The world's hotels need events and meetings to return, likely before a coronavirus vaccine is released, in order to survive financially. Boston's rebound plan is a solution with global implications.
Boston travel organizations know they have a giant thorn from their past to overcome for state officials to green light a plan to once again allow the private events and meetings the state’s largest hotels need in order to survive.
A Biogen conference at the Boston Marriott Long Wharf hotel in late February has been labeled an early coronavirus superspreader event — tied to cases both in Massachusetts as well as across the U.S. and Europe when attendees returned home. Massachusetts, one of the hardest hit in the U.S. during the coronavirus pandemic, eventually went into one of the toughest state-mandated lockdowns in the U.S. and has since seen its new case count plummet while other regions see their confirmed cases soar.
Massachusetts entered the third phase of its economic reopening this week, enabling indoor dining and many tourist attractions to reopen. But Gov. Charlie Baker’s administration has capped indoor event capacity to 25 people, well below the range hotels need in order to make money.
The state’s travel leaders’ pitch to once again allow indoor events could set a precedent for the hoteliers in hard-hit areas around the world.
“Many of these hotels can’t open until they can host meetings. They can’t sustain themselves on the current market mix of small corporate travel and leisure business,” said Martha Sheridan, president of the Greater Boston Convention & Visitors Bureau. “To reopen, they’d need assurances they can host larger groups than 25 people.”
Sheridan along with the leaders of businesses and organizations like the Massachusetts Health Council, the Cambridge Office for Tourism, and five of Boston’s convention hotels — including three Marriott-affiliated properties — submitted a request to the Baker administration to allow bigger events to happen across the state. But these events would look a lot different than the impacted Biogen conference from earlier this year.
Tourism officials want to initially start with meetings and events capped at 100 people in the initial return to business before eventually growing to a 250-person maximum in a later point in the current reopening phase.
Events would respect six-foot social distancing, utilize technology to reduce close interactions, and abide by coronavirus guidelines outlined by the World Health Organization, Centers for Disease Control and Prevention, state government, as well as the individual hotel companies.
“We are working with the hotel community here, and they are committed to doing what’s right and safe for their employees and guests,” Sheridan said. “They by no means want to put anyone in a situation where there’s a risk of infection or outbreak.”
The convention leader acknowledged there is obviously a high hurdle to overcome in convincing the public it is once again safe to attend a meeting or event at a hotel, given the Biogen conference. While political leaders haven’t brought up the Biogen conference as a potential reason to block events and meetings from happening, Sheridan said it does come up more in public discussions.
But she emphasized hoteliers, like the rest of the world, have learned a lot since February and responded with entirely new health and safety protocols.
“Some questioned whether the Long Wharf should be able to reopen. Is any place where an infection occurred not able to reopen? That’d be thousands of businesses,” Sheridan said. “Every hotel in the city is committed to following appropriate protocols and standards.”
Marriott declined to comment specifically for this story and directed Skift’s questions to Boston’s visitors bureau.
A Blocked Recovery
Drive-to and leisure travel sparked the hotel industry’s initial recovery from record-low occupancy rates seen earlier this year, but analysts and executives acknowledge there is a threat of a recovery plateau until group business and convention travel returns.
Group business travel accounted for 51 percent of room nights at convention hotels and 40 percent at resort hotels in 2019, according to CBRE. Group business travel generally hovered between 22 and 24 percent of overall U.S. hotel occupancy between 2012 and 2019, according to STR.
“Room revenue is only part of the story,” Nathan Seitzman, a partner in McKinsey & Co.’s travel practice, told Skift last month. “Group business drives hotel profitability as a source of food and beverage revenue and high occupancy nights, and because it typically books further in advance it will inform everything from marketing strategy to revenue management. So even when business and leisure transient travel fully recover, a lagging group recovery could have a disproportionate impact on hotel profitability.”
Boston, normally a top-performing hotel market, faces a particularly tough road to recovery.
Hotels were only allowed to reopen to non-essential travel last month following nearly three months of shutdowns. Most of the city’s convention hotels remain closed due to current demand levels not justifying reopening. While the average occupancy rate in Panama City, Florida, hit nearly 89 percent the week of June 20, it barely surpassed 26 percent in Boston, according to STR.
Midweek occupancy in Boston is now in the 30 percent range — a sign some business demand is returning, Sheridan said. But hotels still need meetings and events to survive.
Not Your Typical Event
Sheridan recognizes there may be local fear in hosting events that attract visitors from growing coronavirus hot spots like Florida and Texas. But the GBCVB isn’t planning on major, city-wide events until at least next year.
Instead, the organization plans to focus on smaller meetings and events that would attract visitors from northeastern U.S. states, seven of which the Baker administration has exempted from a 14-day quarantine advisory placed on arriving visitors from the rest of the country.
“We will be strategic in our approach to luring meetings,” Sheridan said. “We certainly don’t see international meetings in the near-future, and national meetings are a long way out as well.”
Many companies have put a freeze on in-person meetings until health conditions improve or there is a widely available treatment or vaccines. But that hasn’t stopped hotel companies like Accor from rolling out their own plans to show they can safely host a small event before a medical breakthrough.
Several companies have expressed interest in hosting meetings in Boston ahead of a vaccine rollout, Sheridan said while declining to give specific names.
But Massachusetts travel organizations need Baker’s approval the most. The Massachusetts governor’s press office did not respond to Skift’s request for comment in time for publication.
“They do not show their hand. For me, they’ve been good to work, with but they hold their cards close to the vest. Their mantra is ‘data not dates,’ and I respect that,” Sheridan said. “The good news is the data is trending in the right direction.”
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Photo credit: A Boston conference tied to coronavirus cases around the world isn't deterring travel groups in their push to once again host indoor meetings. usmc0491 / Pixabay