MeetingWorld: Hotels Wait For High-Revenue Groups
Hotels expect occupancy and the rates they can charge both to continue to soar through 2006, so corporate meeting buyers may be turned down by a property because the meeting does not produce enough revenue, not just due to lack of available space, said hotel executives at the MeetingWorld conference held in New York on July 26-27.
Even if a hotel has room for a particular group, they may wait for a better offer, said Fred Shea, vice president of sales operations for Hyatt Hotels Corp., during the conference's keynote session on meeting industry trends.
"Planners have to be more flexible on site selection," Shea said. "Hotels may be choosy."
Rich Del Colle, Lexington, Mass.-based meetings and events supplier manager Americas for Hewlett-Packard Co., told conference attendees that corporations would hold fewer meetings in the future, due to cost control and consolidation. As companies become more proficient in strategically sourcing meetings,unnecessary events will be cut or combined with other events, he predicted.
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As hotels begin to have an advantage in event negotiations, meeting buyers should pay greater attention to contract terminology, said Tyra Hilliard, associate professor of meeting and event management at the University of Nevada and chair of the Convention Industry Council's Apex contracts panel.
"In a contract, never admit the other party will be damaged," Hilliard said in a two-part session on contracts, "use the term 'may' be harmed."
Hilliard said the hotel industry is enjoying a rebound in revenue, so negotiations for meetings and events may be tougher. She advised meeting buyers to focus on "lost profits" rather than "lost revenue" in attrition and cancellation clauses. She advised buyers to keep the master account bill and attrition fees separate, so the hotel bill can be paid while negotiations over attrition continue.
As concerns over security increased after the July 7 London subway bombings, Hilliard cautioned that "fear doesn't amount to force majeure." Meeting buyers are still under contract for committed room blocks, even if attendees stay home out of fear of terrorism.
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A panel of independent and corporate meeting mangers discussed how corporations choose third-party planning services as the market becomes saturated with meetings consultants.
"We have learned to partner with procurement and we tell our suppliers to do that as well," said Camille Paluscio, Auburn Hills, Mich.-based leader of meetings and events for Volkswagen of America Inc. Independent consultants should understand their client's culture and expectations, she said.
"What's your specialty? That's a better way to make inroads into an organization," she said.
Procurement strategies are "here to stay," Paluscio said, and both independent planners and corporate meeting managers need to emphasize communication and defined goals.
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Joan Eisenstodt, president of independent meeting management firm Eisenstodt Associates, and Kelly Franklin Bagnall, partner with Texas-based law firm Brown McCarroll LLP, discussed privacy issues in the meetings industry, including protection of hotel guest lists, camera phones at tradeshows and the dangers of radio frequency identification technology.
They warned that in coming years it will become even more difficult to protect sensitive information.
Meeting buyers should check hotel privacy policies before an event and ask how long guest information is stored, where it is kept and how it is disposed of. When in doubt, assume that information is shared rather than kept confidential, Eisenstodt said.
MeetingWorld is sponsored by Successful Meetings and MeetingNews, sister publications of Business Travel News.