We are managing events planned for every month through end of this year. The year of COVID-19. And although we anticipate smaller attendance at these events, we do expect these events to happen especially those August-December. We are seeing a ton of flexibility from our hotel partners and for that we are very grateful. That is not to say event organizers don't need to stand their ground, but in the end relationships are winning in these discussions on Force majeure vs. cancellation, attrition, rental and F&B costs, etc.
Room rates so far have been off limits though, nobody wants to re-negotiate room rates, and I completely understand why a hotel or meeting planner who makes commission on rooms does not want to reduce rates, but let's be real, rates are based on demand. So in the short term next 90 days, expect flex in room rates, expect us to ask for lower rate clauses, but after that we see room rates and airline rates for that matter to surge based limited capacity and a returning demand.
We are also seeing the need for more space. Groups need more space because they need to spread out the tables and chairs, not to mention a tent to feed. If you have a tent company, get ready to boom if you haven't felt it already. So if you had space for a 50 person event, now you need space for 150. We are also seeing big demand in the 4th quarter of this year and first quarter of next. Which shouldn't surprise anybody since most people who had events planned March-June just pushed to later dates, what we call the "lift and shift" and that pushed things into Q3 and Q4. The first quarter is typically "meeting season" especially in the SE resort market so demand is always highest in Q1 of every year.
When I speak to colleagues around the country, I am amazed by the very different vibes I am getting depending on where their hotel is located. People in Florida are much more confident, say then those in California. But even in Florida sediment varies, for example our Orlando my hotel partners are feeling better than our Miami partners because Broward and Dade are still locked down including the beaches. Arizona which has very few new cases and deaths of late, is still on lock down to my understanding and this week in my discussions with many of them were not sounding very optimistic. I believe much of this can be attributed to the information bias in their news feed because cases and deaths are down across the board. I am also seeing this varied confidence reflected in room rates around the country. For example, in Houston for later this year 2020, I am seeing strong rates and aggressive F&B mins, but in NYC, Vegas and Miami, much greater flexibility.
Interestingly enough, a few NYC hotels are becoming bullish in 2021 real quick. It's almost like they have thrown in the towel on 2020, and understandably so, but have put everything into the belief that 2021 is rebound city. I think they are right. 2021 which, for years, was a bad year on the books for large conventions in the USA. Maybe it was bad luck in the rotation, or the fact 2020 is an election year. It happens every few years regardless, where a future year looks bad. For many years 2021 was that year, but because of the 2020 virus kerfuffle, everything is being pushed to 2021. My gut feeling is this virus will depart as fast as it arrived, making 2021 a banner year in the USA.
Stay strong, stay positive and be cool!
Bryan Bruce
bbruce@hpnglobal.com
407-385-9597
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