Government cutbacks and increasing competition for business are impacting those who serve this sector.

The Wyndham Hotel Group considers the SMERF market “a big part of our world,” as Tim Rector, vice president of global sales describes it, because the brand includes price points in nearly every hotel sector. Wyndham garners most of its SMERF revenues in the religious, educational and military segments, which represent about 17 percent of the brand’s group business.

Wyndham’s marketing to military groups is focused on destinations like Tampa, Fla., that are near bases, but the future in this segment now has question marks because of government cutbacks, Rector says.

“As yet, we haven’t had any cancellations, and anything booked has already received approval,” he remarks. “But we are seeing less military business in the pipeline right now.”

Besides the cutbacks, there is also the element of increased competition, reports John Meroski, president and CEO of the Fayetteville CVB, in North Carolina.

With a location near Fort Bragg, home of 55,000 military personnel, and a military-friendly culture, Fayetteville relies heavily on military group events, which account for 75 percent of its group business. Vet reunions occur frequently here, especially in November when thousands of veterans gather for the annual Heroes Homecoming event.

“We have a strong military culture, 30 military museums, historic and other sites here, so a big part of our marketing goes to this segment,” Meroski says. “What we are seeing is a lot more competition for military business. Many U.S. cities didn’t market to military, but now they are after them—with lower rates.”

Competition is also affecting the educational segment of the SMERF market. Julie Coker, senior vice president, convention sales and services for the Philadelphia CVB, says educational meetings are her city’s strongest SMERF segment, but other cities are stepping up their marketing efforts and some have a more extensive lodging product as well.

“Education is our largest SMERF market,” Coker says, “but meeting planners are in the driver’s seat because there are now so many city choices. And some have more hotel inventory than we do.”

But Philadelphia does have a prime East Coast location, a famed heritage and many universities and other institutions of higher learning that draw in the sector.

“Planners can typically expect up to a 10 percent boost in attendance when they book Philly,” she says. “And we have a walkable city that doesn’t require bus or shuttle expense. Center City is filled with restaurants and cultural attractions that make us stand out.”

To meet competition from cities like Boston and Washington, D.C., Philadelphia is diversifying its SMERF marketing to include more multicultural and sporting groups that typically meet during the city’s summer “need” periods. Coker said efforts are also under way to add another citywide hotel near the convention center with up to 1,000 guest rooms.