Budgets For Executive Board Mtgs. Growing Slimmer

Executive board meetings are perhaps the industry's most resilient type of event due to the constant need for corporate leadership to develop strategies regardless of economic conditions. Even so, corporations have a greater need to stage these meetings on a tight budget, due to management's reluctance to present an image of opulence during a difficult time.

This has made an impact on how they are negotiated and in the very structure of these events—often causing shorter, smaller meetings with less time for leisure. Properties eager for this type of business have been fairly flexible on rates and ancillary charges, but still will turn away an event that doesn't provide necessary revenue.

"We're seeing shorter, more focused executive board meetings," said Bret Matteson, vice president of Columbia Hospitality, a chain of conference centers that counts Boeing, Starbucks, Washington Mutual and Weyerhaeuser among its corporate executive board meeting clients. "There's cost-cutting trends across the board, but senior executives especially want to set an example, particularly if their companies have had layoffs or earnings issues."

Those trends have caused a significant change in the marketplace, Matteson said, and have caused sales managers to consider deals that would never have happened in the past.

"My perception is that, up until the beginning of the last year, properties were in the driver's seat," Matteson said. "If buyers weren't going to pay the full rate, we would pass on the meeting, knowing another would book right behind it. That's not the case anymore, and everyone is aggressive. Buyers ask for more add-ons and more value. We're making commitments we've never made in the past."

One such commitment is to a large Columbia client, Matteson said. "One of their senior executives holds a monthly program without guest rooms," he said. "Previously, we would not book it more than three months out. Now, we've booked an entire year of them, all without guest rooms."

Even meetings that already were small and dominated by senior management have pared costs.

"There's been a move to smaller, high-level meetings in key markets," said Rodger MacDonald, vice president of strategic sales for Destination Hotels & Resorts.

"These are meetings that are down from 100 to about 25 attendees that tend to focus on high-level, strategic issues. The less critical meetings have been put on the shelf for now." MacDonald said the perception that executive board meetings in the past have felt less budget pressure than other types of meetings is true, but those days are gone, and his chain has had to negotiate accordingly.

"They have a budget that others may not, which represents a lot of meetings at independent, upscale properties," MacDonald said. "But they are looking for overall package value. In the past, meeting room charges and other ancillary charges would have been aggressively put into place, but now there's a tendency toward overall flexibility. Knowing all the different profit levels for different areas of a meeting and the hotel allows us to maintain margins while keeping within the buyers' budgets."

MacDonald said his chain increasingly has taken to asking corporate meetings buyers what their total budget is upfront, allowing both sides to craft a deal that can meet both their needs. Though in the past some buyers have been reluctant to negotiate in this manner, that is not so much the case now, he said. "They're businesspeople, and they're open to it," he said.

Given its location outside of Houston, corporate executive board meetings comprise a fairly significant business at The Woodlands Resort & Conference Center in The Woodlands, Texas. Many such buyers are trying simultaneously to increase the return on investment of those meetings while ensuring service levels appropriate to the attendees, said director of sales and marketing Nicki Keenan. "They're looking at ROI, and they're conscious of promoting a conference center as the meeting site to show that," Keenan said. "They still want high-level amenities and golf, but they want to work in those environments."

The Woodlands completed an extensive renovation and upgrade of its facilities this month, but competition from hotels and other resorts has necessitated flexibility on the property's part to secure executive board business. "We're in a competitive environment, and a reasonable discount makes sense to remain competitive, especially since there are some hotels that are way out there," said Bob Nelson, The Woodlands vice president of hospitality and general manager. But Nelson said negotiating flexibility doesn't translate into an entire restructuring of the property's complete meeting package pricing structure. "We've rolled technology into our CMP, but we're a conference center, and that's what we offer," he said.

Given the reduction in scale and scope of some executive board meetings, some corporations are looking into different types of properties, including conference centers that don't include sleeping rooms. Yet, these properties, too, are not immune from the realities of the current market.

"There is more focus on value for executive board meetings than ever before, and we're willing to work to make that happen," said Kathy Jobs Gerke, director of sales and conference services for World Trade Center Seattle and the Bell Harbor International Conference Center.

The Bell Harbor property has no sleeping rooms, but Jobs Gerke still has had to be flexible with some of the property's standard booking guidelines to nail down executive board business. "We have to yield meeting space since there are no sleeping rooms, and we have guidelines regarding the number of people needed for rooms and food usage, but you have to be flexible to get people," Jobs Gerke said.

Overall, though, the two properties have seen a sharp upswing in all meetings business, particularly short-term meetings business.