Let’s face it: This year will be tough for meeting planners. Not only are we in a seller’s market, but planners will also face tighter budgets, higher meeting costs, and less bandwidth.
So, what happens when an unstoppable force (supplier price increases) meets an immovable object (meeting planning budgets)?
Meeting planners are forced to become more strategic and creative in their sourcing approach. Here’s how you can leverage the resources you already have to successfully source in this new climate.
1. Shop the Clearance Aisle
If you want the best deals and can be flexible, wait to book until 90 days before your meeting dates. After aggregating 1,000-plus hotel sales promotions in 2017, we found that hotels send out promo offers 89-193 days from the arrival/departure dates.
No matter the offer, what these hotel promos really mean is that the property is behind pace or needs to fill rooms. Take these incentives as a sign that you now have the upper hand in negotiations, a rare reprieve in today’s climate where suppliers typically hold all the leverage.
We don’t recommend this approach if your meeting is mission-critical to your organization, since there is no guarantee you will discover that perfect match for your objectives. But if you want to be an opportunistic buyer, waiting 90 days before your meeting will maximize your chances of finding massive cost savings.
2. Think and Source Competitively
If booking a top-tier city is a priority, you can’t wait until 90 days out—not even close. The best rates, dates, and space in 2018 have already been booked. And 2019 and 2020 don’t look much better.
Here’s why: Most of the recently built and future hotel supply are short on large ballrooms and event space. As a result, your choices are limited. Planners for large meetings have to race to beat the competition for top destinations like Chicago, Orlando, and Las Vegas.
Here are some tips that can help:
• Shop and source early. We can’t stress this enough. High group demand means high meeting space demand—book it before someone else does. The earlier you source space, the more flexible your pricing will be. Our data shows that almost one-third of hotels decline a booking because they don’t have the space availability. And, based on the pipeline for 2019/2020 hotel construction, there will not be a lot of new hotels adding meeting and event space in top-tier markets. So, start searching now for your 2019/2020 events.
• Give second-tier markets a second look. Not all the good space is taken—there is available space, but mostly in markets that you may not have initially considered. While every planner loves cities like San Diego, San Francisco, and Miami, second-tier cities are where you’ll find attractive affordability and fresh, new attendee experiences. Plus, many of these destinations offer ample hotel meeting space for large groups, great weather, good air connectivity, a great après-meeting scene, and affordable rates. Attractive options include Aurora, Colo.; Kissimmee, Fla.; San Jose, Calif.; Fort Myers, Fla.; and San Antonio, Texas.
3. Sell the Value of Your Meeting with F&B Actuals, Not Minimums.
Because supplier strength is at an all-time high, until you have a signed contract, you’re still competing with other planners for your desired space. The best way to convince the hotel to choose you over another group is to prove the value that your organization can deliver. Most groups simply offer food and beverage minimums, but F&B actuals are much better for conveying your value to the hotel’s bottom line.
We surveyed more than 250 events and found that meetings exceed their F&B minimums on an average of 40 percent.
Instead, focus on these metrics:
• Total revenue per occupied room
• F&B spending per square foot of meeting space used
Hotel revenue managers and sales directors use these benchmarks to objectively compare groups and gauge which is the most profitable. Before sending out your next request for proposal, consider how hotels value total spend, F&B spend, and the relationship between F&B spend and meeting space use. Leveraging this information can get you the best possible deal for your meeting and is critical in conveying your meetings value.
This year is looking to be a tough one for meeting planners. The pressures and unrealistic standards forced upon you will likely continue. However, with the right strategies and data, you can maneuver through the setbacks and still book with confidence.
Paul Zettler is chief financial officer of Groups360, which provides sourcing technology for meeting planners.