Meeting News - September 21, 2009 - (Page 35)

Dateline: Las Vegas By Alan Tse Las Vegas Hoteliers Lowering Rates To Recapture Missing Meetings Business Las Vegas faces a citywide surplus in room inventory, forcing hotels to loosen rate negotiations and policies and pursue smaller groups than previously to make up for lost business. “Hotels that never offered less than $300 a night are offering competitive rates at less than $200 a night,” said Scott Washburn, vice president of marketing and business development at Baskow and Associates. “Hotels have been so proactive and very understanding of the client. They have stepped up to the plate to make it easier.” “The rates are so attractive that they’re attracting a different type of customer,” according to Francine McKanna, president of PRA Destination Management Las Vegas, who noted that as a result, meeting planners who usually book rooms in lower-end hotels can upgrade their bookings to a higher-end hotel. The lower rates indicate the extent of the highly competitive environment that the city’s hotels find themselves in as corporations have the upper hand in negotiations. In the past, Las Vegas was a seller’s market, but now hotels have to be more aggressive and flexible to secure group business, said Mike Uhl, regional vice president at HelmsBriscoe in Las Vegas. The Las Vegas Convention and Visitors Association said citywide occupancy from January through May 2009 was 6.4 percent below the same period in 2008, and the number of conventions and meetwww.meetingnews.com ings held dropped 22.5 percent. The city saw a series of meeting cancellations in the beginning of the year, suffering millions in losses at the end of the fourth quarter and beginning of the first quarter, said Chris Meyer, vice president of said. Hotels that used to host largescale conventions with 4,000 attendees and corporate groups of about 300 now are hosting groups as small as 25. “Every piece of business has become important to them,” he said. LOST BUSINESS: Las Vegas feels the pinch LVCVA convention sales. That has made hotels in Las Vegas a lot less likely than before to hold off on booking smaller groups to wait to see if they can land larger business. “I would say 90 percent of the hotels have pretty much waived that,” Washburn Meanwhile, hotels are seeing a lot of last-minute bookings. Lead times have gotten even shorter and even a 60- to 90-day booking window is no longer the norm. Hotels are working with groups to loosen attrition requirements, raising the ceiling to trigger con- tractual clauses that require damages from 10 percent of a contracted room block to about 20 percent, Washburn said. Some companies have sought even further relief from attrition limitations and penalties, McKanna said. With corporate meetings conspicuously absent, association meetings have dominated Las Vegas. “That market segment has been kind of the shining star of this whole great recession that we are going through,” Meyer said. LVCVA pursued other meetings business by making a series of phone calls and coming up with 388 prospects, “people we haven’t done any business with in the last three to five years,” Meyer said. “We talked to them and now we are going to visit them face-toface,” hoping to create a personal bond with potential clients to stimulate business for the city. Meanwhile, the rate changes have put destination management companies at a disadvantage. Not only have corporate travel buyers reduced their use of destination management company services, but associations, normally less frequent users of such services, increasingly are booking the highend properties with which DMCs most often work. Destination management companies also suffer from increasingly short meeting lead times. “There’s a lot of last-minute business, and we can’t forecast like we used to be able to,” McKanna said. Corporations can negotiate additional savings and extra services, such as meeting planning assistance, from Las Vegas destination management companies. H MeetingNews 35 September 21, 2009 http://www.meetingnews.com

Table of Contents for the Digital Edition of Meeting News - September 21, 2009

Meeting News - September 21, 2009

Contents
Pricing Forecast
Newsmaker
Meetings Spotlight
Event Profile

Meeting News - September 21, 2009

Meeting News - September 21, 2009 -

Meeting News - September 21, 2009

(Page Cover1)
Meeting News - September 21, 2009 -

Meeting News - September 21, 2009