Group Segment Shows Rare Growth for Hotels

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A study released last December by New York City-based PricewaterhouseCoopers found that when comparing 2002 to pre-2001, levels of demand, revenue and profits all have grown in one particular sector: meetings and conventions.

Before 2001, for example, hotels earned 20 percent of their profits from the meetings business. This percentage rose to 27 percent in 2002. Similarly, revenue generated from groups accounted for 18 percent of profits before 2001, while in 2002, groups accounted for 23 percent of revenue.This trend is especially significant in major draw cities such as New Orleans, where visitors associated with meetings last year accounted for 59 percent of the demand for hotel rooms and 63 percent of hotel room revenue.

Even in New York City, where the influx of transient visitors historically is high, the percentage of hotel rooms booked for meetings and the share of revenue that those rooms commanded is significant to the tune of 25 percent and 24 percent, respectively. The importance of group rate premiums over ordinary transient rates points to the increasing value of the meetings and conventions business to hotels.

PricewaterhouseCoopers believes the balance of power will further shift to the buyer through the current year. As hotels continue to attempt to maximize revenue in every department, the value of the meetings business is only expected to grow.

That leverage could translate into better deals for meeting planners, as hotels try to woo their business. That, in turn, might mean an easier time for the many planners whose budgets have been trimmed.

While the group market is a bright spot, the cloud over the hotel industry remains dark. According to the study, occupancy in 2002 was at its lowest in 31 years.

By Art Pfenning, corporate research director for NORTHSTAR Travel Media, LLC, M&C’s parent company.

What Association Executives Earn The gender gap in earnings grows in relation to size of organization, according to a 2001 compensation survey. Male CEOs Female CEOs Trade association $136,775 $92,125 Individual membership association $139,241 $85,204 Total staff size: 2 or fewer $75,000 $60,000 3 to 5 $95,640 $77,000 6 to 10 $116,550 $108,000 11 to 20 $138,200 $126,000 21 to 50 $201,923 $159,280 51 to 100 $237,900 $145,518 More than 100 $287,600 $249,233 Total annual budget: $300,000 or less $67,600 $54,789 $300,001 to $500,000 $75,600 $68,579 $500,001 to $750,000 $90,000 $72,800 $750,001 to $1 million $102,000 $87,525 $1,000,001 to $2.5 million $118,800 $112,425 $2,500,001 to $5 million $170,000 $137,100 $5,000,001 to $10 million $227,750 $160,585 $10,000,001 to $15 million $225,994 $171,750 More than $15 million $285,000 $256,269 Source: American Society of Association Executives