Economic Uncertainty Deals Blow To Upscale Fla. Resorts

<B>Economic Uncertainty Deals Blow To Upscale Fla. Resorts</B>

By Chris Davis

At some corporations, avoiding the perception of extravagance when staging internal corporate events is just as important as the actual expenditure incurred. In a time when many corporations have seen their stock prices shrink over the past several months, and others plan to lay off thousands of workers, booking a meeting at a high-end Florida resort may fall off the list of corporate priorities.

It's an attitude borne out by the history of corporate behavior in other economic downturns, and it has many resort salespeople concerned about postponements and cancellations. Buyers, on the other hand, may have better negotiating options if they are permitted to secure Florida resort space. Some buyers, however, already have felt the slings and arrows of an economy in flux, and it has affected the entire market.

"Some corporations during the past few years have moved their quarterly meetings from resorts to airport or other hotels," said Margie LaBelle, president of Miami-based Meetings and Travel Consultants.

While many corporations haven't pulled large annual corporate sales meetings or incentives out of Florida's resorts, some are cutting back in subtler ways, LaBelle said.

"Everybody's cutting back," she added. "There's fewer breakout rooms and less food. There used to be full dinners at each quarterly meeting, but now there might just be one reception with finger food for the conference. Although most resorts will work with rate negotiations, rates in general are going up and companies are cutting back."

"This will absolutely be a concern," said Jerry Janove, vice president of sales and marketing at the Resort Meetings Consortium of Cherry Hill, N.J. "How can it not? This is a big market for the New York City financial industry, for example, and with the state of the stock market, they will be very concerned about appearances."

That trend is good news for corporate meeting buyers planning to book in Florida, since continued economic uncertainty will not only deter corporate groups from the state's resorts, but also transient business travelers.

"Florida's transient base will be picked off somewhat as well," Janove said. "With that possibility depleting, it's only natural that there will be even more flexibility for groups."

Resort sales managers are quick to note that, so far, the predominant effect of the "new economy" has been a shortened booking window, caused by hesitant corporations and the development of some new resorts statewide that offer a handful of extra booking options. But they are keeping a wary eye on the industry to see if effects in the near future will be more severe.

"There already have been casualties in terms of attrition and cancellation," said Michael Choiniere, director of sales and marketing at The Westin Innisbrook Resort in Palm Harbor, Fla. "Some properties have really been hurt, particularly in the upscale segment."

Corporations historically have pulled meetings from upscale resorts when economic times are rough, Choiniere said, so many resort sales managers have kept a close watch on stock market fluctuations and other indicators.

"Perception is reality at corporations, and if the economy turns out less vibrant than we hope, then it would be a concern," Choiniere said. "In that case, we would focus on our secondary market segments and solicit business from local and regional corporations in the Southeast, where it would be more economical to reach us because of lower airfares. But at this moment, we haven't seen it. People are still very desirous of our space and destination, and our March business has been very strong."

That said, Choiniere has no intention of reducing The Westin's rates to entice meeting buyers to consider his property in the event of a slower booking period.

"Rate credibility is the name of the game for us, and we have the amenities to warrant the rates we charge," Choiniere said. "We will let the other guys fill up their properties with lower-rate business and hold our rates firm and fair. Our strategy is to stay close to our clients who have a wait-and-see attitude about meetings, and remain at the forefront of their minds. Not all of them are thinking of canceling; some are just planning to postpone, and those resorts that are close to them will get the nod."

Economic trends that could lead to cancellations for the highest-end Florida resorts could lead to increased business for properties that aren't five-star but still have a wide array of amenities and meeting space. Unless the corporation is dead set against the whole concept of a Florida resort, less expensive properties may reap the benefits of meetings canceled from extravagant resorts and rebooked in their properties.

"I don't think that our resort will have to be overly concerned about this, but certainly the five-star resorts around here do," said Mark Schurtz, director of sales and marketing at the Radisson Resort Coral Springs. "What we'll be seeing is that resorts that are first-class but not five-star will see a bump-down effect, if the stock market is troubled. I've seen cancellations based on one day's worth of a bad stock market.