Corporate meeting buyers are sticking closely to their budgets for events with more than 200 attendees, but they often are prevented from fully leveraging those events for cost savings, according to an exclusive survey. Although several hotel chains have offered incentives this year for multi-meeting contracts for large-scale events, many corporate buyers said they don't have enough logistical information to commit to one chain for several years.
According to the Meetings Monitor survey, 27 percent of respondents expected their companies in 2005 to hold more meetings with 200 or more attendees than in 2004. A slightly higher percentage, 35 percent, expected large-scale meetings to include more attendees this year. Most respondents, 57 percent, expected the volume of large meetings to stay steady this year while 15 percent expected their companies to hold fewer large-scale meetings.
The survey showed that meetings with 200 or more attendees also tend to be expensive events. Among respondents, 72 percent said their companies spent more than $151 per attendee on large-scale events in 2004. About 23 percent of respondents said their companies spent more than $250 per attendee at these events.
This year, about one-third of respondents expected the cost per attendee for large meetings to increase. According to the survey, 53 percent of respondents expected costs to remain steady, while 12 percent expected the cost per attendee to decrease in 2005.
A number of national hotel chains this year have offered incentives for large-scale meetings. Starwood Hotels and Resorts Worldwide launched a program in January for large meetings that offers rebates, short- and long-term attrition allowances, service discounts and reward points for multi-meeting contracts (Meetings Today, Feb. 7).
Hyatt Hotels and Resorts has a large-meeting incentive program that offers buyers a choice of waived attrition or up to $10,000 in savings per meeting for booking a multi-year or multi-meeting contract (Meetings Today, June 6).
Steve D'Agostino, executive director of sales for Hyatt, said that although the chain expected multi-year contracts to be in highest demand, multi-meeting deals have proven more popular.
"Multi-year is how we started this thing, but based on the feedback I've been getting, it's going to be multi-meeting," he said.
ConocoPhillips Co. program administrator for travel and meeting services Lisa Stanford said incentives offered by hotel chains on large events for multi-year or multi-meetings contracts are tempting, but that such programs must fit the requirements of the event. ConocoPhillips has not committed multiple meetings to a single chain, Stanford said, but has taken advantage of a multi-year agreement to avoid a cancellation fee.
"We don't do things with chains," Stanford said. "But when there are incentives in place, like Hyatt's $10,000 incentive, that's definitely something we're looking at. It does make a difference."
ConocoPhillips in the past few years has limited large incentive travel events, Stanford said. "We've cut back on the number of attendees that are qualified for incentive trips. They used to be a lot larger and in the last couple years we've really scaled that back. It's partly because of the cost of the actual award and the trip going out, but also the cost of travel," she said.
Lisa Gray, travel and meetings manager at pharmaceutical and biotechnology company Chiron Corp., said the Emeryville, Calif.-based company only holds one large-scale event per year, and the cost depends directly on the budget. Gray said she usually stays with her preferred meeting hotel chain, but she has not signed multi-year deals for her annual event. The event cost is set more by the parameters of the meeting than the ability to negotiate more effective savings.
"We're still driven by location. In my experience with Chiron, they change location, so the meeting space requirements change and you can't continue to have it at the same hotel," Gray said.
Hyatt's D'Agostino said demand for multi-year, multi-meeting contracts is greatest among associations.
"One of the reasons for that is associations by their bylaws tend to be able to book a timeframe, such as the first week in May, so they can plan further ahead. Corporations are a little bit more all over the board," he said.
Corporate lead times for meetings, even large events, are becoming shorter, he added, but the multi-meeting incentive deal can be a needed push for corporations to plan ahead.
"As the economy is ramping back up, our hotels are getting busier, occupancies are getting higher and rates are rising," D'Agostino said. "This is putting it in front of them to plan ahead and get what they want now, because they're not going to have the luxury next year of everything being available."
Corporations also are much more likely to choose the master account credit incentive over a waived attrition fee in the Hyatt offer, he said. "Most of the corporations we spoke to told us that attrition is really not an issue. Employees show up because they have to be there. With associations, it's not that way," D'Agostino said. "They're trying to track their members and they don't have control over them like corporations do."
Terri Carlton, manager of meeting services and corporate travel for Chicago-based BlueCross BlueShield Association, said her firm holds about 20 large meetings per year.
"People are watching the budgets on the larger meetings," Carlton said, adding that some budgets have been tightened. Food and beverage at some events has been scaled back, and a simple continental breakfast might replace a more elaborate offering.
BlueCross BlueShield handles some government meetings, Carlton said, which can be easier to plan ahead for.
"On those, we've been fortunate to know what the agenda will be and they are going out for multi-year bookings to get better rates," she said.
Carlton said that hotel chains also are building larger properties, so the firm has greater control over site selection when planning a large event. "We're looking in Arizona in July," she said.