Amex Offers Presourced Mtgs.

American Express in a matter of weeks plans to launch a new small meetings program for small and midmarket customers offering prenegotiated hotel meeting packages with per-attendee, per-day pricing.

The program—restricted to American Express Business Travel clients—will allow customers to access an online catalog of hotel chains and individual properties that lists basic and expanded packages and prices. Package rates differ based on amenity level, including food and beverage and audiovisual equipment. When the buyer chooses a property, American Express will take the request to the hotel.

"We're going to use our procurement specialists to have that conversation with the hotels," said Christina Wilkes, advisory services practice leader for American Express Business Travel. While prices are prenegotiated, industry or property conditions at the time of the actual negotiation might allow for more of a discount.

The program has been in development for approximately one year. Amex executives saw demand within the industry for services for companies without heavily managed meetings programs.

"They didn't have a lot of the buying power to negotiate their own deals," said Wilkes. The program will allow smaller companies to use American Express' leverage. "We want customers to have the benefits of this without shaking up their entire organization," she said.

While there are no restrictions as to the size of meetings, the optimal number for using the service is approximately 50, she said.

"Amex creates value here by making things simpler," said Tom Wilkinson, president of TRW Travel Consulting. Wilkinson said that while some buyers will be wary of using such a service when they could use preferred vendors or negotiate rates with the hotel directly, the program could find its wings with smaller or midmarket companies.

Amex and others in the past have offered smaller companies prenegotiated packages in order to help them more efficiently navigate the waters of corporate travel. "The virtue of all-inclusive pricing is that you don't have to be an expert in what you're buying," said Wilkinson.

"That's a pretty standard way of doing business," said Peter Moen, vice president of global business development for Amex competitor Carlson Marketing. "It's good for the hotels and it's good for the companies because you don't have time to specifically negotiate a contract for each of those small meetings."

Moen said he has seen prenegotiated contracts, such as these, used in cities with a high level of corporate travel and, therefore, little hotel space.

The biggest question about these types of packages is whether or not the company is getting good value for their money. "We have used packages in the past, but you do need to do your math and you need to find out what the hotel is charging and divide it out," said Cheryl Hoffard, manager of meetings and events for the Schwan Food Co. "I like to look at the cost of the menus, then back and see the cost of the full package and what kind of value it brings to the meeting. Sometimes it's good for the meeting and sometimes it's not a value."

Prospective buyers also need to assess the included amenities. "Some of the packages include breakfast, meeting rooms and the audiovisual, but you've got to look at what's included in the audiovisual services. Do they have the whole A.V. or do they just have a little bit of A.V.? It all depends upon what's included in the package," said Hoffard.

Hoffard said she will wait and see if the program heralds a new trend. "It sounds to me like a new way of negotiating, and there's nothing wrong with that," she said.

In contrast to other products that look to take booking fully online (see story, page 16), Amex trained a crossfunctional team for this program to provide personal support to clients.

"We don't want to do this just within technology," said Wilkes.

Properties offered in the program will be determined based on anticipated customer need and geography, and the selection will vary from city to city.

"It will provide good coverage in the top markets in the United States and Canada," said Wilkes.

Wilkes said the cost for clients making use of the program had not yet been determined.

The new program could be useful not only for nonprofessional planners, but also for those planners seeking high-demand in the current seller's market, as hotels often have little space available and the upper hand in negotiation.

"Admins and others who have been asked to arrange a small meeting, they don't necessarily know what properties to go to, or they don't know what to negotiate, so they end up signing contracts on their own and potentially paying more than they need to," according to Carlson Marketing's Moen. "I think you'll see more of it as companies implement their strategic meetings management program. I think this will become part of that process."