HSMAI Marketing Review August 2009 - 25

Meetings cancellations and contract adjustments are a familiar and painful piece of the current business landscape—called by most analysts the worst year on record for the domestic lodging industry. But hoteliers, planners, and attorneys say the associated economic pain of lost revenues often can be mitigated with open communication and a willingness to acknowledge the other side’s fiduciary responsibilities. T he meeting scheduled for six months out was under discussion by representatives of an eastern financial services company and the Manchester Grand Hyatt San Diego. The customers had a PowerPoint presentation in hand to make their case to the hoteliers about their piece of business that included about 1,400 room nights. These stakeholders went into great depth,” says Jack Horne, Hyatt’s vice president of North American sales, “to explain their situation. Surveys had been sent to attendees of last year’s meeting to ask if they would return for the 2009 program. What they learned from survey responses was that the company would not be able to meet its contractual agreement with the hotel because the program would attract only about 50 percent of the attendance they had expected at the time the contract was signed. They knew what revenue they would lose if they held the meeting versus what they would lose if they cancelled it altogether, including attrition payments,” Horne continued. “The stakeholders flew across country to ask for our help with their economic exposure—to either reduce the attrition clause or lower costs, and they opened up their financial statement to us.” “We discussed several options open to company—hold the meeting with the smaller attendee list, rebook another date, or cancel and forfeit the attrition fee. We were so impressed with their preparation and their willingness to meet with us face to face that we ended up offering them a lot of concessions,” continued Horne. “The result was that we moved the entire program to May of 2012 and the company booked other business with us for 2010 and 2011.” Buyers Seek Flexibility Tori Kaplan, director of corporate citizenship and events for CSX in Jacksonville, said her company has leaned on standing relationships with hoteliers this year, as they’ve cancelled or scaled down their events. “It’s helpful when you can work with properties you’ve used on a repeated basis, particularly when times are bad,” she says. “It’s necessary for both sides to have a clear understanding about the bottom line for the other party. So I am very appreciative when my hotel contacts do their homework, and they know what’s going on inside my company. And we must understand their position as well.” Kaplan said she has re-negotiated several event contracts, including one cancellation for a meeting of 600 top industry leaders. She was able to retool by booking two events equaling the same number of room nights within the year. In another instance, she re-booked a convention center contract for a different date. In New York City, Ginger Mahmoud, director of sales for Benchmark Hospitality’s Downtown Conference Center, said she has worked with several planners to save meetings when they were ready to cancel programs due to low attendee count and budget challenges. “We were working with a new client who booked six meetings with us all at a per person, full DMP rate,” says Mahmoud. “Her first meeting had less than half of the contracted number of attendees. She was so upset, fearing that her company would be held responsible for the half that didn’t show up, that she was ready to cancel the other five meetings—thinking she had contracted way too high. By looking at the big picture, we put together a contract addendum that allowed her to revert to a la carte rate, and con25 200142414-001/PM IMAGES/GETTY IMAGES; 200509906-001/PETER CADE/GETTY IMAGES AUGUST 2009 • HSMAI MARKETING REVIEW

HSMAI Marketing Review August 2009

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