NASHVILLE, Tennessee — The shift from group demand being a driver of growth for hotels to an area of softness has been difficult for hoteliers to navigate this year as leisure demand also weakened, and experts say companies and properties must shift their strategies along with different group booking behaviors.
The booking window for group business has shrunk to the point where it's "uncomfortably short," said Sonny Kerstiens, vice president of sales for Aspen Hospitality.
"And like everybody, we've seen this inaction or pause, so to speak, in decision-making for the group segment," he said during the "Stay on beat with group business" session at the 2025 Hotel Data Conference.
Tony Steele, director of revenue management for Hilton Sandestin Beach Golf Resort and Spa, agreed with that assessment of the market, but added a drop in bookings hasn't been mirrored by a drop in inquiries.
"Group demand didn't just change; it's really kind of evolved," he said. "We're not just managing more [requests for proposals], but they're navigating higher expectations with tighter timelines."
Barbara Purvis, president of Essex Hotel Management, said who is booking group business at hotels has also changed.
"We're seeing that with the decision-makers, there's been a lot of movement there," she said. "So the relationships aren't the same. We're seeing a lot of the guests being less brand loyal and very brand agnostic. So, some of the things that used to work before, like providing additional points or moving someone up to a different [loyalty tier], are not necessarily working like they did before."
So how do hoteliers properly react to this wave of changes? Panelists said more efficient use of technology and more seamless cooperation between sales and revenue strategy will help significantly.
"A lot of group decisions are made in a silo," said Craig Shoffit, senior area sales manager for IDeaS Revenue Solutions.
The evolution of artificial intelligence and better systems across the hotel industry should hopefully provide better insights for getting the best groups on the books, but a human touch will always be required in decision-making, he added.
"Technology [can help with] guiding and giving those decisions and showing the profitability versus just total revenue," he said.
Purvis said hoteliers also need to be enterprising when it comes to finding new groups then incorporating the operations teams to make sure their unique needs are being met.
"For sports teams, we may be offering to take some of the meetings space and put in some gaming or a pool table, but for weddings business, we're maintaining relationships with all the local golf clubs and private clubs," she said. "It's just looking at each particular segment and how we can position our hotel to be the best fit and maintain those relationships."
There's been some evolution of expectations for wedding demand, specifically over the past two years and that's had an inverse correlation with a post-pandemic spike in demand, Kerstiens said.
"For like two years, we were incredibly selective, and we could be," he said. "Now, it's not that way. So we're really making sure we're rebuilding that brand awareness in that space and we're working with vendors and partners that can help enhance the programming activation."
The change in group behaviors that started five years ago has only accelerated in the last 18 months, and Shoffit said more hotels are embracing SMERF — social, military, educational, religious and fraternal — demand.
"You've got to look at them like a corporate group you would have five years ago," he said. "Why not offer a multiyear deal if your city is putting out incentives for things like cheer competitions [or] soccer tournaments. In this segment before, we didn't really see a lot of repeat business, but now it is."