Crowne Plaza, Hyatt and Radisson in recent weeks all have issued chainwide meeting rebate programs to stimulate either the corporate meetings market as a whole or, at least, their chain's share of it. The programs sport different features but all offer planners some kind of post-negotiation discount or partial rebate of meeting expenditures.
Coming on the heels of Marriott International's April decision to issue a new points-for-planners program, the meetings market suddenly is awash in hotel promotions and gimmicks, with planners being presented with several options to reduce meeting expenditures.
"This may be the biggest fight for marketshare the industry has ever experienced," said Hyatt Hotels & Resorts vice president of sales Ty Helms.
What's unclear, though, is whether the programs will work. Executives from Hyatt and Crowne Plaza Hotels & Resorts expressed doubt that these programs will juice the overall market, instead painting them as tools to increase their respective shares of available business. Executives at Radisson, whose program also features a revamped points-for-planners program, were more hopeful that their program could coax meetings that otherwise would not be held or would not be staged offsite.
"We've studied this, and in the meeting business in the past the results were always big enough to be measured but still disappointingly small," said Bjorn Hanson, head of PricewaterhouseCoopers' hospitality and leisure practice. "There may be an effect, but it is a small effect." However, Hanson added that these types of promotions—that offer either benefits to the corporation itself or a hybrid program that benefits both the corporation and the planner—instead of pure points-for-planners programs in which only the planner benefits have a better chance for success. On the other hand, he said, nothing stops a corporate planner from shopping one chain's promotion to a competing property.
"Some of these chains have always tried to avoid these programs because of the incremental cost," Hanson said. "Their accounting systems are not designed to maintain that data. If something goes wrong, people get upset." Still, Hanson painted the spate of promotions as evidence of hotels' strong desire for corporate meeting business, due to the now-entrenched trend of those room rates running higher than either leisure or corporate transient rates (Meetings Today, Jan. 20).Raising The Rebate Stakes
Hyatt's plan was announced early last month. The deal, which applies to meetings held at properties in the U.S., Canada and the Caribbean for meetings booked before Dec. 30 and held before March 30, 2004, offers planners a flat rebate that increases based on the number of room nights booked. Booking a 25-room night meeting qualifies the corporation for a $500 rebate. A meeting with more than 1,000 room nights earns a $20,000 rebate, with several stops in between.
Hyatt developed its plan after conducting a series of focus groups comprised of planners from several industry segments, including corporate meetings, Helms said. "They don't want points or merchandise or upgrades or any of the other gimmicks the industry has recently promoted," he said. "They want savings. This makes them look good to their organizations. Also, they wanted a simple program, which this is."
The Hyatt rebate is not meant as a demand stimulus, Helms said, but rather as a way to gain marketshare at a time when the number of corporate meetings is limited. "There are a finite number of meetings in the planning stages that we and our competitors now bid for," he said. "Customers will hold out for the best value. They have no reason not to, because there's lots of availability. This is a closing tool that adds a piece of value. It's an additional carrot."
The Hyatt rebate increases by 25 percent if the planner pays for the meeting using an American Express card, though Amex itself is not directly a partner in the promotion.
Of course, nothing guarantees a planner that a salesperson at any chain property offering a rebate won't try to negotiate a stronger deal for the hotel beforehand, knowing that there is a rebate to be paid no matter what.
"There are a lot of dynamics here—the value of the piece of business, the revenue streams provided, including levels of food and beverage," Helms said. "This is a chip that has already been played. A good salesperson understands that. That said, it doesn't preclude getting a good deal."
Radisson's deal features a 15 percent discount for all meetings booked and held before Sept. 1 at participating properties in the United States, Canada and the Caribbean, and allows meeting attendees to stay at the hotel at the negotiated meeting rate past the scheduled completion of the event.
"We wanted to do something that let corporations know that our hotels are focused on meetings," said Deanne Paschke, Radisson director of brand partnerships and promotions. "We wanted to do something that would help right now. We want to make this as easy for the planners as we can. There's no extra work. Here's what you save, here's what you get. And the extended room rate for attendees is a nice extra twist."
Paschke said this promotion could spur overall meeting demand, instead of simply Radisson's share of it. "The marketplace wants us to do something of value," she said. "This lets us give them that and bundled with Your Event by Radisson, it puts a finish on it. This gives them value and a good deal and extras. It's not all rate-driven."
Radisson officials, however, denied the discount would in any way affect the properties' negotiating tactics.
"We will not change our negotiating strategy," said Shelagh Fuller, Radisson group market program director. "Our hotels will offer what they would otherwise offer. The hotels are thrilled that we've come out with this, and they will not jack their prices up." Added Paschke: "We're not going to say one thing and do another. We're going to negotiate and then take the 15 percent off."
Radisson also revamped its program, shifting from a tiered structure that offered an increasing scale of points per room nights booked to a new structure that simply awards three points for every dollar spent, provided total meeting cost is no less than $5,000.
Crowne Plaza only formally announced its program late last month, although the chain has been offering it to prospective clients since the end of March, said Keith Biumi, director of brand marketing for Crowne Plaza North America. Under its terms, corporations receive a $5 credit to their master account for every room night consumed. The program has been well received, he said.
"Customers will never say they made the switch because of the program," Biumi said, "but the hotels say it has been an advantage." The key is to feature a flat monetary amount, he said. "We wanted to continue our commitment to the meeting planning community and stand out from the competition," he said. "They're offering points or Palm Pilots, and in focus groups planners tell us that's insulting."
The program is designed to better Crowne Plaza's share of existing meeting business rather than as an overall meeting stimulus, Biumi said. "In some cases, when people see that the hotel community is helping them out, it might stimulate overall demand," he said. "But our distribution is limited, so it's unlikely that a brand our size can stimulate an entire segment, where a Starwood or a Marriott might."
Biumi said it's unlikely Crown Plaza properties will change their negotiating tactics in response to the program. "I can't say what the hotels will do, to be honest," he said. "Our instructions are to offer the best rate, then give the rebate. This is not a cheesy marketing ploy. We want to offer value and keep the meetings going. Plus, planners are too smart for that."
Buyers expressed some interest in the bevy of new promotions.
"It's not going to make us hold a meeting we otherwise wouldn't have held, because we're not holding meetings unless they're absolutely necessary," said Julie Steible, events manager for Dayton, Ohio-based NCR Corp. "But for planned offsite meetings, if there's a reduced rate with more service and more perks, we'll look twice. We'll think about it. The hotel must be in the right place, offering what we need at the right price. There might be an impact there, but it would be marginal."
Steible said NCR has a policy that forbids the acceptance of planner points in all circumstances, even, as in the case of the Marriott program, if the points can be applied to corporate travel. "We can't accept points because it's murky and muddies the water as to who we select and why," she said. Applying points to corporate instead of personal travel "clouds the whole issue. If we were a small company, maybe it would make me think twice, but it's easier to have nothing to do with points at all."