Local hotels have seen a bounce-back with strong leisure travel demand this summer – but a much longer and tougher road to recovery lies ahead for meetings, conferences, and other group business, which has proven to be the biggest loss for many of the area’s largest hospitality properties. In fact, half of Traverse City Tourism’s entire sales team – previously dedicated to drawing large groups to the area – has been cut, while the remaining team members’ jobs have changed dramatically.

Matthew Bryant, general manager of Grand Traverse Resort and Spa, calls the impact of COVID-19 on the property’s group sales “devastating.” In a given fiscal year, the Resort relies on group bookings for about 60 percent of its business. The majority of that group business vanished from the 2020 calendar when the pandemic struck Michigan in March. According to Katie Leonard, the Resort’s national sales manager, the property “actualized about 25,000 room nights from groups” for the current fiscal year, “versus the 65,000 or 70,000 we were looking at.”

Other group-focused hotels in northern Michigan have suffered similar blows. Crystal Mountain Resort draws most of its winter business through skiing and most of its summer business through golf, but relies on large groups and conferences in the spring and fall – events that Director of Public Relations Sammie Lukaskiewicz says have largely been pushed to 2021 or 2022. In downtown Traverse City, the Park Place Hotel built a new conference center on its premises in 2018 to target more group business. 2020 was poised to be a big year for the venue – until COVID-19 came along.

“This would have been the third year for the new conference center and we were poised to have a record-breaking year – not only regarding group room night production, but in food and beverage revenues as well,” says Mark Fischer, the Park Place’s director of sales and marketing. “We have seen 80 percent of our group room nights wash out for 2020.” Fischer adds that group business – from weddings to private parties to corporate meetings – typically represent roughly a third of the hotel’s annual revenue.

There have been silver linings elsewhere. At the Park Place, Fischer says the hotel’s leisure and social business has seen a 15 percent year-over-year increase from 2019, despite the pandemic. At the Resort, meanwhile, Bryant says the golf courses have enjoyed their busiest and most lucrative summer season in property history. But reclaiming group business and the significant revenue it brings is a more difficult problem to solve.

“So long as there are restrictions as to how many people can gather inside, we're going to have a challenge here in northern Michigan,” says Trevor Tkach, president and CEO of Traverse City Tourism (TCT). “Right now, you might be able to get creative with outdoor venue space, but once it starts to get cold, once the seasons turn, the weather is forcing us indoors.”

TCT shed roughly half of its staff early on in the pandemic, including its vice president of sales and the majority of its sales division. Those positions were aimed at drawing business groups and other large bookings to the area. Now, thanks to a slashed budget and the reality of group size limitations, Tkach says TCT is pivoting its sales approach to one aimed more at providing direct support to the existing sales departments and event planners at properties like the Resort.

Those properties haven’t stopped selling, nor have they stopped planning for a potentially busy group business load in 2021 and 2022. While the Resort has lost 266 groups to date due to COVID-19, Leonard says that most of them are annual bookings that will theoretically be back next year.

She also expects to see meeting planners getting more creative in the future, in a push to get back to in-person events. Where many conferences have gone virtual for 2020 – including the Centers for Automotive Research Management Briefing Seminars (CAR MBS), an event that the Resort has hosted every August for decades – there is a move throughout the industry to embrace more “hybrid” events going forward. A hybrid conference would still have a physical component and would invite in-person guests, but would also give attendees the option to participate virtually, from a distance.

Bryant, Leonard, Fischer, Lukaskiewicz, and Tkach all agree that group business will eventually bounce back, citing the networking opportunities, scenery change, and in-the-room charm that can’t be replicated through Zoom calls or livestreams. They also agree the bounce-back will be gradual, with smaller bookings and fewer events across the calendar. Already, the Resort, Park Place, and Crystal Mountain have begun dipping their toes back into group business with smaller meetings.

Those events, Lukaskiewicz says, are providing good opportunities for the properties to practice new strategies – from different protocols for serving food and drink to event space layout changes that allow for social distancing.

Still, even if group business starts to come back in 2021, Tkach expects that fall 2020 could be a rocky period for local hotels. Autumn tends to be a slower time of year for leisure tourism, and without group bookings to fill in the gaps, things could be slow.

“Assuming we don't have another flare-up with the virus where we have to go into lockdown, the reality still will be that we won't have the conference business [in the fall], based on current rules,” Tkach tells The Ticker. “That group business is traditionally what fills the midweek part of fall. We get a lot of people coming up for harvest, a lot of people coming up to taste wine, a lot of people coming up to see colors in the fall, but they're doing it mostly on the weekends. We rely on that fall conference business to fill the weekdays, and that's going to leave a lot of rooms vacant mid-week, which makes it hard to fully staff a hotel and to keep people fully employed. For some businesses, it's going to be hard for them to generate enough revenues to turn a profit.”