Meeting planners are facing a perplexing challenge: How can they convey the value of their business to hoteliers when it’s so difficult to predict how many people will attend their events? In many cases, the pandemic downtime reset expectations and nullified historical data trends.
But hoteliers still need to know how many people are expected at an event, so planners are hedging their bets, underbooking room blocks and renegotiating more favorable dates for reviewing pickup numbers with hotels.
This is one of many sticking points in current negotiations. Further complicating matters are inexperience on both sides of the table and short lead times, leaving little time for haggling. So how are deals getting done? Experts advise the following to ease the process.
Rewrite Your Meetings History
As regular meetings that were on the books before 2020 are returning to organizations’ schedules, many planners are finding they can’t use data from those banner events because audience numbers have yet to return in full force.
“Our clients just want to go back to the way it was pre-Covid,” explains Meg Pisani, managing director of supplier relations for Maritz Global Events. “But we know we have to move forward and create new history, using post-Covid data.”
Industry attorney Jonathan T. Howe Esq., founding partner of Chicago’s Howe & Hutton firm, agrees that old meetings history simply doesn’t mean anything anymore, and planners are in a holding pattern, waiting to see how 2023 will shake out.
So how do planners go about rebuilding that information? Maritz is working with its suppliers to begin compiling new data in order to make more informed audience decisions for upcoming events.
Pisani has been telling Maritz’s suppliers that their data from events in 2022 and 2023 is the new history. “Groups are looking to our hotel partners to share their pickup reports for establishing a baseline for the past year,” she explains. “This is quite a manual endeavor for most hotels, and it does take time.” Meanwhile, clients are waiting to make booking decisions based on the new data, she adds, contributing to much shorter lead times.
Estimate Room Blocks Conservatively
Flexibility was the buzzword driving deals made during the ups and downs of the pandemic, when both planners and suppliers feared a new Covid variant might drive mass cancellations. Those days are gone (we hope), and agreements have tightened up again.
Are hoteliers still being flexible? “In their dreams,” Howe laughs. “The word ‘flexibility’ means ‘have an open mind and see it my way.’”
Attrition terms will likely be very difficult to change, but planners can negotiate the dates at which the numbers are reviewed, Howe advises. Contracts should have a drop-dead date when both sides have to make the final go or no-go decision.
Some planners are approaching attrition in a new way. Where once they would have blocked the maximum rooms they needed, with review dates to shift the number down if they needed to, now they’re booking fewer rooms and hoping to add as needed, without any adverse effect, Howe says.
That’s generally the approach of third-party planners affiliated with ConferenceDirect. “We’re underbooking," says CEO Brian Stevens says bluntly.
Independent planners are taking this tactic, too: “I usually encourage clients to book as few as needed and add at a later date if required,” said a planner who requested anonymity.
Bear in mind, however, that coming to terms on when and how you can adjust those numbers and still get the contracted rate can be easier said than done. And regardless of rate, the hotel might not have additional rooms to spare.
Some planners overcommit, too, says Dan Surette, chief sales officer of Omni Hotels & Resorts, but notes the planners are generally cautious. If numbers fall short, though, “at some point we’re going to need some space back,” he points out. “You can’t say you’re going to reduce the guest room block from 800 to 500 but can’t give any meeting space back. How do we resell that? But we can work through that each time we do reviews.”
Widen Your Venue Site Search
In 2022, events that had been rescheduled multiple times throughout 2020 and 2021 finally were being realized, helping to squeeze out opportunities for new business. And some of those meetings still are on the books in 2023, making it hard to find dates and space in busy markets.
To help shoehorn meetings into hotels’ narrow need dates, Pisani has had to finesse requests for proposals to fit hotels’ requirements, making them more clear, concise and transparent so they can be turned around quickly. “We have to spend time creating these special RFPs,” she explains. “We’re basically selling our client to the hotel.”
With rates and occupancy high, planners need to broaden their destination options. If the meeting must occur in a popular hub, the group will have to pay for the privilege. Considering alternatives can save both money and scheduling headaches.
“A lot of cities have holes you could shoot a cannon through,” says Stevens of ConferenceDirect. “And that’s why I’m bullish about shopping around. It’s incumbent upon all of us professionals to collaborate and to negotiate, and know where those holes are.”
Howe sees the same pattern. “It all depends on where you are looking and when you want to be there,” he notes. “Overall, demand exceeds supply for large functions, such as citywides, but second- and third-tier cities for smaller events offer opportunities.”
Prepare to Pay for Short Notice
While most of the pandemic uncertainty about meeting in person has passed, short lead times remain.
“Corporate and association meeting planners are telling me, ‘We see and crave the value of in-person interaction. We want to meet with our customers. We want to hold these meetings,’” Marriott International CEO Anthony Capuano recently told Northstar publication Business Travel News. “But they’re pushing their booking decision much closer to the meeting date, with full recognition it’s going to be more expensive.”
Maritz Global Events experienced this trend throughout 2022, when the average booking lead time was 30 to 60 days out, dramatically shorter than the past, when lead time was typically six months or more. “We have more business in the year for the year than we’ve ever had, and increasingly, it’s now in the month for the month,” says Pisani.
In addition to the added expense that can bring, the shortened process limits the time to develop strategy and design elements of the event. “No one even has time to react — you’re literally being asked to turn something around in three weeks," she laments.
At Omni, the booking window for large events is slowly improving, says Surette. “Association meetings are starting to show up, and we’re seeing the ’24s, ’25s and beyond, which is great to see because they’ve been on the sidelines,” he notes.
Still, a large volume of events are booked 30 to 120 days out, he says, and some of those are sizable.
Expect Inexperienced Negotiators
Sadly, many who lost their jobs during the pandemic left the industry and haven't returned. Stevens of ConferenceDirect paints an interesting picture of the parties who sit down to negotiate these days: “It’s almost like walking into a university and seeing graduate students and freshmen,” he notes, “but there are no sophomores, juniors or seniors.”
This situation has created problems for one seasoned corporate planner who asked to remain anonymous: “Novice venue sourcing with novice hotel sales, with novice meeting planners and inexperienced travel agents results in a lot of oversight, changes, fewer savings and lots of stress.” The company now specifies in contracts that suppliers must use experienced professionals to service their meetings.
General inexperience can result in error-ridden agreements. “The language we’re seeing in some of these contracts is atrocious,” says attorney Howe. “You can’t assume that the contract you got today is equal to what you had before. Read it very carefully — we’ve seen some little slippages put in, such as who’s going to be responsible for some damages.”
For Stevens, problems arise when inexperienced salespeople haven’t been given the authority to negotiate sufficiently and seasoned negotiators on the other side won’t take “no” for an answer. “That becomes a real conflict,” he says. “You have to bump it up to the senior level. My feeling is that we’re going to have to up the training on both sides of the aisle.”
Confirm Service Levels and Amenities
Not only are the salespeople at hotels new, but staffing challenges continue throughout the hospitality industry. According to the American Hotel & Lodging Association, staffing is expected to remain a significant challenge for U.S. properties in 2023, with hotels projected to employ 2.09 million people in 2023, down from 2.35 million in 2019.
“People say staff left because the environments weren’t good; the pay wasn’t good; there wasn’t enough runway in the careers, etc.,” Michael Massari, chief sales officer of Caesars Entertainment, told Northstar. “I don’t buy that for a second. I think it’s just that we were closed longer and we need time to let people get back.”
In response to this labor crisis — which has left some hotels without all their on-site amenities open, restaurants understaffed and housekeeping available only on request — wording about service levels is making its way into agreements.
Planners should be asking a lot of questions about what is truly up and running at the property, says Howe. The contract should define exactly what the group expects, such as housekeeping once a day, fully open eateries and breakfast available on-site. Don’t leave the definition of what your group needs open to interpretation.
When presenting the final few choices to clients, those questions and others need to have been answered, says Pisani of Maritz. “Our client needs to know before they make a decision.”