2009 PYM Town Hall Dallas: Table Three Notes
In attendance:
- New luxury hotel
- Special facility (restaurant/entertainment)
- Entertainment provider
- CVB
How can you help planners do more with less? What are some creative ways you can help them stretch their planning dollars?
3: Provide better service and assistance. If you’re more hands-on working with them, give them more products and services, it makes their job easier. In entertainment business, of course, I try to get them to spend more …
4: You need to find out what their key deciding factors are. It’s getting to know them well enough to know what they want to do. I had a SMERF [social/military/educational/religious/fraternal] group and they always wanted sponsorship dollars, which is difficult to do. But the venue has limited facilities, so we sponsored PortoPotties. It’s finding out what’s key to them and what helps the most. When I go to [my board] and say we’re sponsoring the PortoPotties, it’s a small thing to us but it’s key to the group. It’s being willing to spend enough time to see what’s really key because they have a perception about what they really want, but that may not be the most important thing to them.
3: Partnerships are important: If the two of us can work together on a client we can give them two strengths.
1: I think it’s also knowing where we can save costs or knowing where you can sacrifice within your own business model and pass that savings on to your guests. We could sacrifice Internet charges, which is huge to our clients, if the property is paying a flat fee for Internet. We can discount room rentals, within reason. Resort fees do have value to them because you’re paying for services, but you can discount them. Knowing where your food cost margins lie so I know whether or not I can give a 10 percent discount is important.
2: We can play with room rental rates and do preset tea and water to bring down [meal] costs.
1: If you know your food purveyor is running a special on a certain item, you can pass that value on to your guests, if your meeting planner is flexible getting close to your date, you can give them better value on that.
3: I was hosting a dinner and the venue said to me, “if you can have steak and salmon instead of originally what you wanted, it will cost you less” — we got a better dinner for less money.
1: That’s a good example of a catering person who knows their business.
3: The problem is the hotel person is so removed from the service departments, so I think part of being able to offer those savings entails becoming more educated on that. The old trick was trying to get joint meetings or non-competing companies sitting in two different areas but have them go through the same buffet. You could do that with everything, A/V, use the same room and tech set ups.
1: You could save by using the A/V set-up from the day before. You don’t have to pay for labor that way, so you can pass on the savings to the planner, give them the free room rental they’re asking for, etc.
2: Sometimes you can’t discount what they’re asking. The food costs us something that we can’t play with, but the games on the midway — we’re going to make money off that regardless so we can discount those.
4: We’re looking at some groups trying to do packages, saying with x amount of rooms you get this amount of meeting space. It’s not a huge price difference but the perception is they are getting more.
1: With packages they are paying less per person, getting continuous beverage breaks … I think packages are a great way to pass on savings.
3: Do you let outside A/V companies come in?
1: We try to avoid letting outside A/V companies come in.
3: That’s a huge expense that people could save money on.
1: With our meeting packages, that A/V charge is included …
2: And that includes room rentals, etc?
1: Yes. Planners see value in it, and it makes their life easier, too. But sometimes it’s a difficult sell because they want to see it separated to make sure there’s value there.
What kind of concessions are planners expecting? How can you afford to give them what they’re asking for?
1: Something they’re asking for — this is a tough pill to swallow — is no attrition.
4: Our RFPs are so small for what we host, and our attrition clauses are so basic that a lot of hotels don’t hold them to them. You’ve got more meeting space in your property than we have in our entire town.
1: We won’t give concessions unless we’re soft during that time.
3: Meeting planners ask for everything, and they expect for you to give everything.
1: What I’ve found is they just have their standard list of concessions they ask for no matter what, and they may or may not be applicable for the program they’re booking.
3: In the good old days, you used to give one comp room per 50.
1: Now people are asking for one per 20 instead of fifty.
3: They’re also saying, “I know you’re giving me your best price, but can you do better?”
4: I’m seeing people ask for one room per 12.
1: Across the board, all planners are asking for F&B and A/V discounts.
3: I know a guy that does senior tours and he only makes $10 per person.
2: We get asked about free room rental or for a free billiards table, which we can work with, depending on the group. But when they ask for F&B discounts, it gets a little tricky — we can’t give one alcoholic drink per guest. We have great packages, now, that gives them a lot. We have a mandate from corporate — they tell us what we can give.
4: What I do is I base my giving on when they want to come, not just how much business they’re bringing. We offer very few concessions for a Friday to Saturday night. If my hotels are running at 90 percent occupancy selling the rack rate, why would I give them [planners] anything? Whereas, if they want to come in on a Tuesday in January, I’m not going to give them the farm, but you probably will get a little more than you would have if you’re coming in on a Saturday night. We study the lost revenue: if hotels book two nights versus three or four-night stays. Some properties are losing thousands of dollars a year because they’re not booking the longer stays. I have to take the big picture view: if I’m not doing room nights but I put 1,000 people on Main Street … it depends on when, who and how many — because I’m concerned about generating tax revenue, too.
3: You should get them up to rebook before they leave …
1: … lock in their rate …
3: … say we’ll give you this year’s price next year.
How do you maintain price integrity without losing business or cheapening your brand? How can you compete with properties/destinations that are undercutting you?
4: I have a formula that says I can return X amount on room tax with this rate. A lot of folks don’t ask for it, but I know how low I can go. I’m not like a ski resort where I have a soft season, I have a soft season every week. Tour and travel and leisure SMERF, weddings, family reunions used to be very big, and they still are. Our business has been up every year. We’ve had one relatively slow quarter, but we’ve grown every year. My budget has not been cut, because we’re bringing in revenue. But we are looking at developing reasons why people should come back [being proactive]. We have an outstanding relationship with our city council and because of the taxes generated all citizens pay $300 less property taxes.
1: We’re an independent property, we don’t have a formula right now. We’re very watchful because we’re a very new property, we need to get people in the door. But you need to be competitive rate wise and generate revenue. We don’t have a model from corporate on how much we have to charge that’s worked for 20 years. All those properties are offering crazy rates so you wonder how they’re making any money, but they’re supported by corporate and they may not be making the money in this market, but it’s being supported by another property somewhere else.
3: At least you’re not required to make that $20 million renovation. Once one property starts, the others are required to.
1: We are the shiny new penny.
3: So you are forcing them to go through the $20 million renovation.
4: We don’t want to sell the farm, so we sell our service. People see the rate and think that’s it, but they don’t realize it’s not apples to apples. New people are always going to be coming in claiming to be just like you, undercutting your rates, but they need to understand they’re not comparing apples to apples.
1: We’re an upscale Four-Diamond resort, so we sell our service and that experience. When we’re competing against another property, we’re also selling an experience with it. People are more about getting a room and getting that meeting space for a certain price right now, they don’t realize that in order to deliver the service there’s a price tag to that.
4: It depends on market segment. Group tours used to be a huge market for us because they travel during the week. We are losing a significant portion of that business to other cities. One of our local properties quoted a tour a $139 rate and that property in the other town quoted $69 dollars a night. My conversations are encouraging them [my local hotels] to keep their price structure and not get into a price war. We are simply focusing our marketing efforts on people who are not looking for the $69 dollar a night rate because our people are looking for a better product. We’re not going negative with that message, but it’s true, we have a better product.
1: We associate with the greater [city] CVB.
4: We’re becoming known as a wine destination.
1: I think everybody tries to sell the authentic experience, but we really do think we’re different special and better. You have to feel it when you come.
2: With us, [a competitor] just opened down the street, they’re the new kids on the block, but eventually guests will realize they’re not going to have the quality and service [there] they get here.
3: You’re at the top of the heap and people know what they’re going to get.
4: One of my strongest selling points is I don’t have [chain restaurants].
Would you say it’s consistency of message in branding that has helped your destination be so successful?
4: Well we’re considering changing our brand. We’ve been doing a brand audit and it says they come for German heritage but they don’t do any of that stuff while they’re here. (asks 1) What are you going to do when you’re in town?
1: We’re going to [nature activity] and the wineries
4: We are probably one of the most restricted towns you’ll find anywhere. City council has implemented historic ordinances, enacted a ban on formula businesses.
How can you get a second chance to bid if your first quote is too high? What can you do to get them to come back for a requote?
2: A lot of times, I have no idea what they want to spend before I send back the RFP, so we have a clause that says everything can be changed, it’s not a set price. But I try to find out how much they can spend before I quote.
1: It’s hard when you have a $220 rate and they want $189, but it’s doable if you can ask for things in return, where they’re giving you something back so you can renegotiate the cost.
3: Find out whom they chose and ask if you can have the opportunity to bid next year. I try to find out how much they spend, and see if I can beat it next time. There’s so much turnover you’re usually not dealing with the same person next year, so the doors open again anyway.
2: It’s nice to know where else they’re looking, knowing the competition because you know what they’ll be quoting.
4: I think it’s really knowing them so you know what they want.
3: And knowing your limitations and the competition, being able to say we can’t give you a live baseball game, but we can give you this …
2: … video game and it’s not outside, so the weather will be nice.
1: I don’t have a clause, but I do say, “based on your needs as I understand them here’s my quote.” Do due diligence so you know how much they’ve paid and say, “If there’s anything not working for you, let’s make it work.” But they need to understand, you may be reworking the whole program to get it to the price they want. They’ve got to give something up, too, it’s a two-way street.
What happens when there’s no response? How do you reach them when it seems your RFP has gone into a black hole?
1: It’s hard when they’re not getting back to you at all.
2: I really try to put myself out there as much as possible. There’s a planner at a company down the street that’s doing really well, so I’ve taken her cookies and candy and she never called me back. I wasn’t calling or cold calling, in fact, I never got past the front desk, but she finally called and agreed to have lunch with me.
3: We have people calling on us expecting an answer, too. And I’m terrrible with them. You see the other side when you think about how you deal with solicitors.
4: For me, it’s usually sales people.
3: It makes me gun-shy to hassle people for the answer. I think I do a good job. And I think if I did a good job people will use me again. Although people say I should be calling and saying, “How about next year?”
1: I’ll follow up with people I haven’t heard back from, but after two or three times, you just have to let go.
3: I keep a dead list of people who don’t call us back. I try and direct mail 50 pieces every Sunday; I address and stamp them while I’m watching football. And I get two or three pieces of business from each mailing. I rotate my list and try to send each person on the list a piece four times a year. It’s a 20 to 1 return. It costs 40 cents — even booking a clown, you make $50 on it. I stuff envelopes, hand-address them, then I do things like write “do not open now” [around] Christmastime — funny little messages to make them stand out
1: I always get a great response from writing a handwritten note.
What about social networks?
3: Definitely the thing of the future that everyone is talking about now is social networking, but for me it’s not generating any business. Now I have 50 magicians and bands trying to be my fiend, but not meeting planners. It’s good for finding a job I don’t think it’s a sales tool yet.
1: Now I have clients that are my friends; they tap into my personal life.
3: It’s so casual, it’s too social for me. Bands are doing MySpace instead of Web sites.
1: My husband and I own a specialty cake shop and the Facebook page and Web site are linked together. I know our resort is looking at starting one.
