Industry Update
External Article25 June 2020

Convention Plateau: The Hotel Recovery Can Only Go So Far Without Group Bookings

Unless a vaccine or widespread coronavirus treatment becomes available this year, a W-shaped hotel industry recovery seems likely. But that doesn’t mean hoteliers should accept that fate — alternative revenue streams are out there.

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U.S. hotels are beginning to reopen following coronavirus-related shutdowns, but until a vaccine or accepted treatment is widely available, the recovery is almost certain to hit a roadblock.

Group business and convention travel do more than contribute to a hotel's occupancy and revenue per room figures. These types of bookings also fuel profitability in an array of revenue streams and amenities at a property. Group business travel drives nearly a third of room revenue across all luxury and upper-upscale U.S. hotels, said Nathan Seitzman, a partner in McKinsey & Co.'s travel practice.

Social distancing measures have hotel analysts anticipating group business and convention travel will lag other sectors in recovering until there is a viable coronavirus treatment plan. That theoretically puts a ceiling on how far hotels can go with profits before one of the several potential vaccines in various stages of trials makes a breakthrough.

Read the full article at skift Inc.

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