Hotel Meeting Space Tightens In Chicago

Carole Berke's recent negotiations on behalf of a client seeking hotel meeting space in Chicago were amicable. The problem: No hotel in Chicago could accommodate her for two years. She was forced to scrap her plans and look to a smaller-market city for space.

"The market is certainly tighter for associations, particularly in the top conference cities like Boston, Chicago, Washington, D.C., and New York," said Berke, president of Carole Berke Events, a Maryland-based company specializing in conference management throughout the United States and Canada. "There is very little negotiating room in the bigger cities."

The need for meeting space continues to escalate in Chicago, as it has in most major U.S. cities. Rates are mostly uniform: "My clients who travel to comparable cities are paying meeting room rental fees, usually close to what we are charging," said Jane Kearney, director of sales and marketing for Hampton Inn & Suites Chicago.

The heightened demand for meeting space has changed the negotiating climate within the Chicago hotel industry, as it has similarly with other major cities throughout the United States. Before, planners held the upper hand in negotiations as hotels were forced to actively solicit business. This has changed. Demand for meeting space in major cities is sometimes outpacing supply.

As demand has shifted, negotiating leverage has moved to the seller. "We were grateful to book anything," after 9/11, said Kearney, "and very willing to offer complimentary meeting space, just to contract a block of rooms. Negotiations were rather one-sided. Now, there is greater understanding by clients that complimentary space no longer is a given."

The burgeoning requirement for corporate meeting space is even affecting city landscapes. Chicago is building a significant amount of new hotels to keep up with demand. McCormick Place, Chicago's preeminent convention and trade show facility, already boasts 2.2 million square feet of exhibit space and is in the process of adding another 700,000.

Forecasters expect the high demand for meeting space to continue. Hotels offering meeting space in cities like Chicago, New York, and Las Vegas will enjoy an infusion of corporate dollars, while the planners will be busy negotiating space for their clients. The synergy that will be created is important for the industry as a whole. "We are a two-way street," said Jeffrey Weinman, a principal at Summit Event Management, Inc., in Schaumburg, Ill. "The goals of the supplier and the planner are the same: clients getting best service, hotels getting business."