Meeting Planners to be Tested by Boom in Hotels w/o F&B

The latest news out of PricewaterhouseCoopers, based on data from Smith Travel Research, is that growth in the U.S. hotel market will be led by both the upscale segment and the mid-scale without food and beverage segment.

The mid-scale without F&B brands are hitting their stride because they "were most easily introduced in suburban markets, where there was a benefit of low land cost. It took awhile to get established and be able to move into urban markets," explained Bjorn Hanson, principal of PwC's hospitality and leisure group.

They are now thriving in those urban markets, based in large part on area economics, which support reasonably priced properties without an F&B component. According to Hanson, New York City has seen tremendous development in the mid-scale without F&B market in the past five years, versus virtually none in the mid-scale with F&B market.

Smith Travel Research defines mid-scale without F&B as properties that don't control any dining outlet on site. A hotel with a Starbucks Coffee in the lobby could be considered as one without F&B, as could a property with a vendor that serves a hot breakfast. Brands in the segment include AmeriHost, Comfort Suites, Hampton Inn, and La Quinta Inns and Suites.

In the upscale segment, Hanson credits innovative amenities with helping to strengthen the market. "Many of the upscale brands have moved further upscale," he said, offering services like a complimentary evening wine tasting with hors d'oeuvres. "The evening receptions are often really a dinner service," Hanson said, which makes the property a better value and appeals particularly to Generation X travelers, who tend to be more social than Baby Boomers. "Boomers generally have a more formal dinner or order room service," explained Hanson. "Gen Xers say, 'Why don't we meet in the lobby and figure out where to go from there?' "

Unfortunately, though, none of this is good news for meeting planners who handle large meetings. "Most of the development has been and continues to be for those properties that don't accommodate mid-size and large groups," said Hanson. "We're seeing under-representation in the construction pipeline for hotels that cater to convention and meeting groups, which continues to have both pricing and availability challenges for meeting planners."

For ideas, tips, and tools for better meetings and events, get MeetingNews' weekly e-newsletter to your inbox.