Corporate meeting buyers have begun to reexamine their internal policies and procedures as it becomes increasingly difficult to find space for small meetings. Lead times for meeting requests remain short, and meeting managers said they are using all tools at their disposal—including technology, supplier partnerships and employee education—to streamline the planning process.
Buyers are coping by taking internally consultative approaches, instituting low-tech organizational processes, imposing more controls or trading down in hotel price point in some locations.
Lead times for meetings at San Jose, Calif.-based Cisco Systems Inc. continue to be "unbelievably short," according to Michele Snock, manager of global meeting services for Cisco's Americas operations. Most ad hoc small meetings have an average lead time of three weeks, she said.
"We've been doing it for years, so we have a whole process in place to handle it," she said, adding that the company has an entire team focused on managing small meeting requests.
Even with an efficient process in place, Snock said lead times have presented a challenge in such high-demand cities as New York, where hotel availability is noticeably tighter.
"It takes more time now," she said, adding that internal stakeholders have begun to pressure Snock's department to explain why meeting costs are rising. The meeting department submits a preliminary budget to stakeholders before entering into contract negotiations.
"That's where we're feeling the pressure: not so much the short lead times, but that they're pushing us to get better pricing and more detail before they even sign off. We don't have time. We have 800 other meetings to do," Cisco's Snock said.
To alleviate the situation, Snock said her department is trying to function more often as consultants, and give stakeholders options on how to achieve meeting requirements at alternate cities or properties.
"We've asked our hotel suppliers to come in and, instead of telling us about their hotels, give us an education on where they have great values," Snock said.
Once the meetings department knows where to find better hotel deals, they can suggest alternate sites to stakeholders, she said. In addition, Cisco has asked its meetings technology provider, Philadelphia-based StarCite Inc., to educate the department on how to find good deals in the shifting market.
A new budget-estimating tool from StarCite, which Cisco recently adopted, also is expected to streamline the planning process, Snock said. The tool compiles hotel rate information from the previous six months to project meeting costs. Rate data is compiled from StarCite's corporate customers, she said, and the tool allows easy comparisons of multiple markets.
"It gives you some guidance on pricing differentials," Snock said. The tool is aimed to avoid last minute cancellations by stakeholders affected by sticker-shock. "We do the whole budget, we start to send out requests for proposal, everyone is fully engaged and the client goes to get authorization from their management and quite often that's when it gets cancelled."
Lisa Stanford, program administrator for travel and meeting services for Houston-based ConocoPhillips Co., said internal lead times for meetings with 100 attendees or less have continued to shorten during the past two years.
"We haven't taken a formal position in notifying our clients that they need to give us longer lead times, it's dictated by what the business needs are for the meeting," Stanford said.
Short lead times have presented a challenge, she said, especially earlier in the year when there was a flood of meeting requests. Stanford's department took a low-tech organizational approach.
"We literally had to take a whiteboard and make a calendar grid with the dates that were sold out for meeting space at our preferred hotels. That's the first time that's ever happened to us," she said.
Overflow meetings were placed on alternate dates or at alternate properties, Stanford said. Houston-area hotels still are feeling the effects of Hurricane Katrina
(Meetings Today, Sept. 19, 2005), and availability is limited, she said.
"We are not struggling with the meeting space so much, but if we need the sleeping rooms with the meeting space, that's been a challenge," she said.
Some preferred hotels, which previously guaranteed the company a group rate no matter what the occupancy was, have begun to require ConocoPhillips to pay transient rates when the hotel is at least 80 percent full, she said.
"We pay the rate because we don't have the support from our business units to move the meeting," she said.
ConocoPhillips has begun to use the meetings tool by Sabre's GetThere to streamline meeting planning, she said.
"Our long-term strategy is that we're going to look at meetings of less than 20 attendees and have admins plan those themselves through our tool with our preferred hotels and established meeting packages," she said.
Stanford said lead times for small meetings may increase this year, but not because of market demands.
"I see them lengthening a bit, just because people are so busy that it's hard to find a common time for people to get together for meetings, but I don't see them lengthening because of availability at the hotels," she said.
For some companies, the shift to a seller's market has provided the motivation to further centralize meetings management.
"We've tried to set up some more controls around meetings here, and centralize it a little bit more to educate and encourage people to be more proactive in looking for schedules that work for both the company and the vendors," said Robert Jacobsen, manager of global travel and meetings for Seattle-based Avanade Inc., a technology consulting firm launched by Microsoft Corp. and Accenture Ltd.
Jacobsen said the company holds about 30 events each year with 100 or fewer attendees. Though stakeholders who regularly submit meeting requests are aware of tightening availability at hotels, employees that rarely submit meetings need to be informed of the situation, he said.
"We've still been able to find some good venues for our meetings at affordable prices, but the search may take a little longer than in the past," Jacobsen said.
Lead times are "pretty much the same, which are never long enough," he added. "Definitely, it's more a seller's market than it was over the past couple years. Destinations that have been popular in the past, like Las Vegas, are even more difficult to find space in when we need to."
Avanade also is evaluating how it could use technology to streamline its meetings program, he said.
Short lead times have affected many OnVantage Inc. corporate customers, said Stanley Chin, chief operating officer for Santa Clara, Calif.-based meetings technology provider.
"The lead time for small meetings is dropping year-on-year," he said. "It's the competitive nature of the business environment, the economy in general. Everything is becoming faster paced."
Lead times for small meetings generally are less than two months, and are not expected to lengthen, Chin said, as meeting managers become "victims of their own success."
"They've been able to do things so well that they're getting more and more meetings coming to them," he said, adding that corporations have not hired more planners to accommodate more meeting requests.
Even with meetings technology in place, corporations are struggling to handle the growing volume of last-minute events, he said. OnVantage plans to target small, ad hoc meetings in upcoming product releases. Chin said he has not yet seen buyers demanding longer lead times for meeting requests, and have responded by working harder to keep up with demand. Electronic requests for proposals can save the most time for both buyers and suppliers, he added, but there are still opportunities for technology to streamline the process.
"Ultimately, the problem with small meetings is that they aren't very efficient, even with electronic RFPs. It's not an optimal solution," Chin said. "There's a gap in terms of technology when it comes to small meetings and we're working on a much more targeted solution."
In the fourth annual FutureWatch survey of 1,268 Meeting Professionals International members, released earlier this year by MPI and American Express
(Meetings Today, Jan. 23), meeting buyers predicted a 19 percent increase in lead times, third parties expected a 63 percent increase in lead times and supplier respondents predicted a 59 percent increase in lead times. Lead times for smaller events, which the survey defined as fewer than 50 attendees, were predicted to increase by 52 percent for meeting space and by 35 percent for hotel and support services in 2006, compared to 31 percent and 14 percent for larger events.
Some MPI members called the results "wishful thinking"
(Meetings Today, March 6). Dawn Myers, director of research for MPI, said that due to existing short lead times for smaller meetings, growth percentages for that segment automatically are more dramatic with the addition of a week or two to the booking window.
"These smaller meetings are being planned twice as soon as the larger meetings. There's less flexibility in that. It's more the math then anything else," MPI's Myers said.
The FutureWatch survey results do indicate a shift to a seller's market, Myers said, and tightening availability at properties.
In future surveys, MPI may draw a more clear distinction between the internal lead time, how far in advance a planner receives a meeting request, and the external lead time, how far in advance a planner must book meeting space. Based on member feedback, Myers said planners are pushed to find space earlier, but are not seeing increases in internal lead times.
"They're saying that their suppliers are requiring them to plan further out," she said.
Suppliers and third-party providers also predicted more dramatic increases in lead times than did planners in the survey, she said, but that may change as buyers are only able to place last-minute meetings at lower-tier properties or locations.
"I would expect for suppliers to be more aware of lead time increases that they're going to have to require, given their capacity, than client-side planners would be," Myers said, adding that it may take time for buyers to communicate the shifting market to executives and stakeholders.