotels still are finding ways to recoup some profit, or at least to prevent major losses, when such changes happen. “Hotels are charging fees for 10% increases or decreases in the guarantees,” she said.
For her part, meeting planner Eisenstodt found an end-run around a problem with providing a cost-effective breakfast during a recent military reunion. “We did not have enough interest from our group to justify a setup in a meeting room, so the catering manager had the chef add a daily buffet at breakfast each morning in the restaurant,” she said. “It was just added to the usual breakfast options, no headcount required. It was a big hit and nobody was late, or left on the curb in the mornings, before our off-property event.”
MANAGING MONEY
On the flip side, some companies are flush with cash and able to earmark it for events, Knowland’s Shea said. “There’s a trend where remote companies that are reducing office costs are putting that money toward employee culture building as workforces are more spread out.”
In fact, budgets generally are strong. A survey of 580 planners conducted last year for American Express’ 2023 Global Meetings and Events Forecast showed that 65% of planners said meeting spend was increasing. Further, in the report, Amex predicted a 3.1% rise in overall meeting spend.
Still, ever wary of what could come down the pike, meeting planners work to make their money go as far as possible. In Meeting Professionals International’s summer 2023 Meetings Outlook survey, planner Robert Kraus, owner of Small Conferences, said, “Costs are going way up, especially F&B. Properties that are willing to work to make it easier to save money will attract more business. The properties that are less flexible will lose out.”
Story contributed by Rayna Katz.