Sign up for our newswire newsletter

 

SMERF's Up!

The on-and-off love affair with the budget-conscious SMERF (social, military, education, religious and fraternal) market, where attendees usually pay their own way, is back in full bloom in first- and second-tier cities alike. Hotel occupancy trends tell why.

In the first quarter of this year, nationwide average hotel occupancy slumped 10.9 percent and the average daily rate (ADR) dropped 7.7 percent from last year’s first quarter, according to Smith Travel Research (STR). It followed a year when average occupancy was off 4.2 percent while ADR still increased 2.4 percent.

This occupancy and ADR decline, along with the resulting value-adds and booking incentives offered by a wide range of hotels in many destinations, has opened new options for SMERF organizations, according to Donavan Shia, vice president, market intelligence for Destination Marketing Association International.

"Many top-tier cities are struggling and are much more willing to negotiate with SMERF groups. Groups can access incredible savings and incentives at top destinations," Shia says. "It’s an amazing buyer’s market."

More Coverage

Along with new city choices, he notes that SMERF planners now have access to high-end hotels and resorts that were once out of reach.

"They’d like your business now," he says. "The biggest change in the type of deals we are seeing is in the pricing of group sleeping rooms. Such top-tier cities as Atlanta have become more aggressive. Higher end properties such as Ritz-Carltons that were on the sidelines are now participating,"

Filling the Gap
Among planners who agree with Shia is Gregg Talley, president of Mount Royal, N.J.-based Talley Management Group, an association and event management company whose clients include Alcoholics Anonymous, the National Society of Experiential Education and the Real Estate Educators Association.

"Deals are being offered all over the place," he says. "Everybody’s’ gotten easier to deal with as we go through this. Look at upscale and resort properties—normally not a bracket we can afford, but now we can."

While Talley acknowledges that the hotel industry is hoping for a mid-2010 rebound, he’s not so sure it will come that fast.

"I think the jury is still out and that it will be a slower pull-out, which should translate to a more protracted buyer’s market," he says.

EMCVenues, a Brielle, N.J.-based site selection and meetings solutions company, held three focus groups of primarily corporate meeting planners earlier this year, with the results indicating that hotel availability should favor SMERF and other non-corporate markets for the next 18 months or so.

"Their number of meetings was off 25 to 30 percent on average and the number of attendees had shrunk. All saw it coming back at the end of next year," says Jody Wallace, president and CEO of EMCVenues. "Properties are looking to government and SMERF to fill the gaps."

In contrast to corporate business, Wallace notes that the volume of meetings her company does in the education market is relatively unchanged.

"Education foundation meetings, especially those that are grant driven, have held steady," she says. "We’ve seen some fall off, but they are still happening."

Recession-Proof
For now at least, SMERF organizations are finding that the odds are in their favor.

"Groups that book a year in advance, and that’s most of our groups, are in the drivers’ seat," says Ted, Dey, president of Norfolk, Va.-based Armed Forces Reunions Inc. "They’re in good shape though 2010. Hotels are begging. But we’re not finding the deals for 2011 and 2012. Hotels are looking at the future as if it is going to be rosy."

Describing military reunions as "recession-proof," he adds that of two groups coming up, an infantry reunion in Nashville, Tenn., promises to exceed its room block, while attendance is likely to be down for a World War II group scheduled to meet in San Antonio.

Sidney Dunn, administrator of the Indianapolis-based Fraternity Executives Association, echoes that the deals are out there through 2010.

"Hotels are anxious. We’re seeing more deals and lower rates for those booking short term," he says.

DeWayne Woodring, executive director of the Indianapolis-based Religious Conference Management Association (RCMA), also says hotels are currently eager for business.

"It is amazing how salespeople get religion in difficult times," he says. "I’m hearing from our members that they are being contacted by hotel salespeople that they’ve never heard from before. Usually, the religious market is recession-proof. People save all year to go to them and many of them stipulate that they must be held each year."

RCMA normally attracts around 1,300 to its annual conference. The 2008 conference held in Orlando was the best ever in terms of attendance; this year’s was held in Grand Rapids [Mich.] in January. Fort Worth, Texas is the convention site for next year, while the 2011 convention will be in Tampa, Fla.

The 248-room Heldrich Hotel & Conference Center, an IACC-certified conference property in downtown New Brunswick, N.J., is among hotels that are seriously pursuing the religious market. The property introduced flexible "Divine Inspiration" packages earlier this year.

"We were looking at ways to fill rooms on weekends when rates are lower," says Joe Di Girolamo, the hotel’s director of sales and marketing. "We’re getting a cross section of all religions—Muslim, Jewish, Christian, usually 20 to 60 people, many coming in by train, and we have the attraction of three live theaters across the street."

A generic silhouette of a person.
About the author
Tony Bartlett