What a headache-filled process finding the right spot for a meeting is right now.
Market compression — when both hotel demand and occupancy are high — coupled with skyrocketing costs and shorter lead times are causing trouble for meeting planners, making the site-selection process more difficult than ever. What's worse, even after you've narrowed your choices, getting a timely response from sales teams and contract negotiators isn't always a guarantee.
"The biggest change I've seen is the response time," says Geralyn Krist, a global account executive for ConferenceDirect, a third-party planning firm. "Before the pandemic, if a client sent me an RFP and I was able to get it out that day, I would ask for a two- or three-day turnaround. Now, I'm asking for a week, and at the end of that week, many hotels have still not responded."
Revisions to contracts can be slow, too, says Krist, who manages meetings for clients across the agriculture, finance, manufacturing and education sectors. When hoteliers do finally respond, she's finding few are offering flexible terms and conditions. (See "Event Contract Conundrums" for tips from legal expert Jonathan Howe on how to improve contract clauses with clear language both sides can agree to.)
Kim Paine, vice president and co-owner of Site Selection Services, echoed these frustrations during a recent Northstar Meetings Group webinar, "New Site-Selection Priorities for Meetings and Events." According to Paine, compression has created a seller's market, where planners navigating the site-selection process now have fewer options and less negotiating power.
"Hotels are becoming pretty stringent about their cancellation and force majeure policies," says Paine. "Trying to get 20 percent attrition seems like you're asking for their first-born child, although it used to be really standard. Hotels are really clamping down because they know if you're not going to take [their terms], somebody else will."
Staffing and Service Levels
Research from Development Counselors International, an economic development and tourism marketing firm, reveals that top factors influencing site-selection choices include:
- Policies and contracting;
- Costs and budgeting;
- Airlift/travel; and
- Staffing/service levels.
Additional findings, published in partnership with IACC, the association for conference centers, show that only 7 percent of venue operators believe staffing in the Americas has returned to prepandemic levels. Meanwhile, 20 percent expect staffing to recover by late 2022 and 41 percent don't expect adequate staffing until 2023 or beyond.
In an effort to get a real handle on venues' service levels, more planners are prioritizing in-person site inspections. In fact, the survey shows 52 percent of first-time venue clients are only conducting in-person visits, while 20 percent are doing both in-person and virtual visits. Only 8 percent are solely doing virtual inspections when looking for the right place for their meetings.
Because venue employment can fluctuate often, Site Search & Select CEO Michael Hudson advises that, once planners have chosen their hotel, they check in regularly for updates on staffing numbers and housekeeping services.
"We've signed a contract and asked those questions about the catering and banquet staff ratio, and what housekeeping services are available," he says. But in several cases, the staffing levels had changed by the time the event took place. Asking for accurate, updated staffing numbers two to three months prior to the meeting gives planners time to mitigate staffing issues, or at least be more prepared for what they'll find on-site and allow them to tell attendees what to expect.
Another option is to seek out well-established properties that tout their tenured staffs. For example, Paine makes it a point during site visits to ask how long employees have worked at each hotel. Newer properties, she says, don't have the same loyalty and longevity amongst their staffs that legacy venues do.
Managing Higher Costs
Inflation has become a common complaint among meeting planners — and a big factor in site selection.
"To be honest, I think whatever your budget was prepandemic, you need to increase it by 30 percent," says Paine, who notes that food-and-beverage costs are among the areas that have risen the most. If not properly prepared for, meal costs can take a more significant amount out of the total meeting budget than you're used to.
For this reason, Paine is no longer waiting until after the contract is signed to get details on F&B programs and prices.
"Now on the front end, before we decide and the contract goes out, I am asking for menus and I am pulling budgets for my clients. I think it's really important to have that information upfront," she says.
In addition, Paine is adding cost clauses to her agreements, stating that meal prices cannot increase by more than 10 to 20 percent if the meeting is executed within a two-year window.
Higher room rates and hidden fees are also stretching budgets and limiting planners' options. Krist notes that she is seeing an uptick in amenity and event fees. In some cases, the latter might average 8 percent on top of an existing 25 percent service charge.
"I'm seeing more of these event fees, and when you ask the hotel, 'What is this?,' their answer is, 'It's the cost of doing business; it's trying to keep our linens in order and our tables good,'" says Krist. "That's really part of the service charge that we're already paying, but some properties have been very stringent and will not waive it."
In fact, some of her clients are refusing to pay the added fees and are exploring other options for their meetings.
Similarly, Kimberly Hutcherson, senior director of global accounts for the meetings management company GlobauxSource, says menu and A/V pricing are extremely important factors in her site-selection process — so much so that she has walked away from properties that haven't been willing to work with her on these issues.
"I know we're all out to make money," she says, "but some properties are price-gouging the clients."
Rethinking Destination Choices
These rising costs are starting to price some groups out of tier-one cities. Meetings that traditionally would have been held in major hubs like Los Angeles or Chicago are moving to midsize cities with more affordable room rates and sometimes, more availability.
"Most of the clients I work with, we will look at more than one city," says Krist. "You need to be flexible with where you're looking because your top choice might be out of your price range now or it might not yield the results that you want."
According to DCI's research, cost is the no. 1 site-selection factor for corporate and association planners, as cited by 61 percent of the respondents. But airlift also remains a major consideration, with ongoing travel delays and cancellations making it all the more important to secure destinations with easy access and numerous direct flights. In fact, 37 percent of planners rated flight accessibility as their second-most important site-selection factor.
Hutcherson, for example, says her largest client has employees in 40 states, allowing her to source venues from all over the map. However, when it comes to larger programs and incentives, where she has to bring everyone together in one place, she purposefully favors cities with ample airlift to avoid any travel disruptions.
While many planners are eager to move past the pandemic, all these residual challenges are hampering recovery and adding new obstacles to the already difficult process of narrowing down destination and venue choices. Looking ahead to 2023 and beyond, Krist advises planners to allow plenty of time to work through these issues for each event, while continuing to treat suppliers with grace and thinking creatively to develop out-of–the-box solutions that might benefit both parties.