As analysts continue to shift hotel forecasts upward for
this year and 2011, meeting buyers could find increasing room rates and hotels
tightening such terms as attrition clauses and deposit requirements, though
planners also should still expect plenty of perks to be included in
negotiations.
David Brudney, principal of Carlsbad, Calif.-based hotel
consulting firm David Brudney & Associates, said that on average meeting
planners should expect a 5 percent increase in room rates across the board in
2011. Hotels that maintain demand better during the downturn could see
increases as high as 10 percent, he said.
"Demand is returning, and hotels that do larger group
business are benefitting from this demand," Brudney said. "It's
probably better on the association side than it is on the corporate side.
Corporate meetings are not as big as they used to be, but they are getting
bigger."
Carlson Wagonlit Travel forecast that overall per-attendee,
per-day costs for corporate meetings would increase between 7 percent and 11
percent year over year in 2011. As such, Brudney said hotels would be less
likely to offer deals, such as zero attrition clauses, and make tighter demands
on deposits and cut-off dates for bookings. Even so, planners should still be
able to negotiate for smaller concessions, such as food and beverage credits,
room upgrades and waivers on resort and parking fees, he said.
"They won't be giving the house away, but there still
will be softer perks," Brudney said.
A late August survey of 90 travel buyers by Maxvantage, a
combined effort of American Express Business Travel and Maritz Travel, showed
that negotiating meetings contracts and finding available meeting space have
increased slightly in difficulty in the past six months.
The survey indicated that 60 percent of buyers sense gradual
improvement and stability in the meetings industry. As such, 37 percent of
buyers said finding availability was more difficult than it was six months ago,
compared with 18 percent who said so in a similar survey Maxvantage conducted
in December 2009. Additionally, 30 percent said negotiating lower rates was
more challenging, compared with 18 percent in December.
Maxvantage also released hotel data that showed group hotel
rates had begun to stabilize during the second quarter, compared with 2009. On
a market-by-market basis, however, some rates increased considerably while
others continued to decrease.
This report appeared in the Oct. 11, 2010, edition of Business Travel
News.