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July 21, 2015

Report: How Many Group Room Nights Are Booked Outside the Room Block?

A recent study jointly released by ASAE: The Center for Association Leadership, Center for Exhibition Industry Research, Destination & Travel Foundation, Meeting Professionals International, and Professional Convention Management Association Education Foundation, has found that on average, one in three group room nights in the United States are booked outside of the event contracted room blocks.

“Despite general agreement that many attendees book outside the room block, the meetings industry traditionally relies on the historical room block pick-up as one of the most important metrics to value an event,” Christine Shimasaki, Managing Director of empowerMINT.com and Event Impact Calculator at Destination Marketing Association International, said in a statement. “This study proves that the method captures only a partial story, and is the first of its kind to quantify just how many more overnight visitors the meetings industry is continuing to drive to destinations across the United States.”

Performed by Tourism Economics, an Oxford Economics Company, the study conducted ZIP code analyses for more than 170 events with more than 880,000 attendee origin data provided by registration and housing companies, association management companies, destination marketing organizations, and individual meeting and exhibition organizers. Events ranged from 60 to more than 55,000 attendees, across various market segments, event locations, and destinations from 2012 to 2015. The research took a conservative approach to event room demand, estimating that only those attendees with ZIP codes more than 100 miles from the meeting locale required a guest room.

While on average 34.1 percent of rooms are being booked outside the contracted room block, study findings showed significant variation in the proportion of rooms booked outside the block, which can be explained in part by certain event characteristics.

“Across the sample of events studied, the variation of the share of rooms outside the block was quite large, so it's critical to avoid applying the every third room assumption across all events” said Christopher Pike, Director of Impact Studies at Tourism Economics. “Factors including event size, facility gross square footage, market segment, and length of an event all influence the share of rooms booked outside the block, and we have a tremendous opportunity to match room demand with an event more closely.”

The industry-wide collaborative study introduces a new metric of event room demand that will provide planners, hoteliers, and DMOs an additional lens through which to consider room block pick-up performance. Taking event room demand into account produces significant benefits to all parties. An event avoids running the risk of being undervalued due to a high proportion of attendees and exhibitors booking rooms outside of the block. As a result, the meeting planner also minimizes difficulties in securing adequate exhibit and meeting space for future years or underestimating its room block requirements in destinations that have limited hotel supply. Likewise, DMOs avoid underreporting overnight attendance and by extension, economic impact of an event, and hotels are well prepared to meet actual room demand. In addition, stakeholders such as media and local politicians unfamiliar with industry trends, will be less likely to underestimate the value of events.

“Going forward, we encourage DMOs to partner with their planners to extend the work of this study and conduct individual event analyses, because with more data we will be able to understand some further insights into what continues to influence attendees and exhibitor to stay outside the contract room block,” said Shimasaki. “This study is the first step for the meetings industry to assess the number of rooms actually used with greater accuracy and provide key data to inform and encourage additional change and progress.”

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