RFP: Request for the Possible
Deals and deadlines. Bargains and bids. Sometimes it can feel like you’re a show pony being asked to jump big hurdles blind. That’s why it pays to know the trends of the travel market so your inner stallion can race free.
At a recent Lunch and Learn hosted by MGM Resorts in Salt Lake City, Michael Dominguez shared some industry statistics gleaned from STR Global and CRBE Hotels’ Horizon®️ Forecast that impact RFP (Request For Proposal) acceptance. Check out this data and find out what it could mean for your next incentive trip or business conference.
2017 was a banner year in the hospitality industry, and there are no signs things are slowing down. Hotels have reported record numbers in all the major categories. Occupancy, Average Daily Rate, RevPAR (revenue per available room), and Room Revenue are all at all-time highs. Only one region in the world is not reporting this type of growth—the Middle East. This is due to two factors: 1) Lots of new hotel product has come online in recent years, driving more supply than demand. 2) The continued instability of the Middle East makes it a less desirable travel destination. All other regions of the world are seeing record numbers, sustained for the past 6+ years.
These numbers are even stronger in the luxury hotel category where most incentives and upscale meetings are held. In the US, luxury hotels have a long-run average of 69.8% occupancy. The occupancy for 2017 was 74% and is expected to reach 75.4% in 2019. The issue with luxury hotels is that the demand is outpacing the supply. We are seeing record numbers of new hotels being built, but 73% of the new hotels coming online in the US are in the limited service categories. The new hotel builds coming online are also lacking the meeting space to accommodate the growing number of conferences and meetings needed. Get this, only 11 new hotels with 50,000+ square feet of meeting space have come online in the last six years. In the meeting industry, meetings of 1000+ attendees are the fastest growing segment of meetings held. In 2013, 32% of meetings held were of 1000+ attendees. In just two years this grew to 37%. These growing large meetings need “big box” solutions with large-scale meeting space, and the construction of these larger conference hotels is not keeping up with demand.