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Current Hotel Sourcing Trends in North America

When the COVID-19 pandemic hit last year and travel, both leisure and corporate, came to a halt, so did business for many of our hotel partners. But, with successful vaccine roll outs taking place across North America, an upswing in hotel bookings has occurred as well.

In this article, BCD M&E’s VP of Industry Relations for the Americas and APAC, Rebecca Jones, shares her knowledge of the current trends in hotel sourcing for North America.

Hotel lobby, front desk and seating area | Global agency, BCD Meetings & Events

Leisure and corporate sourcing trends in North America

Current leisure trends

Recently, leisure demand has grown stronger which is anticipated to continue through the summer. This trend is driving prices up and filling hotels, especially during the weekend pattern. We’re also seeing some hotels turn down groups in favor of the individual luxury leisure segment. Demand in the non-corporate area (social, military, education, religious and fraternal groups) has been strong and filling up the mid-scale and economy chain scale hotels.

Pattern, dates, location flexibility and speed to contract are currently key to securing space. Hesitancy to commit to booking can result in losing the space because of these current dynamics.

We’re seeing compression in Q3-Q4 (2021) in markets that have opened despite COVID-19 such as Florida, Texas, and Arizona. Non-urban areas and resorts near the beach, with warm weather or mountain destinations are also highly sought. The outlook for 2022 also includes compression in key markets that are already popular in “normal” times, which indicates hotels will be: less likely to hold space and trending towards first come first served, less likely to provide more space to allow social distancing in 2022 and beyond (or need to pay for it) and they will select the most valuable piece of business (RFP value to a hotel).

Woman wearing facemask while carrying her suitcase into the airport | Global agency, BCD Meetings & Events

Current corporate trends

In the Caribbean and Mexico, we’re seeing RFPs for Q3/Q4 2021 and into 2022, but more demand for 2023 and 2024 as incentives require a longer lead time. This is creating compression for short-term demand as many programs were moved from 2020/Q1-2 2021 into 2022 and leisure demand is pacing at record levels. Hotels recommend locking in programs now as rates will increase.

Hotels are requesting quick turn-around for signatures and in some instances, if not signed by the deadline, space is dropped, or rate increases which makes acting quickly critical. Be sure to read the entire contract and fine print and look for any additional fees or gratuities added to F&B or other services.

We’re seeing some global programs happening in the U.S. for the balance of the year and into Q1 2022. Be aware of international attendees and include additional attrition if certain countries still have travel restrictions. Hotels are currently not looking to pass through additional labor cost and meeting space rental in 2021 but might change in 2022. Depending on the nature of the program, meeting space rental might still apply.

One thing to remember is social distancing is still in place for 2021 and hotels are pushing back to provide more space to allow social distancing in 2022 and beyond. We’re seeing international hotels not willing to contract space based on social distancing in Q1 2022.

It’s been challenging for hotels to keep skilled labor based on current occupancy levels but once occupancy remain more consistent, there will be improvements. Profitability for hotels is affected due to higher labor cost and as commodity costs are raising, it means profitability is affected and will impact rates and F&B pricing. Resort fees are also increasing.

Key takeaways:
  • March occupancy levels showing strong signs of recovery.
  • Rates increased significantly in March – 25 markets showed the largest week-over-week increase in ADR and reached their highest level in the metric since the middle of March 2020.
  • Luxury and Independent showing the strongest rate increase.
  • High compression in resort areas (sun, beach, mountain, warm weather) and non-urban.
  • 2022 showing compression as many programs were rebooked from 2020 and 2021 plus additional demand.
  • Seeing demand increase for 2023 and beyond especially for large events and incentives.
  • Corporate is coming back while leisure and SMERF segments continue to perform at high levels.
  • Large meetings are coming back.
  • Consult with your NSOs prior to sourcing to identify best opportunities.
  • Don’t delay the sourcing process as compression is real.
  • Have all approval process in place:
    • to ensure quick signature execution
    • to avoid losing space or seeing price increase
  • Flexibility is critical:
    • location, dates and pattern
    • be open to alternative destinations/options
  • Hotels will be focused on the most valuable RFP
    • highest potential revenue
    • least amount of red tape – restrictive T&C’s, excessive number of concessions or additional requirements
    • fastest turn around
  • Budget for 2022 and beyond: account for anticipated ADR growth, resort fee and potential additional cost increases and potential rise in F&B and labor costs


Originally published May 10, 2021 12:23:05 PM
Last updated on Jan 3, 2023 10:15:06 AM

Written by Rebecca Jones


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