Mergers, Changing Demographics and Technology
Teneo Hospitality Group Addresses Concerns of Associations
Washington, DC, June 2019 … Days before his inauguration in 1861, President-Elect Abraham Lincoln was smuggled into Washington’s iconic Willard Hotel by the head of the Pinkerton Detective Agency. Undeterred by threats of assassination, Lincoln received petitioners for jobs, contracts and new legislation in the hotel lobby and the term “lobbyist” was born.
Today, Washington, DC remains the Mecca for lobbyists and the many associations they represent. “Over 5000 associations are headquartered in the Greater DC area. They are a significant segment of the meetings industry, making major contributions to the American economy and to its political, business and cultural life,” says Adriana Molina, Vice President of Association Sales for Teneo Hospitality Group, the premier Global Group Sales Organization. From large, powerful associations such as the American Medical Association and AARP, to smaller organizations promoting professional groups, science, health, agriculture, consumer products, civil rights and charities, they book everything from major conventions to small seminars and training sessions.
The association market is dealing with the profound changes taking place in the hospitality industry. “Mergers and acquisitions have resulted in fewer options for planners in all areas and associations with less affluent budgets can be hit hard,” Ms. Molina, a 25-year veteran of hotel sales to the association market, notes. “We are all aware of Marriott’s ground-breaking acquisition of Starwood in 2016 that created the world’s largest hotel company. But 2018 brought 18 mergers and acquisitions, in the US, Europe, Israel and Asia.” Based in France, Accor concluded four major acquisitions in 2018. In the US, mergers included Wyndham Hotels & Resorts’ acquisition of La Quinta Hotels and Hyatt’s purchase of Two Roads Hospitality that added 85 properties to the company’s portfolio.
Ms. Molina compares the situation to airline mergers that have left the US with basically four major carriers: American, Delta, United and Southwest. These mergers, often marked by labor strife and problems integrating staff and fleet, have reduced capacity and raised fares.
“Hotel mergers have removed many competitors from the marketplace and resulted in greater standardization,” says Adriana Molina. In any given destination, hotels that were once competitors are now operating under the same banner if not the same brand. “Planners have less choice, less leverage and less flexibility in what was already a seller’s market.” Tougher contract negotiations and new and more stringent terms, also add to the pressures put on planners.
Teneo offers a range of solutions to this and other industry challenges, most specifically through its wide network of independent member hotels. “Independent properties are not bound by inflexible corporate policies and procedures,” Ms. Molina says. “They can more easily offer customized solutions for an association meeting.”
In addition to increasingly complex challenges in the meetings market, sweeping changes in demographics are driving every industry. The association market is no exception. Millennials now constitute one-third of the American workforce and members of Gen Z, born between 1995 and 2015, are joining them in growing numbers. Adriana Molina sees these two tech-savvy groups revolutionizing the meetings industry. “Both groups share a strong desire for meaningful connections, authentic experiences and a chance to learn new skills,” she notes, “and they are powering some very lasting and positive changes within the industry.”
Teneo, with 350 independent and small brand hotels in its expanding portfolio, is ideally positioned to help association planners meet these new mandates. “Teneo has the scope, flexibility and in-depth market knowledge to connect planners with the hotels that can creatively and specifically meet their needs,” says Ms. Molina. “Our client hotels specialize in creating exceptional, authentic experiences and provide technically advanced meeting environments, which help drive change and provide maximum value.”