How can hotels attract corporate clients in a post-pandemic world, and what is the future for events and conferences? Ben Walker discovers what services and processes business travellers are looking for.
During the pandemic, the UK's largest venues became hospitals and vaccination centres. Now, once again, they are turning back into event and conference centres.
The temporary hospital inside the SEC Centre in Glasgow closed at the end of March and the venue is scheduled to host its first events again in August. At London's Excel centre, business events are programmed to resume from 22 June onwards.
Although uncertainty remains over when a full easing of Covid restrictions will be possible, these are important and welcome signs that economic life is returning to something akin to normal. For the hospitality industry, business travel and corporate demand are returning.
"There has been this big focus on leisure, when actually it's not just about leisure," says Karelle Lamouche , Accor's chief commercial officer for Northern Europe. "Obviously leisure comes first, but that's because we are heading into the key leisure months of July and August. By definition, in 2019 we would have seen the same influx of leisure bookings."
Performance data from global hotel brands shows that corporate demand is well on its way to recovering elsewhere in the world, and the UK is expected to follow suit from September onwards. IHG Hotels & Resorts noted improved demand in the US and China during the first three months of 2021 and Marriott International has reported some North American group bookings for 2022 secured at 6% to 10% higher rates than similar bookings made in 2019.
"In Russia we reopened the full spectrum of corporate client events three months ago," adds Lamouche. "China is back to business. Australia is the same. In these territories we are already seeing corporate and GDS [global distribution system] bookings at 40% to 60% of what they were in 2019."
Looking at forward bookings in the UK, hotel data provider STR says that group bookings are rising in the second half of 2021, reflecting growing confidence from businesses and event planners in a Covid-19-safe future. Andrew Secker is group director of sales at RBH, an operator with 45 branded and private label hotels across the UK, 32 of which stayed open during lockdowns to accommodate key workers.
He underlines that business travel never came to a complete standstill and there are now signs that it is increasing: "We've focused on winning business travellers from industries that cannot work from home; construction, rail, filming and elite sports have all been key. We've also provided accommodation for key workers and government sector business and continue to support the national services across our portfolio.
We've focused on winning business travellers from industries that cannot work from home; construction, rail, filming and elite sports have all been key
"We are now seeing some encouraging signs of corporate clients returning, although largely UK domestic and predominantly in the utilities and energy sectors."
Conferences and events post-Covid
At the Novotel London West in Hammersmith, there are encouraging signs too. The hotel will continue to act as a vaccination centre into September, but with 5,500 sq m of meeting space available, forward bookings are stacking up nicely.
"Our main room is already fully booked for September," says general manager Michael Sloan. "I'm touching wood, but September, October and November are looking quite strong. There's a lot of pent-up demand for face-to-face meetings. Because Olympia [a nearby exhibition centre] is closed, we're getting a lot of enquiries for smaller exhibitions. And new for us, we're getting enquiries for award evenings, which we used to do a great deal of but not nearly as much in the last five years."
The size of events on the books at the 630-bedroom hotel range from small meetings of 20 day delegates to conferences that would normally host up to 700 people, which are being reduced to around 350 due to social distancing measures. Awards nights are down from 1,200 to 600.
"You have to cost accordingly, but it's better than not having anything, which is what the hotel's been doing for the past year," says Sloan, adding that meetings, incentives, conferencing and exhibitions (MICE) bookings for 2022 are looking "very strong."
You have to cost accordingly but it's better than not having anything, which is what the hotel's been doing for the past year
A whole calendar of events is scheduled to go ahead after 21 June. SPE Offshore Europe, an oil and gas conference in Aberdeen, is happening in September. The same event in 2019 attracted 38,000 visitors. Meanwhile, in London, the Cateys, the hospitality industry's premier awards night, returns to Grosvenor House, a JW Marriott hotel, on 7 September.
A recent survey of event planners by Northstar Meetings Group UK found that more than half expect facemasks to be a requirement at their next event. One-third expected attendees to require proof of a recent negative Covid test, while a quarter were expecting to conduct rapid tests at the venue. Just over a quarter said that proof of vaccination would be required to attend their event.
How events in hotels are bouncing back
Two government-backed meetings are worth a special mention. Firstly, DSEI is a major international defence and security event that connects governments, national armed forces and industry leaders. The event, which attracted 36,000 visitors and 1,700 exhibitors in 2019, is scheduled to take place at Excel in mid-September, providing a boost for hoteliers in the east London area. The fact that DSEI is happening as a physical event at a relatively early date represents "a very strong signal from the government," reckons Lamouche.
The second, and arguably the most important international event of the year, is the UN Climate Change Conference (COP26), taking place in Glasgow in November. The UK government is financing and organising the summit, originally expected to attract 30,000 people over 12 days.
In late May, the government reiterated its commitment to making sure the UN climate talks go ahead as a physical event, estimated to cost "several hundred million pounds". Glasgow's occupancy on the books for the event period sits between 84% and 89% according to STR.
Even five months out, Calum Ross, general manager of the 319-bedroom Glasgow Hilton, says he has already had three meetings with the police in connection with the summit.
"I think there will be 30 heads of state in Glasgow and that's why the police are coming to the hotel. It's a standard process: moving around the hotel, letting the officers assess potential threats, getting their heads around what they'll need. It's a big operation. All the staff will have to be screened and we'll have airport-style security coming in and out of the hotel," he says.
The fact that Ross has already been paid the first 25% deposit for the COP26 bookings is another indication that things are on course. "COP26 is the biggest event that Scotland will have ever hosted – an event of global significance. It's a fantastic opportunity to show how well Glasgow can cope with major events," he says.
In addition to the prospect of COP26, Ross has other reasons to be cheerful. Four UEFA Euros football matches are taking place at Glasgow's Hampden Park during June and his hotel will be busy hosting teams and their entourages.
He is also happy to report that Hilton, which owns the leasehold, is investing in a complete upgrade of the property. "We're adding some bedrooms and we've finished our ballroom development, which is game-changing in terms of technology and lighting. Getting it completely refurbished at a time when we couldn't have guests has been a great thing because it would be very disruptive under normal circumstances. We're updating our whole product offer," he says.
This includes an upgrade of Hilton's in-room smart technology in 2022. Ross explains: "There's a lot of new supply coming into Glasgow, so we have to keep up with the quality and continue to innovate. If anything, we'll end up focusing even more on MICE markets."
Hygiene for corporate business travellers
To attract and reassure corporate business, cleanliness and safety protocols will remain crucial. Lamouche says: "Even once they have been vaccinated, the company is the guarantor of the health and safety of its travelling staff."
Early in the pandemic the major hotel brands escalated their hygiene and safety protocols and announced collaborations with external experts. Marriott established its ‘Global Cleanliness Council' and introduced electrostatic sprayers and hospital-grade disinfectants. Hilton teamed up with Reckitt, the maker of Lysol and Dettol products, and Accor with Bureau Veritas, a testing and inspection specialist.
Some of the brands have also gone a step further and provided medical services. Accor has a global partnership with AXA Insurance, whereby any guest or employee with health concerns can call and speak to a doctor.
Lamouche explains: "It's about reassurance. We've extended the partnership now to providing information to any traveller on where the nearest PCR lab is to the hotel. We are doing everything we can to reassure the corporates on our safety protocols and anticipating all of the hurdles that could come from this pandemic."
Other services that will remain important for welcoming back business travellers are contactless service and straight-to-the-door check-in, day passes for co-working and office facilities; and hybrid physical and digital meetings, which will remain an important offer even after Covid (see panel).
Each positive government announcement results in a spike in bookings of around 60% compared to the previous week, says Lamouche. The return of business travel is assured although, compared to leisure demand, corporate bookings are more risk-averse.
Ross says: "We've got significant amounts of business sitting in prospect and that's simply because even though we've given them all the assurances and all the flexibility you could ever achieve in a contract, people are reluctant to sign the contracts. People are looking for more certainty. I'm sure they will sign. Most of these clients we know, because they're repeat clients."
Secker at RBH adds that compared to a strong third quarter driven by leisure travel, the final quarter of 2021 remains less certain: "London in particular is heavily reliant on the return of international travel. However it's encouraging to see enquiry levels accelerating across the group, including London. The pre-opening team at the new Westin London City are already taking a wide variety of enquiries, from residential meetings to family celebrations."
He concludes: "The message from business clients is they are keen to return, but the level and speed at which they all do will be key to our recovery."
What the post-Covid business traveller wants
The rise in cases of the Delta variant, first identified in India, means that an easing of all Covid-related restrictions from 21 June is far from certain. During this transitional period, the message that hoteliers are putting out loud and clear must be that cleanliness, safety and sanitation remain their top priorities. In order for companies to let their employees back out on the road, such reassurances are essential.
Prior to the pandemic, contactless services were favoured mostly by young travellers. Now, for health and safety reasons, there is a growing demand for automation across all demographic groups. For business travellers, straight-to-the-door check-in and contactless ordering apps are welcome time-savers. The major hotel brands are encouraging their franchisees to roll out automation capabilities. The sudden fall in revenue caused by the pandemic means hotels need to deliver efficiencies often with fewer staff, making automation even more attractive.
Hybrid combinations of digital and physical meetings are expected to remain popular long after Covid. Research by Accor showed that 70% of meeting and events planners saw hybrid meetings as an important service. All Connect, Accor's hybrid meetings offer, for instance, allows physical in-hotel meetings and virtual interactions in multiple locations simultaneously and is powered by Microsoft Teams. Of all Accor hotels, 55% can deliver All Connect now, with 100% expected by 2022.
The remote working trend is not going to disappear so there will still be demand for hotels that supply co-working spaces and working-from-home facilities. During the pandemic, brands including Hilton, Marriott, Hyatt and Mandarin Oriental have sold various day passes for home workers and parents with young children that include supervised activities for the kids, and office and leisure facilities for the adults. With the trend for only two or three days in the office per week set to continue, such services will remain in demand.
Photo: Dabarti CGI/Shutterstock.com
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