With the demand for meetings growing and with owners and operators itching for a return to those pre-recession days, once again we’re seeing pressure put on hotel sales associates to push for higher room rates and greater total spend.
Professional meeting managers and planners—in particular, those with budget responsibility—have expected this, but now they bring with them lessons learned and negotiating skills acquired from the heavy rate discounting, perk adding, planner-friendly booking days of 2009 to 2011.
Let’s hope this time around we’ll find a more collaborative approach by sales associates as well as a new appreciation by planners of how critical room rate is to the profitability of hotels.
Here are a few suggestions that should help during this new round of group bookings.
For meeting managers and planners:
- Be receptive to considering alternate dates, arrival and departure patterns.
- Work with the hotel on creating new, more affordable food-and-beverage event options.
- For protection and leverage, create a “fair” performance clause in the contract.
- Focus on “value received” versus best price; keep in mind the hotel that undercuts competitors’ price might not be able to deliver, or worse, may not be in business.
For hotel sales associates:
- Explore tiered room rates with the planner: higher rates for VIPs, senior management and discounted rates for a percentage of others and staff.
- Be creative in adding value to the overall price: additional comp rooms/suites, room/suite upgrades and amenities, selective early arrivals/late departures.
- Should strong pushback occur with room rates, consider discussing the option of contracting for a future meeting or meetings to be tied into the contract.
- Never commit to or promise something your property cannot deliver.
Through open, honest and candid discussion and collaboration between both parties, we can achieve a short- and even long-term win-win scenario.
News and notes …
“Keep America Meeting” In case you missed seeing it, The U.S. Travel Association produced an excellent report underscoring the importance of meetings to the American economy. Meetings contribute billions of dollars to the U.S. gross domestic product; directly employ nearly two million in jobs, supporting nearly five million indirect jobs; and generate billions of dollars in tax revenues for the federal government. Also, meeting participants spend billions of dollars at local businesses including hotels, restaurants and shops.
(I wrote a piece on the value of meetings back at the beginning of the economic dive, in which I pointed out meetings and events provide the “highest return of investment of any marketing channel,” citing a survey of Fortune 1,000 chief marketing officers.)
The U.S. Travel report also found that meetings and events are strategic tools that deepen employee relationships and contribute to the overall health of companies. A 5% increase in employee retention can generate a 25% to 85% increase in profitability.
The report addresses the “converging trends” that still impact the meetings and events business: 1) businesses and government still discouraging meetings travel (budget, cost cutting) concern over media, shareholders and taxpayers perception, 2) long-haul travel hassles and 3) new technology substitutes, such as video conferencing and virtual meetings.
The report concludes with these recommendations:
1) Make meetings more relevant, uniting the entire travel industry behind strong messaging, research and real data (the blueprint for success).
2) Make meetings more accessible. Invest in safe, efficient cost-effective travel and modernize the nation’s air infrastructure. Help the nation’s airlines and airports succeed by reforming aviation taxes and ensuring that all revenue is reinvested into the aviation system.
3) Make meetings more competitive: a new national dialogue. The final challenge is for the meetings industry to evolve and meet the needs of tomorrow’s consumer. The entire travel industry must engage in new dialogue on how we can provide even better experiences for our customers. This includes harnessing the power of new technology, including unified communications, to strengthen the value of in-person meetings.
Additional good reads …
“Luxury corporate retreats are back”
Forbes Travel Guide, 4 April 2012, reports group travel spending went up nearly 8% in 2011 and is expected to rise in 2012.
“2012 Top Ten Meeting Trends”
Benchmark Hospitality’s February 2012 article argues: 1) luxury is back, 2) meeting demand strongest it’s been since 2008, and 3) meeting size is trending up and space is at a premium.
David M. Brudney (David@DavidBrudney.com, 760-476-0830) is a charter member of the International Society of Hospitality Consultants and a veteran sales-and-marketing professional concluding his fourth decade of service to the hospitality industry. Brudney advises lodging owners, lenders, asset managers and operators about hotel sales and marketing best practices and conducts reviews of sales-and-marketing operations throughout the world. His website is www.davidbrudney.com.
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