HSMAI Marketing Review August 2009 - 26

Strategies for Saving Meetings Business H OT E L I E R S I Recognize and acknowledge your customer’s fiduciary responsibilities. Approach negotiations in favor of long-term relationships rather than short term hard lining. I Consider how payment of a large attrition fee might impact the client. Huge damage fees might bankrupt that association or corporate customer. I Adjust rates if they are not in line with what you are offering elsewhere. Especially for repeat customers, offer a rate adjustment before they ask. I Offer creative ways to pare down F&B or some other expense, yet maintain a good guest experience. I Though you may be entitled to collect full damages, consider instead room block reductions, lower rates, deferring damages for future business, and perhaps a payment schedule. I If you must cut services or staff, don’t keep it a secret. Be up front with customers about what to expect onsite. I Be mindful that hotels and planners want the same end result—a memorable experience in a well-serviced and managed property. A satisfied group will fulfill its commitment and return again. M ESSAG ES H OT E L I E R S S H O U L D G E T T H RO U G H TO P L A N N E R S I tract just for meeting room rental. This provided her more flexibility because she didn’t have to worry about a heavy penalty if she contracted for 50 and only 25 attended the event. She was so happy with our solution that she brought the same programs back for the following year, and we will work with her again for three more consecutive years.” Mitigating Cancellation Pain There are plenty of stories about the wrong way to reach new agreements, such as the association planner who sent an email notifying general managers of all hotels contracted for a citywide meeting that they needed to lower their room rates. During the recent swine flu scare, reports were rampant about organizations using the scare as an excuse to cancel meetings when the true reason was an expected low attendance or worries about negative perceptions related to a program’s cost. Hoteliers say too many event planners wait until the last minute—maybe two or three weeks out—hoping their meeting will go off as expected. When the hotel gets the bad news with such short notice, it doesn’t have enough time sell room inventory elsewhere, and frustration occurs all around. Hoteliers complain that many planners don’t understand they don’t like to collect attrition fees any more than they like empty beds. And there are incidences of planners wanting hoteliers to re-negotiate contracts for events four or five years away, based on today’s market conditions. On the other hand, planners complain that some property managers aren’t willing to work with them to save or re-style contracted business that’s in jeopardy. Or they demand the damages contracts allow them, instead of considering more palatable solutions. Other hotels may be reluctant to lower a group’s rate, even though the prevailing market rates are much lower than those in the contract. HSMAI MARKETING REVIEW • AUGUST 2009 Communicate often with your hotel reps about your program’s status. Don’t wait until a couple of weeks prior to the event to tell them you can’t fill your block. Surprises aren’t welcomed and alternatives to paying damages may be impossible. I If senior management mandates a cancellation, or you seek changes in your contracted arrangements, don’t send an email message. Make a phone call—or best—inform the hotel in person of your situation. I Do your homework—prepare a package that shows what you are doing (such as promoting attendance) to hold up your end of the contract. And be ready with alternatives to canceling, like moving the meeting to another date, adding business, etc. Don’t just demand lower rates. I Know that hotels usually don’t have any legal obligation to write off attrition or damages. If you do ask for this, be ready to give back something in exchange—like future business. I Understand your hotelier’s fiduciary responsibility to its owners. Be informed about the industry’s status and challenges. I Pay attention to what’s going on in your hotel’s marketplace and the rates they are offering online for comparable dates. If the transient room rate is lower than your group rate you have the right to request an adjustment. I Manage commitments carefully and be conservative in establishing room blocks. I Be prepared to give something back to your hotel—like meeting space or VIP suites—in exchange for their concessions. 26

HSMAI Marketing Review August 2009

Table of Contents for the Digital Edition of HSMAI Marketing Review August 2009