Corporate retreats are back. Hotels are banking on it.

Conferences and other group business are usually the last part of lodging to recover from a downturn. This type of travel has large upfront costs, making it an obvious area where companies can cut during tough times.

Now, the spread of remote work and Zoom calls is prompting many companies to give priority to group travel and industry conferences as a more efficient way of promoting team cohesion or meeting with partners and clients, analysts say.

Company planners are using their budgets for conventions and corporate retreats, reflecting America’s changing work and travel habits.

“Some people are not going to the office every day, so there is a need to get together," said Jeff Doane, chief commercial officer for Omni Hotels & Resorts, which specializes in group business travel. “They are planning to attend meetings, they’re planning to attend conferences in order to make those face-to-face connections."

Revenue per available room for group travel was up 6.4% for the first eight months of this year compared with the same period in 2023, according to data firm CoStar Group. Group travel is generally defined as bookings of 10 rooms or more at prenegotiated rates.

That outpaced inflation and revenue from smaller groups and individual travelers, which was up less than 1%. Average daily room rates for nongroup travel, meanwhile, have fallen slightly this year while group booking rates increased 4%, according to CoStar.

The consistent bookings for large group business are a welcome boost to the lodging sector. After a surge in what is called “revenge travel" following pandemic lockdowns, domestic leisure demand has slowed, particularly among lower-income travelers whose budgets have been pinched by rising inflation.

“Group and convention hotels are having a moment right now," said C. Patrick Scholes, a lodging and leisure analyst for Truist Securities. “That is the greatest strength this year and likely next year in terms of revenue growth for the domestic hotel industry."

Fortune 500 companies are driving the increase, Scholes said, in large part because strong corporate revenue and profits are boosting their budgets for travel.

Demand is particularly strong from financial and technology companies. In San Francisco, where in-person business events have been walloped by remote work, Omni’s downtown hotel saw its strongest bookings in “quite awhile" for this year’s Dreamforce, a huge confab hosted annually by technology company Salesforce.

Companies are also spending big at the hotels and resorts where their employees are staying. For Ryman Hospitality Properties, a real-estate investment trust specializing in large group travel, revenue from group spending on dining and entertainment reached a record high in the second quarter and helped offset slowing demand from leisure travelers.

“When organizations are bringing people together, many of them for the first time postpandemic, they are willing to commit the budgetary dollars to that group event to ensure that it goes off flawlessly," said Ryman Chief Executive Mark Fioravanti.

Hotel owners such as Ryman and Omni are also benefiting from a slowdown in new development of larger hotels. The pandemic and rising interest rates have made it difficult to finance large projects in recent years, Scholes said.

It isn’t an entirely rosy picture for group travel, which first started showing promising signs of recovery in 2022. Occupancy remains slightly below 2019 levels, according to CoStar data, while room rates are barely keeping pace with inflation.

But group travel is often booked years in advance, and both executives from Omni and Ryman said they are seeing strong demand through 2027. For years, Covid-19 and other uncertainties made group travelers hesitant to make big future commitments, but that is changing.

“Availability is getting tougher, so you have to plan a little bit further out," Doane of Omni said. “Organizations and meeting planners have a bit more confidence that things are stable."

Write to Kate King at kate.king@wsj.com