The year ahead is one of many mixed signals. On one hand, the hospitality industry has experienced a huge rebound from pandemic lows—led first by the pent-up demand of leisure travelers ready to get out and see the world, followed by a substantial return to business and corporate event travel as companies invested in getting their people back on the road and in-person events came back to the forefront. 

On the other hand, threats of a recession that could scare off the consumer and trim corporate travel budgets suggest that 2022 may be a difficult year to follow. While this complex environment could cause disruption, we are seeing the opposite—it is restoring balance to a more productive equilibrium between hoteliers and businesses. The most heavily pronounced common thread between these two sides of the equation is a prioritization of certainty.

Bringing Certainty to an Uncertain Environment

Heading into 2023, we are seeing a huge emphasis from hotels needing buyers to commit, and buyers needing suppliers to reliably deliver. “Certainty” is the buzzword of the day, and it is bringing a new kind of attention and dynamic to group business conversations. 

On the supplier side, hoteliers are keen to lock in meeting and event business to mitigate economic uncertainty that could bring sudden pressure to leisure and transient business travel—a trend being referred to as “group up”—even if it means trading away potential premiums.

For companies, the renewed interest in group business sets up the coming year from one where commitment will translate to leverage after months of having none. And buyer expectations go much deeper than pricing; there is real pressure on the venue to deliver a greater ROE—or return on experience—because supporting group business has higher stakes and requires greater sophistication compared to leisure and transient. 

The key uncertainty that will remain is hospitality staffing. Hotels have made significant progress against crippling staffing shortages through a combination of hiring and automation, but hiring and retention challenges remain as the labor market remains extremely competitive. This will continue to put a premium on how hoteliers leverage seasoned employees to meet those ROE expectations. On the buyers’ side, the situation is a little better but there has still been an influx of new meeting managers and planners in the past couple of years. 

Restoration of balance—paired with an influx of new planners and hoteliers—is prompting a renewed focus on rebuilding partner and supplier relationships. New relationships need to be formed, starting from where to have the event, to designing the space, to blocking and reserving rooms, to running the event. This effort to build relationships will help bring certainty and sanity. The spontaneity of the recent past has been exhausting and led to mixed results rather than absolute success. The more normalized meeting and event ecosystem expected in 2023 will mean sticking to budgets and pairing back improvisation. 

Hybrid Versus In-Person Only

There’s no doubt that virtual, hybrid and in-person events are all here to stay as part of the event planner playbook. For hoteliers, it’s no longer enough to be proficient in only in-person events. Both hybrid and in-person formats are important, and hoteliers will need the staff, space, technologies and partnerships to carry out both effectively. While there are predictions that in-person events could get back to 2019 peaks this year, the benefits of hybrid should not be overlooked—especially with potential budgetary pressures that come with concerns of a slowing economy.

The good news is that planning and executing highly successful live events and those that blend in-person and virtual attendees is getting easier. The technology has come a long way in a very short time and now bakes in all components—from searching venues that can accommodate various in-person and technical needs, to specific items like attendee registration. With so much virtual fatigue, everyone knows that audiences aren’t going to accept a webcast tacked onto an in-person event as an equal event experience moving forward, so 2023 will require an out-of-the-box approach for hoteliers to give planners the hybrid experience they want while creating deeper value for both the hotel and the in-person audience. Hoteliers have new opportunities to be visible to planners and streamline planner-hotel relationships, making it easier to generate a return on recent investments. With CFOs more attentive to travel and meeting spend, showcasing this value will be critical, regardless of the event type.

Keep in mind that the combination of both a highly engaged in-person audience and a broad virtual audience, make hybrid events an attractive way for planners to create value and expand reach. This will equate to a higher degree of certainty that the time, effort and dollars put towards these events are worthwhile. 

Internal Events Step into the Spotlight

While many employees are going back to the office, flexible working is here to stay. Although recession concerns might put a damper on some in-person team events, many companies appreciate that there’s an even greater need for face-to-face internal events that facilitate product development, training and onboarding, and relationship building than ever before. As companies and teams continue to seek out live engagement opportunities to increase collaboration, there will be some blurring of transient and group travel. This will be represented by more “rooms only events” built around in-office employee gatherings rather than these guests meeting at the hotel. On the bright side this is a great opportunity for F&B for hotels that have great restaurants and bars to cater to guests traveling for internal events at the company office. 

In summary, watch this focus on certainty, maturing of hybrid events, and the emphasis on internal meetings to be leading trends as we see balance return to the meeting and event ecosystem in the year ahead.