Cancellations Boost Mtg. Negotiability

Economic concerns have resulted in a spate of meeting cancellations, leaving hotels with more group availability and more willingness to negotiate meeting rates in certain markets, consultants and meetings management firm executives said. Buyers, however, are experiencing different levels of hotel flexibility.

"The lodging industry is over-responding to the weak start of the year," said Bjorn Hanson, hospitality and leisure group principal for PricewaterhouseCoopers. "That creates some opportunities for midsize and smaller meetings that have shorter scheduling horizons to negotiate more aggressively and maybe not only get more favorable room rates, but other concessions as well." A slightly higher rate could include more concessions, he added.

Availability has increased in the past 30 to 60 days, said BCD Meetings & Incentives vice president of marketing and business development Mary MacGregor. "We are seeing more availability, more hot dates passed our way, more gaps in their booking cycle and more marketing from hotels about availability. They're marketing to everyone and anyone," she said, adding that negotiating malleability has increased.

"It's certainly not changing in peak times," she said, "but we see a bit more flexibility with business that will fill need dates and gaps."

Peter Moen, vice president of global business development for Carlson Marketing Worldwide, agreed. "We've seen that soften," he said. "There are cancellations, so we tend to see properties open up with shortened turnaround times."

Heather Haley, manager of travel and meetings for David's Bridal and Priscilla of Boston, said she anticipates more flexibility in certain markets. "Hotels know that the end of their upswing was coming, regardless of the economy," she said. "Where there truly is a corporate presence, they will see an impact."

Debbie Douglas, meeting planner for aviation and travel services for Jeld-Wen, said she has fielded hotels' calls since late January, mostly from such second-tier cities as Cincinnati and Tucson. However, new meetings are on hold until April.

"Everyone is waiting for the second quarter to see what the results are. We're not alone in our hold and they notice the difference," she said. "Last year was difficult in finding space. Now it's, 'We're definitely negotiable on that cost.' I'm not sure how far they're ready to go."

However, Austin, Texas-based Sematech senior meeting planner Donna Towery said, "It seems like it's been more of a seller's market, with an attitude of take it or leave it." She added that rates for some smaller meetings have increased.

Both BCD's MacGregor and PwC's Hanson said some companies have cancelled or postponed upcoming large events, including product launches, due to the uncertain economy, leaving hotels with space to fill.

"There's not a wave of this happening, but there's more of this happening than there's been since 2002," according to Hanson, who also warned buyers that if the market gets stronger in the third quarter, "an overreaction may dissipate."

ehunter@btnonline.com