German Meeting Planners Enjoy Buyer's Market
<H1>German Meeting Planners Enjoy Buyer's Market</H1> Meetings buyers in Germany are cashing in on lower prices and are demanding free extra services as hoteliers fight to gain business in a resurgent market hit by overcapacity.
As demand slowly picks up after a few years in the doldrums, more midpriced hotels with meetings facilities are being built, compounding the buyer's market, hoteliers said. Reaping the benefits of a learning curve in which they saw how low hoteliers would go to win business, buyers are now ignoring official rates and are negotiating hard for the cheapest possible deal.
The meetings market in Germany is characterized not only by international events but by a large domestic meetings segment generated by the country's decentralized economic and political structures.
"Negotiations on price have become the name of the game, and everything is up for grabs," said Lesley Holzerlandt, Hilton International regional director of sales and marketing for Germany, Switzerland and Austria. "There is hardly a client who will accept our first offer now."
Although Holzerlandt said demand is starting to rise again, lead times for small meetings are down to less than three months or even within a month at times, and incentives are being organized on three to four months' notice, she said.
The number of meeting participants at Hilton has stayed about the same, but the growing trend is toward non-residential meetings, where participants arrive in the morning and leave that evening, Holzerlandt said. Meetings and incentives made up 22 percent of room nights and 28 percent of room revenue at the eight Hilton International hotels in Germany, she said.
Gerhard Klein, sales director of German-owned Dorint Hotels, said that in the past, "clients paid without asking what they were getting. Now they want to see a full package, they want to know what the services and costs are, and they demand quality."
Like Holzerlandt, he's noticed that bookings are coming on shorter notice, although room nights have remained constant. In addition, incentive groups are getting smaller, he said.
Full-scale incentives are being replaced by working meetings that include a few incentive functions such as excursions and evening events. On the plus side, however, incentives to the United States and the Caribbean are increasingly being replaced by meetings inside the country.
Best Western Hotels, with more than 120 properties in Germany, has for the first time published saver and supersaver meetings rates for low-season periods. Marcus Keller, managing director for Germany, said that client demands are growing, "especially for extra rooms, technical equipment and for a central location with good transport connections."
Best Western, which earned 18 percent of its $380 million in Germany from incentives and meetings, now has lower average meeting prices, while the average number of room nights has fallen slightly to two.
"We must get away from a fixed price," Keller said. "Hotels have a high and low season like everyone else, and we must not let ourselves be pressured by clients."
Ursula Oldenburg, communications director of German hotel company Steigenberger Hotels, also reported smaller groups, shorter lead times and a trend toward one-day meetings with no overnight stay.
"There is a price war going on," Oldenburg said. "In the past, location and quality were often the deciding factors for a meeting, but today the decision is based primarily on the price.