by Michael J. Shapiro | June 01, 2015

Group business has rebounded in a big way over the past several months, with demand not only catching up to the transient side but, in some cases, surpassing it. For planners, that means higher rates and fewer available dates, especially in the largest U.S. cities.

Those conditions, in part, have driven business to second-tier cities, as planners seek out better availability and lower rates. Here's a look at why five standout destinations are enjoying a burst of success that promises to continue for the long term.

Tucson, Ariz.
The number of eRFPs for meetings in the Tucson area has increased dramatically year-over-year, with Cvent reporting a 25 percent rise and Lanyon's Smart Events Cloud revealing a jump of nearly 39 percent. "We've seen consistent growth for the past three years," says Graeme Hughes, director of sales for Visit Tucson, "and we've seen an increase in corporate meetings."

For Tucson's January-to-March peak season this year, the destination recorded a 9 percent year-over-year increase in overall occupancy and 10.4 percent higher RevPAR than last year. Group business tends to comprise 30 to 40 percent of Tucson's occupancy.

As of October 2014, the Tucson Convention Center has been managed by SMG and seen $8.8 million in renovations, including new seats, updated concession stands, and new sound and video systems.

Many groups that choose Tucson are drawn to its half-dozen resorts, accounting for about 2,700 guest rooms, along with meeting and event space. Major renovations have been undertaken or are planned at many of these properties. Last year, the 487-room Westin La Paloma Resort and Spa debuted a $38 million renovation, and the JW Marriott Starr Pass Resort & Spa updated all if its 575 guest rooms in summer 2013. This summer, the Loews Ventana Canyon Resort will renovate its public spaces and all 398 guest rooms, and the 428-room Hilton El Conquistador will follow suit next spring.

Desert air. "Air service is an improving story for our destination," says Hughes, who says his DMO has been working with the airport authority to add more service to the northeast corridor. "A regular departure from New York would do wonders in terms of opening up that market."

Taking note of the area's leisure appeal, Visit Tucson has been more actively promoting its outdoor adventure allure to planners. Activities such as mountain biking, hiking and birding are now more commonly making their way into meeting activities, Hughes says.

It's also gotten easier for planners to incorporate off-site activities, restaurants and nightlife into the agenda. Last summer the city launched Destination Downtown, which features a new light-rail system that connects three different retail/entertainment districts.

Few cities have been as much in dire need of a turnaround as Detroit was a few years ago. "We'd gone through the negativity of our mayor being indicted, and eventually getting convicted and going to prison," notes Bill Bohde, senior vice president of sales and marketing for the Detroit Metro Convention and Visitors Bureau, "and then we rolled into bankruptcy. It was just one thing after another."


City on the rebound: Detroit Riverfront Park

Even beyond the headlines, there was much work to be done to make  the Motor City a welcoming place for groups, starting with the convention center. As Bohde puts it, "Cobo Center was not in very good condition five years ago, and I'm being kind."

The center, however, now serves as a signpost of Detroit's dramatic reinvention. The city brought in SMG to manage Cobo and committed $279 million to renovate it. Although the project isn't yet complete, the quality of both the facilities and service has skyrocketed, says Bohde.

As of last month, Cvent was reporting a 48 percent year-over-year growth in the volume of requests for proposal in Detroit, and STR reported impressive year-over-year growth in the group segment (e.g., occupancy was up by 7.2 percent and average daily rate had climbed by 4.6 percent).

"In 2011, Detroit hosted four major citywide conventions," says Bohde. "In 2015, we're going to host 15." That includes the American Society of Association Executives' annual meeting this August. Group booking pace is up by 128 percent for the next six or seven years over the previous few years, Bohde notes.

Downtown renaissance. Significant updates to downtown Detroit have been a major factor in luring groups. The area is home not only to Cobo Center but also to 12 large hotels and the city's theater district, and when the new Red Wings arena is complete, the city will have three major sports franchise venues within a two-block radius. In addition, 71 new restaurants have opened up in downtown and midtown Detroit over the past year.

"It's all contributing to the vibrancy of the city," says Bohde, who adds that many visitors come expecting to see a boarded-up city, not a thriving scene with hip young chefs opening new restaurants. "We've come a long, long way since 2009."

Air access. Detroit Metropolitan Airport has been highly ranked in J.D. Powers' customer-service surveys in recent years, and it hosts enough traffic to make Detroit easily accessible. In addition to being a key Delta Airlines hub, the facility serves 24 countries daily. This month, Virgin Atlantic is launching direct daily flights to London Heathrow. While many second-tier cities are losing airlift, Detroit is gaining it.

Auto independence.
 Traditionally, Detroit's business has ebbed and flowed along with the automotive industry's. But this is no longer your traditional Detroit: Bohde estimates that just four of this year's 15 large conventions are tied to the cars in some fashion.

Still, the auto industry's recent successes have brought more meetings here, aside from those major conventions, adds Bohde, and he hopes the city won't struggle quite so much if the car business hits another slowdown. "We're a little bit more of a diverse destination now," he says.