BY THE FOURTH quarter of last year, group business in 10 of the top markets in the U.S. had recovered 110 percent compared to the same time in 2019, according to the Hospitality Group and Business Performance Index from Knowland and Amadeus. The top 20 markets have achieved 100 percent of 2019 levels of occupancy and ADR, with 10 surpassing 110 percent or more.
Group business reached the 110 percent health index in the fourth quarter because it used 95.5 percent of the group rooms sold in 2019, coupled with a 14.8 percent increase in ADR, according to the index. Overall growth for the year 2023 stood at 103 percent, with 92.5 percent of group rooms sold in 2019 and an accompanying average rate increase of 11.7 percent.
Meetings and event business rebounded to 91.9 percent in the fourth quarter compared to 2019, with an end-of-year recovery rate of 91.2 percent. The volume of smaller groups led to stability in the market, according to Knowland. Currently, 70 percent of events have 200 attendees or less and smaller meetings, those with less than 25 attendees, saw the most growth, experiencing a 19 percent increase since 2019.
Cities at 110 percent recovery include:
- Las Vegas: 144.1 percent
- Phoenix: 123.9 percent
- San Diego: 122.5 percent
- Tampa: 121.3 percent
- Boston: 120.3 percent
- Austin: 116.6 percent
- Miami: 115.4 percent
- San Antonio: 112 percent
- Seattle: 110.9 percent
- Los Angeles: 110 percent
Other insights from the index are:
- Corporate groups remain the primary driver of meeting and event volume: The increased percentage of events in the corporate segment bodes well for business travel. In 2023, corporate segment events constituted a larger share than in previous years, accounting for 63.9 percent of event days in the fourth quarter. For the entire year of 2023, this figure was 58.4 percent, compared to 57.3 percent in 2019.
- The negotiated rate index strengthened in the fourth quarter, surpassing all previous quarters in 2023: The index achieved a health index of 90.2 percent, reflecting the consumption of 84 percent of the negotiated rooms sold in 2019, accompanied by an increase in the average rate by 7.3 percent.
- Segments normalize across the board: The overall health index for the fourth quarter is 94.5 percent, with group, negotiated and events stabilizing at 90 percent or more compared to 2019.
The Index combines event data from Knowland with hotel booking data from Amadeus' Demand360+, providing individual and aggregate views of drivers of hotel performance, and is updated quarterly.
Knowland's recent study revealed San Diego leading year-over-year growth in December meeting volume with a 29.2 percent increase, closely trailed by San Francisco at 21.5 percent, signaling a positive rebound in these pivotal event markets. San Diego witnessed a doubling of healthcare events, while pharmaceutical/biotechnology events nearly tripled from the previous year.
