While almost half of companies do not combine transient and meeting spending to leverage better discounts, according to an exclusive Meetings Today survey, third-party travel management company executives say the practice is on the rise, and the implementation of strategic meetings management programs and meetings technology has made it easier to collect group spending data, which eases leveraging it with transient.
According to a Meetings Monitor survey of 154 corporate meeting buyers, 49 percent said they did not combine group and transient spending for either air and hotel negotiations. Approximately 27 percent said they combined volumes for both supplier negotiations, 9 percent said they combined volume only for air and 14 percent said they only combined volume for hotel negotiations.
"One of the biggest obstacles in the past was that they didn't have good data for groups, but now people are starting to get better data about where potential leverage opportunities are," said Peter Moen, vice president of global business development for Carlson Marketing Worldwide.
"We recommend that companies build that strategic meetings management program so it's very much in complement to the transient program, and the two work together to bring the best value to the suppliers," said Christina Wilkes, American Express practice leader of advisory services for meetings management. "It's going to help give the edge in negotiations. Suppliers are more receptive to that concept as well."
Some buyers are coming to the meetings negotiating table with transient data in hand.
"I work as much as possible with those suppliers that work with us on the transient, so I'll try to direct business that way whenever possible. It makes more sense to be able to leverage both the meetings and transient spend with each other," said Patricia Carlin, purchasing manager of global card and travel for Dublin, Calif.-based Sybase. She added that suppliers she works with prefer that approach "because the transient is a little bit more predictable than the meetings. You don't know necessarily that you're going to have another meeting. I go in there and say, I know this is a meeting, but my transient spend is this. It's just a part of the negotiation."
Carlin said the preferred suppliers in areas where her company does a lot of business are "pretty good about building it all together, giving me the transient rate. The companies that charge me the same for meetings as they do for my transient or less are the ones I'm looking at," she said.
While buyers are looking to bring in transient spending data to lower meeting rates, "sometimes the benefit ends up being on the transient side," due to the higher yield of meetings, said Carlson's Moen.
"The more group travel you can bring to them, the lower your transient rate might be," he said. "The benefit of the group is that now you can do marketshare agreements with hotel suppliers across many destinations. You can negotiate with them and move share based upon a segment, like certain field meetings if the destination isn't predetermined."
"What we're seeing now is using the meetings to help leverage the transient negotiations and the real savvy customers are taking it the other direction as well," Amex's Wilkes said.
Some hotels have begun to approach buyers with deals for combining spending. Bill Davidson, manager of corporate travel and meeting services of Austin, Texas-based Sematech, said some properties have offered a yearly upfront meetings pricing list based on the company's historical transient spending with the hotel.
"Certain properties that we have good transient relationships with have actually come up to us and offered us meeting packages almost in advance, because we do transient with them," he said.
"Knowing that we may have some long-term strategic partnerships with certain properties, in that case we have corporate standing in our year-over-year spend," he said. "They'll come to us and say, 'Look, this is what we're willing to offer you for meetings for this year.' It gives us a starting point."
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