Hotels: Mtgs.-Only On The Rise

<B>Hotels: Mtgs.-Only On The Rise</B>

By Chris Davis

Fewer than half of corporations have developed preferred hotel agreements specifically for meetings, but hotel chains said interest is growing. However, the different chains have a wide range of reactions and interest in doing so, while meeting buyers seek guarantees and benefits beyond cost savings.

According to a Meetings Monitor poll of 132 corporate meeting buyers, about 42 percent have developed a preferred hotel meetings program. Marriott was the landing point for the bulk of those programs, snaring more than 40 percent of the buyers who have preferred meeting contracts. Marriott was followed closely by Hilton, with Starwood and Hyatt the next most popular choices.

Despite that rating, Marriott officials said they have no interest in signing meetings-only contracts that offer the buyer an across-the-board price break. But the chain does offer other benefits when named the preferred meeting hotel.

"Marriott doesn't offer across-the-board discounts on the group side," said Mark Sherwin, director of sales products and promotions for Marriott. "There are too many variables to do that for meetings, so pricing is market by market and week by week. Many preferred deals are focused on process and access to distribution channels. For example, we placed functionality on the intranet of a corporate customer so they can send requests for proposals and meeting specifications directly to us."

Sherwin said Marriott is trying to create a preferred meetings program that would offer certain corporations guaranteed availability, but he cautioned there is no certainty the chain will ever successfully do so.

"We guarantee our top frequent travelers availability within 48 hours of the stay," Marriott's Sherwin said. "We'd like to transfer that to our very best group customers, but while it's easy to find one room in 48 hours, we can't do that with 50 rooms, much less 200. Having multiple brands helps to bring about a solution, but we haven't figured out that concept yet."

Fairmont Hotels and Resorts has seen an increase in the number of clients interested in meetings-specific programs, said executive director of national sales William Reed, but prefers to limit them to the chain's very best corporate customers. "Any hotel involved in this needs to know the customer will have a long-term relationship and fits the profile of desirable business," Reed said. "It's not feasible for every organization. There would have to be major volume across the company or at least in key markets where we need additional business. And we want to be the preferred vendor in the given market and increase market share. We have to be selective."

Bass Hotels & Resorts, however, actively promotes its meetings-only agreements to key accounts, said regional director of sales meetings and conferences Alyssa Smythe. Bass offers its clients guaranteed discounts, including attrition credit for future meetings, food and beverage discounts for multiproperty events, a better ratio of complimentary to sold rooms and a free room for the planner. In exchange, Bass receives higher levels of meetings volume.

The Monitor's respondents were all over the map when asked what percentage of their companies' meetings were directed to preferred meetings properties, without any clear trends emerging. Nearly the same amount of respondents said that less than 25 percent of their meetings were booked at preferred hotels as those who said more than 75 percent were, with similar numbers to points in between.

Sometimes, Smythe said, meeting buyers seek such additional services as standardized contracts or better specific terms, all of which are negotiable. "We're open to negotiating these programs, but it does take more time since the legal department will be involved," Smythe said. "Also, it may only be valid at our corporate-owned and managed properties."

Though cost savings are a key driver in most corporate meeting buyers' decisions to negotiate a preferred meetings hotel program, it's not the only one. Such is the case at Amway Corp. of Ada, Mich., where director of group events Craig Ardis negotiated other benefits as well as cost savings in his contracts.

"We were able to receive a higher number of complimentary rooms and a lower rate, but also other service-related concessions, such as turndown service, that may not be as important but that we wanted to have," Ardis said.

The meetings preferred hotel program at Amway, in fact, has been successful enough for the company to begin wrapping transient travel into its purview. "Our meetings program has been more managed than the transient side," Ardis said. "We'll bring both together to leverage the volume. Some of our transient travelers, for example, stay at Hyatt but aren't tracked as Amway travelers, though our meeting attendees are."

Ardis has identified both individual properties and chains that host both transient and meeting travelers, and will narrow the scope of preferred properties in order to bring larger volumes to the negotiating table.

While cost savings was the primary benefit of the preferred hotel program for meetings, and the impetus behind its expansion to transient travel, Ardis will continue to negotiate other service-related terms.

Fairmont's Reed agreed that price was not always the exclusive driver of client motivation for the development of such a program, citing the desire for standardized agreements. That can be a driver for those buyers without such agreements to develop them, as well.

"We have neither a meetings nor transient preferred hotel program, but we have set that as a goal," said Leslie Veenhuis, meetings and events manager at Kinko's Inc. of Ventura, Calif. "We're interested predominantly because of cost savings and economies of scale, and also some guarantees of consistent customer service and expectations on both sides of the house."

Veenhuis said any preferred hotel program would wait until the company completes construction of its in-house data-tracking module.

"We have to figure out what we would want to get from the hotels and what information they would need from us," Veenhuis said.