Resorts, Chains Eye Board Mtgs.

Luxury resorts and hotel chains, facing a softened economy and meeting cutbacks, are working diligently to retain and attract corporate senior executive and board meetings, offering more creative discounts and new services. In an environment rife with competition, however, other properties are stepping up their already aggressive negotiations to contend for more market share.

That competition is enhanced by buyers and executives who may not want to meet in a faraway, international or pricey property, for fear of alienating employees and clients in a tough economy or concerns about potentially being stranded, as many were in the days following the Sept. 11 attacks.

The trends have compelled the upscale hotels and resorts to cut deals while touting levels of service and amenities not found at their competition.

"We do have a number of regular board meetings on the books, but don't have the impression that we've booked a lot of those over the past few months," said Jay Riley, vice president of hotel marketing at Four Seasons Hotels and Resorts. "They're not all that easy to come by, and they're often in the city where the company is based. Our numbers there have been consistent throughout the year, but we've certainly had more companies concerned about them than in the past."

Such chains as the Four Seasons and the Ritz-Carlton, as well as luxury resorts, arguably have a disadvantage in soft economic times as these, as some senior executives shy away from the climate of luxury and exorbitance that those hotels represent. Plus, other less upscale chains have discounted heavily, increasing the level of competition for these meetings.

"When the economy tightens up, everyone becomes a little more rate-sensitive, and now a lot of hotels are very aggressive with rates," Riley said. "We always negotiate, and we have a different level of service than other hotels. Planners want board meetings to happen specifically the way they want, and with the board members' comfort. That's why they use us, and that kind of service costs a little more but the value for the price is good."

Similarly, senior executives aren't choosing the Ritz-Carlton because of its low rates, said JoAnn Kurtz-Ahlers, vice president of sales and business development for Ritz-Carlton Hotel Co. "There's more flexibility because we're more open, but our rates have not gone down," said Ritz's Kurtz-Ahlers. "Cost reductions are not going to bring business to us. Right now, I can't say there's one booking trend. It's all over the board."

Some properties already are feeling the pinch of the loss of high-end corporate meetings.

The Pinehurst Co. of Pinehurst, N.C., which operates four high-end golf resorts in the Southeast and Texas, announced it would convert one of those properties from a full-service resort to a private golf club as a result of the weakened economy and the aftermath of the attacks. The Daufuskie Island resort will be converted shortly, said Pinehurst vice president of sales Jack Bickart.

"Daufuskie Island was going in the right direction, but had always sustained losses," Bickart said. "There was a negative cash flow and that inhibits our ability to grow. After Sept. 11, we lost a lot of corporate business. However, our other properties weathered that because we've been good with reschedulings, and we're looking at a pretty strong 2002."

Pinehurst's three other resorts—Barton Creek in Austin, Texas, The Homestead in Hot Springs, Va., and Pinehurst of Pinehurst, N.C.—had been able to build up a base of annual, repeating corporate executive board business that Daufuskie Island—because it does not have the long history of full-service capability of the other three, for one reason—did not.

Pinehurst has made some changes to draw corporate executive board business in a down economy, including installing videoconferencing capabilities in boardrooms, redeploying sales efforts to local accounts and creating per-attendee complete meeting package pricing. The properties also are stressing their affordability in off-peak times: February, June and July, Bickart said.

"Almost every day has been a little bit better," Bickart said. "Now, after hearing all the heated rhetoric about getting back to business, it seems meeting planners are defiant and booking."

That view was echoed by Kurtz-Ahlers, who said many corporations have moved the locations of their executives around, though there's not a singular driving force behind those decisions.

"We've seen location shifts of executive meetings, but it depends on their viewpoint," Kurtz-Ahlers said. "Some want to pull their meetings downtown from a resort, some want to drive, some just want to stay domestic and some want to support New York City or Washington, D.C."

However, she added, most executive board meetings are not canceling outright anymore. "There's no business in the world that's not going through a shift right now. Management has to plan, reevaluate, reorganize and review strategy and they meet to do that."

Ritz-Carlton has seen a significant upswing in the number of executive and board meetings planned with only a little lead time, Kurtz-Ahlers said, not only due to widespread hotel availability but also because buyers often aren't being charged exorbitant prices for last-minute airfare.