Meetings industry suppliers discuss ’state of the industry’ challenges, solutions
By Kristi Casey Sanders
More than 40 representatives from hotels, convention and visitors bureaus (CVBs), special facilities and other meetings industry suppliers recently gathered in Atlanta to discuss current economic challenges and potential solutions at the Plan Your Meetings (PYM) Town Hall: State of the Industry luncheon.
The general consensus was that hotels no longer have the upper hand in negotiations with meeting and event planners. “Association business is booming, but corporate business won’t commit,” observed Jessica Methier of the Renaissance Montgomery [Ala.] Hotel & Spa. Representatives of properties spanning from Colorado to Florida commented that corporate and third-party planners are playing a waiting game in order to secure deeply discounted rates. Michael Baumuller of The Kiawah Island [S.C.] Golf Resort said, “They know you need the business, so they will offer to pay a certain rate, take it or leave it.” And, some hotels said they would take it, hoping to make up revenue in other areas, such as food and beverage.
For the majority of suppliers, cancellations are a huge challenge. “Corporate business is canceling because it is cheaper to incur cancellation costs than to pay for the meeting,” said Perry Tarleton from the Crowne Plaza Atlanta Ravinia. Shannon Johnson from the Renaissance Ross Bridge Golf Resort & Spa in Birmingham, Ala., said, “There have been more cancellations this year than ever. We’re having to impose stricter rules and are in fear of severing relationships by doing so.”
Jackie Davis of the Atlanta CVB observed that some corporate groups are combining events. “Rather than having one meeting for the East Coast and another for the West Coast, they’re having one meeting in the Midwest.” Groups also are shrinking in size, bringing only people at the supervisor/manager level and above. Other reps reported that many groups are requesting hotel rooms for VIPs and making everyone else commute, or only booking meeting space. Many corporate groups are transitioning to having in-house only meetings or substituting Web conferences for face-to-face gatherings.
The corporate market wasn’t the only one showing signs of strain. “Emotional events [e.g., weddings, bar mitzvahs and family reunions] are not slowing down, but the question of ‘what’s included?’ is asked more and more,” said Cricket Russell of Atlanta’s Country Club of the South. Representatives from several special facilities commented that although emotional events haven’t cancelled, their guest lists and budgets are shrinking. Michael Baumuller said, “We’re seeing family reunions staying in the U.S. instead of going overseas, due to the poor exchange rate and the price of fuel.” The weak dollar also has been attracting business and visitors from Canada and Europe, who feel as if they’re getting a bargain at America’s luxury hotels.
Some representatives considered the “luxury” label a double-edged sword. They voiced concern that planners would identify the label with a price point that was prohibitive, or feel like booking a luxury property during a perceived recession would be frowned upon. One Four-Diamond property reported that her rates were being undercut by a Five-Diamond property, desperate to attract business. On the other hand, Dawn Bryan of Spa Sydell pointed out that during recessions, spas do very well. People are working so hard, she said, they want to treat themselves afterwards. JoAnna Eisler of the Aspen [Colo.] Chamber Resort Association considered her destination’s reputation a plus: “People never considered Aspen a drive-in market for Denver before. But they will now, because they need the luxury that Aspen has … and they’re not going to fly to Mexico to get it.”
By all accounts, only 2008 bookings are soft. Special facilities, service providers, caterers and hotels reported that 2009 and 2010 bookings are looking strong. Soaring gas prices, uncertainty about the economy and election year anxiety were cited as possible reasons for corporate reluctance to spend money in fourth quarter 2008. Jessica Methier spoke for many at the gathering when she said, “I suspect this will subside once the elections are over.” Kenny Zail from Making Teams Rock, added, “I compare this to the aftermath of 9/11. Everyone panicked. Also, there is a lack of positive news; everything is negative — [that] affects people’s views of the world [and the] economy. Eventually, everyone will adjust to these shifts and things will be normalized again by mid-2009.” Fernando Saenz of Atlanta’s 755 Club at Turner Field was not so sure: “[Companies] were hiding behind 9/11 until the bitter end. I think now [they] are going to hide behind the ‘recession’ and use that as an excuse to not spend money.”
Not everyone has stopped spending. Those who do have money, though, want more bang for their buck. “The solution is to bundle your services,” Dawn Bryan said. “Don’t undervalue yourself. Don’t cut the cost of your product, just add something to it so people can see how they’re saving money.” Aishah Pacheco of the Robert Ferst Center of the Arts at Georgia Tech agreed: “You don’t want to keep slashing your rates. You don’t want to be known as ‘that cut-rate shop.’”
Properties and special facilities across the board said planners were requesting all-inclusive rates. “Often, I have people [tell] me how much they have to spend per person rather than a total budget,” said Lori Harbin of Zoo Atlanta. In order to offer more without slashing rates or services, many of those in attendance said they are forming strategic partnerships with local hotels, restaurants, attractions or CVBs in order to offer groups added-value packages.
In these uncertain times, relationship-building and old-fashioned customer service skills are the best way to retain business. “It’s going to cost you twice as much to find new business than it is to keep an existing customer,” said Dennis Seeber of Fun-tastic Promotions. Shelly Davis from Florida’s Innisbrook Resort & Golf Club said she always calls planners, even if she doesn’t get the business, “just to say thank you for the consideration.” At the Crowne Plaza Atlanta Ravinia, there is a mandatory two-hour response guarantee. “If the client doesn’t hear back from us within two hours, they are given a 5 percent discount,” Perry Tarleton says. Representatives found that special touches such as thank you notes and personalized pillow gifts make big impressions on clients.
Melissa Forte from the Emerald Coast [Fla.] Conference Center stressed the importance of training staff and making sure that the on-site experience groups have is a positive one. “That’s really where you see the return,” she said. “It’s not just your new marketing and new sales dollars, it’s the education and the continuing support of your internal customers to make your paying customers happy.”
Maintaining consistency and quality of service can be a challenge if the company has instigated a hiring freeze. Some suppliers reported that when people leave, their job responsibilities are divided among existing staff. Convincing executive management to invest in infrastructure before customer service suffers and drives away clients was a big concern for some in attendance.
James Parker from the Renaissance Concourse [Atlanta] emphasized the importance of going back to the basics to bring in new business. “Stay focused and be pro-active,” he said. “Stick to the elementary principles of sales: Make your calls, be visible and direct. And work with your CVB.” Leah Hellams of the Gwinnett County [Ga.] CVB said the representatives at her table discovered that concentrating on a 40-50-mile radius is the most productive approach. “Get your backyard business,” she said. “Offer gasoline incentives to get them in.”
Technology is another tool suppliers are using to attract more group business. Dawn Bryan reported e-mail campaigns sent out through strategic partnerships were getting better open rates than her company’s typical “sale” e-mails. Fernando Saenz and 755 Club colleague Cynthia Phelps said almost all their 2008 marketing budget went towards developing a virtual tour and optimizing their Web site. Planners who once balked at driving into downtown can see the entire facility — from parking lot to private ballpark seating to banquet and exhibition space — without leaving their desks. And, thanks to optimization efforts, traffic to their site has nearly doubled. “It’s definitely paid off,” Phelps said.
Not every solution is high-tech, however. Cheryl Dacey of the Atlanta Event Center at Opera said that getting involved with high-touch programs, such as the ones offered by Plan Your Meetings, was key. The day before the PYM Town Hall meeting, the representatives had exhibited at a PYM LIVE Event, where the ratio of planners to suppliers was three to one. “The event was great because we got to meet planners [face to face],” Dacey said. “This will make the first call ‘warm’ instead of ‘cold.’ And the opportunity to meet other PYM partners here is great, because if we build these relationships, and we are not able to accommodate an event, we will know who to pass the business on to and [they can pass groups] to us.”
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