Scypinski Sees A Simpler, More Chainwide Contract Future

<B>Scypinski Sees A Simpler, More Chainwide Contract Future</B>

By Chris Davis

Meetings-contract sage Dave Scypinski, now Starwood's senior vice president of industry relations after jumping from Hilton last month, sees a near-term future of simplified and increasingly chainwide corporate meeting contracts, and a renewed focus on the meetings market by the major chains.

Scypinski, who spent more than 20 years at Hilton, finished his tenure as the vice president of industry relations. He will serve in much the same role with Starwood. Hiring Scypinski is the latest in a string of moves Starwood has made concerning the meeting market, including hiring Bob Moore and Christy Hicks as part of the management team and the introduction of its first chainwide meetings program (Meetings Today, Sept. 20).

"My forte is the group market, and Starwood wants to make sure they have it covered," said Scypinski, who started Jan. 25. "There's a shift industrywide back to group business. Starwood wants to grow that marketplace."

Any such shift of sensibility would be well-timed, as hotels of late have not been able to grow room rates at the same pace that marked past years. But there's more to it than that, Scypinski said.

"Lots of customers right now are feeling second class to the individual business travel market," Scypinski said. "They're looking for a company to show them the light. The chain that is able to keep the individual business travel share intact and yet go after the incremental revenue that the group market produces is the one that will win. That's where I see our greatest opportunity."

A key cog in Scypinski's plans to reconnect with the group market is a simplification of meeting contracts between corporations and Starwood.

While very specific contracts were appropriate in the early 1990s due to the relative lack of legal oversight that marked previous years, Scypinski said, the industry has taken contracts too far down the road of confusing legalese.

"I'm appalled at the amount of time people go through to contract a single meeting," Scypinski said. "A 24-page contract isn't necessary. Some things we're fixed on can be truncated or eliminated. Look at the contracts today--indemnification clauses, responsibility clauses for exhibits--all these things that you'll probably never have to deal with. The simple thing would to be to just make the contract work for both parties' best interest--simple but enforceable."

Scypinski argued that simpler contracts wouldn't lead to more litigation, as strictly enforced key meeting contract clauses wouldn't be removed.

"We're not going to be stupid about it," Scypinski said. "We're not going to make these contracts unenforceable. But making them easier to read with shortened clauses, as long as we still have protection--meaning attrition and cancellation clauses and a fair way of apportioning them--would be fine. Today, we've almost gone so far over with making money that we've lost sight of the customer simplicity that we should have had way back when."

Changes, he cautioned, won't happen overnight: "It's a process that's going to be evolutionary, but now we can start to make some headway."

Scypinski said he doesn't see a reversal of the burgeoning trend of hotels closely monitoring ancillary meeting revenue, which is an offshoot of improved revenue management techniques that highlight the value of the group market.

"People have to look at the overall group revenue per meeting. That's what you should be negotiating on and expecting," Scypinski said. He's also seen a shift within corporate group and meeting departments that takes the price of a hotel's meeting package into higher consideration. As corporate procurement officials wield greater power, he said, sometimes price can be the only consideration in site selection.

While such a philosophy advances the notion of multiple or volume-based contracts, or at least the designation of a hotel chain as the preferred meeting supplier, it's not always the best solution.

"The property you select based on price may not be the best deal. It may be a dog that's cheap. You have to be sure there's some quality assurance in the process," Scypinski said. "But Hilton has cut some deep contracts over the past few years that have helped us, because corporations have given us favored-nation status. It doesn't always result in a minimum-business guarantee, but when a big company tells us we're who they drive business to, we see the big spike.