share
by Cheryl-Anne Sturken | January 13, 2015

Roger HelmsIt's official. Third-party provider HelmsBriscoe has blown past the $1 billion room-revenue mark, generating $1.003 billion in group room sales in 2014. That's a 17 percent increase over the $857 million generated in 2013, and a clear testament to the Scottsdale, Ariz.-based firm's volume purchasing power. Says Roger Helms, founder and chief executive officer, "We put our foot on the gas, and it just stayed there."

That's an understatement, given the fact that HB's numbers achieved growth across the board. In 2014, the firm booked 5.3 million group room nights, roughly one million more than it did in 2013. And it handled 40,000 group programs, an increase of 14.2 percent in group business over the year before. Much of that increase, says Helms, came in the first quarter of 2014, when business was up by a whopping 16 percent.

Even as the pendulum swings solidly back into a seller's market, group business has continued to steadily increase, says Helms. According to the Global Business Travel Association, U.S. companies spent an estimated $292.2 billion last year on business trips, a 6 percent increase over 2013. That momentum is expected to continue, with the GBTA forecasting $310 billion in business travel spend for 2015, a further 6.2 percent year-over-year increase.

"Right now it's a very tight market, because there is limited new room supply," says Helms. "Planners are not going to be able to shop around like they did in the past two to three years. They are going to have to learn to change their buying habits."

According to Smith Travel Research, the development pipeline will increase hotel room inventory by a paltry 1.3 percent in 2015, and much of that will be in the limited-service sector. The data compiled by HB's 1,200 global associates in 2014 indicates a shift in client buying strategies. Squeezed out of first- and second-tier cities because of high leisure demand driven by international markets such as Asia, they have begun shifting their meetings to tertiary markets with a broad selection of hotel inventory and good airlift. "What we have also noticed is that convention centers in third-tier markets have really stepped up their game, and that's been a huge appeal for groups looking for good overall value," says Helms.

On the international front, as room rates in perennial favorites like London and Paris have continued to skyrocket, groups have turned their attention to destinations such as Spain, Portugal, Greece and Italy. In fact, for HB, the inter-European market was their single strongest vertical market in 2014, growing by 40 percent over 2013.

As HB stares down 2015, its strapping on its seatbelt, says Helms. "We are entering a very fast-paced market, with RFPs flying everywhere," says Helms. "For a year and half now, the hotel community has been waiting to drive room rate, and they are making up for lost time. That means groups are going to have to get in the door fast or risk being locked out."