A lack of new supply will push rates for high-end executive and board meetings higher, but budgets still are less of a concern for them than for other types of corporate meetings, despite shareholder scrutiny.
The types of hotels that usually host executive and board meetings will be one of the last segments to see an influx of new space to mitigate the increased room rates predicted for the new year, said Greg Malark, COO for Scottsdale, Ariz.-based site selection firm HelmsBriscoe
(Meetings Today, Sept. 10)."They will be shopped, but the hotels that provide that level of service and have that level of quality and that reputation will be the ones that continue to get that increased rate premium next year, because they're not building more of them. They're not nearly as affected by new supply. Upscale city-center luxury hotels are probably the last group of hotels to be affected by new supply," Malark said.
PricewaterhouseCoopers hospitality and leisure group principal Bjorn Hanson said that most new growth will be in limited-service hotels, "not really the hotels oriented for these types of meetings. Some meeting planners are having difficulty finding the right supply at the right time, which is why rate isn't as much of an issue as it might be at other times."
For executive-level meetings, hotel service levels often are less of a concern than are budgets. However, the approach to budgets can differ greatly among companies.
"We see companies taking diverse approaches to board meetings," Hanson said. "Some, especially those companies that have had very substantial growth and earnings, are splurging on board meetings. They're going to more exotic locations or expensive hotels. They're looking for unusual and special and often very costly entertainment. On the other hand, there are many companies trying to set a tone that the economy seems to be slowing and they have to be cautious with types of spending, so we're seeing board meetings being less extravagant than they were a year ago and maybe being held in a corporate office. We see much more diversification in the planning and budgeting of these meetings than I ever remember in my career."
Others see less of a sense of caution around budgets.
"We don't see a great deal of budget sensitivity for these meetings," HelmsBriscoe's Malark said.
"Not only do I see more executive meetings, I see more money spent on them to ensure flawless execution," said Catherine Chaulet, senior vice president of events at chauffeured transportation firm BostonCoach. "I see more spent on these meetings so that everything goes well and to address any last-minute changes."
"What's really important in these types of meetings is that they receive a top level of service," said Kristina Chaplin, director of group sales for Fairmont Chicago. She cited such value-adds as club lounge and fitness center access. "Attendees at these meetings are all well-traveled, so these are all things that they are looking for and are used to."
High-end meetings still are under public and shareholder scrutiny. Some executives now look to keep meetings near company headquarters, for example, to keep from appearing extravagant.
"We have not seen significant downgrading. We have seen a tendency in some companies to avoid overtly leisure destinations. They have become serious working meetings and they want to have that persona," Malark said. Meetings "really reflect the attitude of the company. Where they have a board meeting sends a signal to their constituents."
Many companies keep meetings in business centers, like New York and Chicago. They are still going to "full-service luxury hotels," Malark said.
"They are generally staying closer to their offices," Fairmont's Chaplin said. "That's why we're forecasting an increase in them—because of the amount of corporations based here in Chicago."
"Budgets are always a concern. People want to do right by their shareholders," said Frank Sandro, WaterColor Inn and Resort's regional resort sales manager. Based in northern Florida, the resort has hosted board of directors meetings for companies based in the Southeast and Texas.
Several suppliers noted that executive and board meetings appear to growing longer, with fewer one-night stays and more two- or three-night events. WaterColor's Sandro said this timeframe was due to the executives' schedules. "Their time is so valuable, but their time together is valuable as well," he said.
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