Meeting News - April 7, 2008 - (Page 31)

Calculating ancillary spending: Help or hindrance? friend of mine was planning an event that included booking 50 rooms per night at a chic hotel in Manhattan. Knowing that I am in the habit of reviewing hotel contracts, she asked me to have a look at the one provided by her supplier. Room rate? Check. F&B? Check. But when I got to the cancellation clause, the penalty looked astronomical (even for New York City rates). As I crunched the numbers on the actual per-night sleeping room rate and other charges, it was clear that there was something else built into the cancellation clause that she was not contracting for. I had to dig, but eventually I found the culprit: ancillary charges. A What are ancillary charges when it comes to hotel revenues? At our 2007 Successful Meetings University – California event, David Peckinpaugh, president of the San Diego Convention & Visitors Bureau, gave us an insider’s guide. He defined ancillary charges as those from the following hotel outlets: q Restaurants q Lounges q Gift shops q Recreation Join me… Successful Meetings University – Colorado Date: June 16 – 18, 2008 Vail Plaza Hotel & Club Exhibitors 4 Eagle Ranch • Aspen Chamber Resort Association • Beaver Creek Lodge • Beaver Run Resort & Conference Center • Breckenridge CVB • The Brown Palace Hotel & Spa • Colorado Mountain Express • Colorado Springs CVB • Denver Metro CVB • Destination Colorado • Estes Valley Resorts • Fort Collins CVB • Keystone Resort & Conference Center • Park Hyatt Beaver Creek • Sonnenalp Resort of Vail • Telluride Tourism Board • The Pines Lodge • Vail Plaza Hotel & Club • Vail Valley Chamber & Tourism Board For my friend, the hotel had included in the cancellation penalty nearly $10,000 in such expected revenues—for a 170-room contract. Ouch! But ancillary charges present an interesting dilemma for planners, and not just in cancellation charges. Some savvy planners have turned the tables on this subject, calculating the ancillary spending at their events and using that same category of charges to their advantage in the negotiating process. Especially when it comes to client programs, where the sales staff might pick up an expensive dinner tab, or a show that includes sponsor events that are traditionally hosted at the hotel—this category of expenditures can be significant. But planners shouldn’t expect to have their cake and eat it, too. If you can negotiate rates and other line items by leveraging ancillary spending, you should expect some additions to your cancellation clause based on these charges, too. Next month, at our Successful Meetings University – Hawaii event, industry attorney John Foster will Planner Emily Lewis help us through this and other issues surrounding cancellation and attrition for meeting planners. Register now to qualify to attend (at meetingnews.com/smu). As for my friend, she flagged the charges based on the hotel’s expected ancillary spending and insisted upon their removal from her contract before she would accept the deal. The hotel acquiesced. In the end, it would have been a non-issue because she did not have to cancel. But, as all meeting planners know, better safe than sorry. r —Emily Lewis Emily Lewis plans meetings for meeting planners—no easy task! She is the conference manager for MeetingNews and sister magazine Successful Meetings, organizing multiple Successful Meetings University events across the country each year. Destination Update: Vail, Colorado If you thought winter was the best time to plan a meeting in Colorado, think again. Summertime offers sun-drenched afternoons, blooming meadows, and—oh yeah—some of the best festivals and sporting events of the year. • Teva Mountain Games (June 4-8) • Bravo! Vail Valley Music Festival (June 25-Aug. 2) • Vail Summer of Jazz (June 25-Sept. 1) • Vail International Dance Festival (July 27-Aug. 10) • Colorado Stage International Cycle Classic (Aug. 22-24) Groups can tap into all of these and enjoy the other amazing attributes of this mountain escape: golf, hiking, shopping, fine dining, and more. Vail is becoming even more posh these days, with the Four Seasons Resort Vail opening in 2009 and many other properties upgrading facilities, services, and amenities. Photo: Michael Idczak Visit our Successful Meetings University Website, www.MeetingNews.com/SMU, for the latest information about these programs, and feel free to e-mail any questions about the events to emily.lewis@nielsen.com. We’re expecting to hear from you! www.meetingnews.com April 7, 2008 MeetingNews 31 http://www.mimegasite.com/mimegasite/events/marketplace.jsp http://www.meetingnews.com/smu http://www.mimegasite.com/mimegasite/events/marketplace.jsp http://www.MeetingNews.com/SMU http://www.meetingnews.com

Table of Contents for the Digital Edition of Meeting News - April 7, 2008

Meeting News - April 7, 2008
Contents
What’s Up @ MeetingNews.com
Successful Meetings University
Advertisers Index
Live from the Forum

Meeting News - April 7, 2008