Best Meetings Practitioners Of 2006: Unified Hotel Deals Help ASC's Guerra Slash Costs
Hotel negotiations this year are becoming decidedly tougher for corporate meeting buyers, but Piscataway, N.J.-based American Standard Cos. has been able to maintain its costs by developing a program in which hotel rates for small corporate meetings are negotiated once each year, along with transient negotiations. The program includes one dozen chains in 15 cities and has been successful in leveraging a combined spend.
Ernest Guerra, Nashville, Tenn.-based director of global travel and meeting services for American Standard Business Services, spearheaded the small meetings program. Last year was the program's first big test as the hotel industry gained strength.
"We didn't know if we were going to be able to achieve our goal in that area, but we found that we exceeded it by about 25 percent," Guerra said. The program in 2005 generated over $100,000 in hard-dollar savings on hotel rates, he said.
Small meetings, defined by the company as including fewer than 75 attendees, account for about 300 meetings, or 80 percent of the total volume, Guerra said. American Standard planners focus on large, high-touch events. Smaller events are sourced and planned through the company's travel agency, BCD Travel.
The creation of the program was sparked by an overall discovery process into how meetings were managed at American Standard, initiated by Guerra after he was hired five years ago. "A good portion of time was spent on those types of meetings negotiating every single hotel contract," he said. "It didn't make any sense when you have limited resources to do that for 300 meetings, applying the same resource and certified meeting planner as you would for a large meeting."
Guerra said hotels have been supportive of the small meetings program. One criteria for participating properties is that they have received American Standard business in the past. The meetings volume is an extra incentive for the transient business. "If people are going there, it's because they're happy," Guerra said. "It would have to be significant savings for them to make the move to another property."
American Standard has delivered steady annual volume to its partner properties, Guerra said, and is quick to contact the hotel if volume commitments may fall short. "We tell them they're a preferred property, and if the volume picks up they'll be the place we go to first," he said. "They get nervous, and you keep in touch with them because sometimes there's turnover. If they don't see any volume, they tend to think you moved the business elsewhere."
The program began as a Six Sigma project, Guerra said. "We identified where the spend was using corporate card and agency reporting and saw the cities where we were holding a lot of these meetings, then decided to engage the agency and some local meeting planners and brought them into the process," he said.
The inclusion of local stakeholders was crucial to building adoption of the program, Guerra said. Administrative assistants could recommend their favorite properties, and better understand why a hotel might be left off approved vendors list.
"It took a lot of time, but it was well worth the effort," he said, adding that regular communication with stakeholders ensures that the participating properties are compatible with event needs.
Guerra also involved BCD Travel in the program from its start. After the structure and policy of the program were decided, the agency implemented it. Running the program through the management company is ideal, he said, because additional agents can work on the account during peak seasons without hiring full-time, in-house planners.
This year, American Standard is considering a few changes to the program. When noncompliance rates show up for a particular city, the company adjusts the number or type of properties available there.
Guerra said American Standard also aims to roll out the meetings program in Europe, and plans to follow a similar strategy of local participation in determining partner properties.
"Anywhere we can identify savings opportunities, standardization of processes, productivity improvements and reduce the risk for American Standard in contracts and attrition and clauses, we can get people's attention," he said.
Another key to the success of the program has been giving stakeholders a reason to ensure the program succeeds, Guerra said, and giving responsibility and representation of the project to one person. "You have to have somebody accountable for the program," he said. "One of my meeting planners took on full ownership of the program in addition to meeting planning responsibilities. The person accountable becomes associated with that program, and they got recognition for that too."