Come Together, Right Now: Local hotels eager to restart their conference and event business
Grand Traverse Resort and Spa sold out its nearly 600 rooms every weekend during the summer of 2020 – and even well into the fall, with strong leisure travel figures carrying through mid-October. It still wasn’t enough to make up for the business the hotel lost due to cancelled conferences and events.
That’s a common refrain across the local tourism and hospitality industry, which somewhat unexpectedly boomed with business all last summer. While Traverse City’s status as a leisure travel getaway has proved to be relatively immune to the coronavirus, though, the same can’t be said for group bookings.
Conferences, conventions, meetings, and other bulk group bookings are the hidden engine behind Traverse City’s status as a robust tourism town. While festivals, beaches, breweries, wineries, ski resorts, and beautiful weather drive the area’s hospitality economy in the summers and on weekends, it’s a different story in the late fall, winter, and early spring – especially during the Monday through Thursday stretch.
“We know [group business] has been a lot of the growth that we’ve seen over the past 10 years, if not longer,” said Trevor Tkach, president and CEO of Traverse City Tourism (TCT). “We’re always trying to solve the shoulder season equation. We [at TCT] have put a lot of time and resources into finding ways to encourage people to visit in the in the spring and in the fall. Conferences have been a huge part of that.”
At Grand Traverse Resort, conferences and group bookings typically make up roughly 60-70 percent of the property’s annual business. And while leisure travel quickly bounced back after spring 2020 closures and restrictions, the same hasn’t been true for events that bring big room-block bookings. That side of the business has taken a massive hit that, according to Director of Sales Katie Leonard, has now impacted two fiscal years.
“Unfortunately for us – since our fiscal year is October through October – our 2021 fiscal year is actually turning out to be worse than our 2020,” Leonard explained. “And that’s because we were able to actualize quite a bit [of group business] before COVID hit. So in 2020, our group business ended up about 60 percent behind a normal year, because we were able got get quite a few conferences in before March when the pandemic hit us. We’re forecasting to be about 77 percent behind for 2021.”
Other local properties have taken hits too. In 2018, the Park Place Hotel built a new state-of-the-art 16,000 square-foot conference center. In addition to updating the hotel’s conference infrastructure significantly, the project also increased the Park Place’s group event capacity by 60-70 percent. The 7,800 square-foot main conference room, in particular, was meant for big groups, with space to accommodate some 1,600 guests standing and 500 seated at tables. The conference center opened June 1, 2018 – which means that, for more than half its life, the space has hardly been used.
“She never really got a day on the sun,” lamented Ryan Buck, director of sales for the Park Place. “The timing was definitely unfortunate for us.”
Historically, about one-third of the Park Place’s annual revenues have come from group bookings in its conference space – ranging from corporate meetings to weddings. Most of that business has been lost since the start of the pandemic.
The good news is that the conference industry seems to be showing signs of life. Buck said “the phones are ringing and the days are busy” with inquiries from groups interested in booking events at the Park Place. Leonard noted that “the number of RFPs (requests for proposals) coming in has significantly increased in the last few months.” Judy Booth, vice president of sales for Boyne Mountain, Boyne Highlands, and the Inn at Bay Harbor, said the properties “have quite a few people that are still holding out for late summer or early fall meetings” this year.
Collectively, local hotel sales directors are seeing the same writing on the wall: As vaccination rates rise and COVID numbers fall, people are more than ready to get back to face-to-face conferences and events.
“I know there were always questions out there about whether or not face-to-face conferences would go away,” Booth said, recalling pre-pandemic conversations about the strain of business travel and the potential ease and convenience of virtual conferences. “COVID made us understand why they can’t go away. It’s been a real awakening about why we need face-to-face meetings. We need that interaction, we need that networking, we need that relationship development. We crave it and we miss it.”
As for how quickly northern Michigan’s group events engine might rev up again, no one in the industry is quite ready to give a concrete answer. Tracey Ramsey, director of sales for Shanty Creek Resort, feels confident that social groups will come back before business groups do: She said Shanty Creek is booked to host “upwards of 200 golf groups” this summer along, along with “auto clubs, family reunions, weddings,” and more.
Ramsey added that “smaller corporate meetings and board retreats are starting to book, too,” but that large business groups have been more hesitant due to ever-changing restrictions from the Michigan Department of Health and Human Services (MDHHS). Buck concurs that most of the groups inquiring at the Park Place are holding off on any big decisions until they see capacity limits increase. [Editor’s note: at print time for this issue, MDHHS restrictions still limited indoor non-residential gatherings to 25 people, with masks and social distancing required.]
As restrictions do lift, Leonard is mostly hopeful that they will shift away from person-based caps toward percentage-based caps. For large meeting spaces – such as the Resort’s Governor’s Hall, which was able to accommodate groups of 2,500 people prior to the pandemic – percent-based regulations offer significantly more flexibility than more number-specific restrictions. Last fall, before rising COVID cases and hospitalization numbers prompted the state to tighten its restrictions again, the Resort had even started bringing its conference business back online.
“We were allowed close to 500 people in Governor’s Hall,” Leonard recalled of the fall 2020 regulations. “At that time, [the capacity limits] were 20 or 25 people per 1,000 square feet, so they could be appropriately spaced. Right now, it’s 25 people max, no matter the size of the meeting room.”
MDHHS has kept percentage-based capacity restrictions in place for some other types of spaces, including restaurants and entertainment venues, but hasn’t extended the same leeway to meeting or conference venues. By restricting event spaces in this fashion, Leonard said the state is the one thing holding Traverse City’s conference industry back from a big return to norm.
That could change soon. Per the “MI Vacc to Normal Challenge,” wherein the MDHHS has set benchmarks for lifting restrictions based on statewide vaccination rates, indoor capacity at conference centers and banquet halls will increase to 25 percent 14 days after the state hits a 60 percent vaccination rate. Michigan reached 55 percent on May 10.
“If we were allowed to do 25 percent of our meeting space capacity, we would have meetings here right now,” Leonard said. “There’s interest. People are ready. So we’re hopeful that, by June, we can be at that 60 percent vaccination rate. Because that would be a really big step in the right direction for group business.”