Buyers Try Short-Term Ploys

Seeing an opportunity in a softening U.S. hotel market, some corporate buyers are implementing strategies to address short-term meetings flexibility and management, including using preferred suppliers and pointing stakeholders to second-tier cities.

"The good news for buyers is that there are short-term opportunities available out there," said Mary MacGregor, vice president for marketing and business development for BCD Meetings & Incentives. "If you've got a piece of business that you can drop into a hotel where they've got a hole to fill within a two- to four-month timeframe, that's when you're really going to see the ability to have some more flexibility."

Cisco Systems, global manager of meeting services for Michele Snock said she had not seen the price increases she had expected for 2008, adding, "Hotels have now realized that they're not going to make the increases that they were expecting to." Cisco has technology to support the request-for-proposal process for its meetings, many of which have lead times of two weeks to one month. Suppliers must respond to an RFP within 24 hours, "and they usually do," she said.

"There's no question that there's increased levels of concern out there amongst property managers," said Mark Woodworth, executive vice president of PKF Consulting. "In certain markets only—like San Antonio and Fort Worth—are there strains from an economic perspective, but they're experiencing some significant increases in supply."

Woodworth added that while planners may be able to see more flexibility in pricing, it would be far from a deep discount.

Some buyers, looking to capitalize on the situation, like Snock are using technology to elicit quick responses from suppliers. If hotels are looking to fill a slot in their schedule, buyers planning short-term meetings may benefit.

Others are directing stakeholders to second-tier cities. "We really work with our internal clients," said Cindy Carlson, national meetings manager for Chicago-based Grant Thornton LLP. "We are trying to educate our meeting owners on is to really consider cities that may not be as familiar," such as moving a meeting from Chicago to St. Louis.

Educating stakeholders about such opportunities also has helped Julie Merken, senior meeting planner for Weyerhaeuser. "People are very conscientious of what's going to work," Merken said, noting average lead time for a Weyerhaeuser meeting last year was 21 days. Most are two-and-a-half days long and have 30 to 50 attendees.

Working closely with frequently used properties or preferred suppliers also can help. "You go with your relationships. They know we're going to be coming back," said David Betke, manager of meetings and corporate travel for BlueCross BlueShield Association.

Carlson added, "We've got some really great partners in hotels and travel that help us and that will do what they can for us."

Merken said Weyerhaeuser asks for transient rates to cover groups if possible when soliciting proposals. With certain properties, they also will combine meetings with transient spending to leverage negotiations.