Buyers Embrace Moderation For Executive Board Mtgs.

Buyers who select sites for corporate executive board meetings are taking a more disciplined and moderate approach these days, seeking inconspicuous hotels and resorts with high levels of service, but not too high, and locations where attendees can compress a lot of work into their schedules but still play golf.

The trend is a result of both the economy and the effect of 2002's myriad corporate scandals, which have forced senior managers to reconsider extravagance, lest it appear wasteful. That attitude has permeated executive board meetings, as buyers shun the highest end in favor of the high end.

"They are much more hyper-sensitive to the perceived value of the meeting," said Elizabeth Zielinski, president of Fairfax, Va.-based meetings management firm Meeting Horizons. "By no means do they want it perceived as a junket. It's due to a backlash from the scandals of Enron and others, as well as the tenuous financial states of a lot of technology companies."

The cognizance of perceived value has led many corporations to eschew the most luxurious properties as potential sites for their executive board meetings, she said. "It almost doesn't matter how good the deal is if it's certain five-star properties," Zielinski said. "They could give away the store and the buyer can't do it."

Some corporations, though, are finding methods to mitigate perceptions of extravagance. Zielinski spoke of one client staging an executive meeting in Phoenix in July at a high-level property—the location and seasonality ameliorating concerns.

Despite the general move away from five-star properties, Zielinski said there are still deals to be found at properties with lower levels of service. "It does give four-star properties leverage," she said. "Yet, they're so prolific that there's going to be more direct competition within a destination for a meeting. Any resort destination has more four-star properties than you can throw a stick at."

The four-star properties, meanwhile, are looking locally for their executive board business. "The demand for small, short-term, upper-management meetings has not stopped," said Frank Fredericks, director of sales and marketing at the Charleston, S.C.-based Wild Dunes Resort. "These companies have developed new habits over the past couple of years, and regional and local businesses are staying closer to home for these meetings, avoiding the cost and inconvenience of travel."

Fredericks said the four-star Wild Dunes has reaped the benefits of the trend of five-star avoidance. "We benefit from it because our resort does not have a recognized luxury-chain name," he said. "Companies don't want a Four Seasons or a Ritz-Carlton, but they still want to go to a nice resort, so they save money and keep their high-end executive board meetings local."

These companies, though, still often need some enticement. "During our slowest period, we have offered corporations incentives to stay locally or regionally," Fredericks said. "We offered master account discounts and increased commissions to third parties that could be passed on to corporations. We did so very selectively and we're out of that season now."

Ritz-Carlton Hotel Co. senior vice president of sales and marketing Bruce Himelstein denied executive board downgrading was even a trend. "That business is flat to trending up for us," he said. "When you're dealing with that level, there definitely is a product they lean toward. These are not long meetings, they're just for a day or two, and we still have good relationships with those buyers."

That said, once the property is booked, there has not been much change in attendee behavior onsite. "Once they get there, they spend their time the way they always have," Zielinski said. "There's not a lot of leisure built into these meetings anyway, but the number of tours or amount of golf they'll play has not changed."

Fredericks agreed that onsite downgrades have slowed or even reversed themselves. "The cleaning-out happened a year or two ago, and it's so bare-bones that there's not much more to push on," he said. "When they choose a regional destination, they might be a little more generous with the meal functions or the leisure options. It's not like it was a few years ago, but corporations have cut so many employees that they want to take care of the people who are left."

Others, though, have seen a limit to the amount of leisure that executives and board members will incorporate. "They fly in and they start working the moment they get in the door," said Chris Kenney, director of marketing for Ariz.-based Tempe Mission Palms. "Then they work until they fly away." Kenney attributed the trend to ever-shortening lead times—about two weeks—which is "becoming more than the norm," he said.

The permanence of the newfound price-sensitivity of executive board meeting buyers, however, is up for debate. "I'd love to see this be a permanent thing, because they should be this sensitive," Zielinski said, "but I think it's temporary. The economy will swing back."