Despite talk of the recession being over, controlling event expenses remains a top concern for meeting professionals. At the 2010 PCMA Convening Leaders conference on January 12, Plan Your Meetings led a “Making Cents” roundtable between planners and suppliers designed to help them discover win-win solutions to current budgetary challenges. What follows is a summary of their findings.
Being a buyer’s market, many hotels are waiving attrition. But for associations that book many years in advance, it continues to be a concern. Solutions:
- Put review dates into hotel contracts at six months and three months out that allow the group to release a certain percentage of rooms back to the hotel if the block is slow to fill. “The only drawback is if the group is notoriously late, you may not have the rooms,” said one participant. “But for those of you who want to avoid attrition, it does give the hotel a little bit of control, and they seem to like that.”
- Use attrition clauses and formulas proposed by John Foster Esq., CHME, which you can find on the Convention Industry Council Web site. Among his tips, which were echoed at the roundtable: Make sure your group receives credit for unused comps; state in contracts that all rooms occupied in the hotel by your group’s attendees will count toward your group’s pickup to reduce attrition damages, regardless of rate paid; and to base damages on lost profit, not on 100 percent of the lost revenue.
- Negotiate for no attrition with a caveat: If the hotel receives another verifiable inquiry that can guarantee the rooms for those dates, your group will be given the option to amend the contract and agree to an attrition percentage in order to guarantee the rooms first. “That seems to really work with hotels,” a meeting professional commented.
Contract negotiations/buying power
When nonprofit organizations must negotiate with for-profit entities, it creates tension, especially when both sides are trying to control costs. Advice attendees had for planners included the following suggestions:
- Use multiyear contracts as leverage. “Our company brings business to the same hotels every year,” one planner remarked. “If you can put a 25 percent reuse of [attrition fees] towards future business, then the hotel is going to see [you as] a large piece of business and you can take that attrition and [apply] it towards that meeting.”
- Consider using a third party like Experient or HelmsBriscoe that has buying power and the leverage to negotiate better concessions and pricing, especially if you have a small group that hotels tend to overlook.
- Work with national, rather than local, sales managers if you’re holding meetings in multiple cities, so they understand the big picture of what your business is worth.
- To assure a continued level of customer service, agree to a multiyear contract with the condition that after three years, if attendee satisfaction is not at 80 percent or higher, the group can leave the contract with no further explanations needed.
The underlying message planners had were to get all the costs up-front so there’d be no surprises on-site. Cost-containment strategies included:
- Write into the contract that the group will not be charged any fee that is not “spelled out” in the contract.
- Look at the total meeting spend or per-person inclusive rate rather than getting stuck on how much individual items are costing.
- Ask venues and properties about value-added perks that are available to the group at no additional cost.
- Go green and communicate the value of sustainability initiatives such as eliminating paper, using digital handouts (or reduced size programs) and getting rid of water bottles and shuttles. “But consider how that impacts your marketing efforts,” one attendee cautioned.
- Even if you have a multiyear rate locked in, slightly raise the cost of registration from year to year so that it doesn’t jump suddenly when the rates do.
- Some cities and convention and visitor bureaus have money to invest in association events because it generates a positive economic impact for the community and local hotels, etc. Ask convention centers and CVB contacts if their destination has access to funds to invest in your group.
- Avoid first-tier cities in favor of regional destinations and more centralized locations (also helps reduce transportation and shipping costs).
- Avoid labor union hotels and facilities.
- Ask CVBs about value-adds for your group, such as volunteer staffing and marketing assistance that may be available at no charge.
- Use online registration and evaluation sites. Go digital as much as you can. Make registration bags optional (ask registrants to tell you their preferences for digital vs. printed materials and whether they’ll need a bag when they sign up).
- Educate staff, exhibitors and speakers about what things cost, how facilities work and what they charge so they can help you stay within budget.
- Send out quarterly RFPs to keep suppliers honest in their quotes and help build relationships.
- Ask for per-person inclusive pricing.
Among the ideas for controlling audio/visual expenses:
- Use the same A/V company year-round. Secure additional discounts if they travel with you.
- Tell in-house A/V companies that you are going to get quotes from outside vendors, as well.
- Piggyback on the room and A/V set-ups of the groups meeting in the space directly before and/or after you.
- Put a flat rate into the contract.
Food and beverage
Several creative food and beverage cost-savings ideas were shared, including:
- Consult with the chef to create a custom menu for your group that fits your budget. “Chefs love to be creative because they do the same menus day after day,” said a cruise line representative.
- Purchase coffee breaks and Continental breakfasts by item instead of by person.
- Put the least expensive items (chips, vegetables, fruit, etc.) first on the buffet line. “By the time they get to expensive things, they don’t have any room on their plate,” explained one supplier.
- Instead of evening banquets, hold receptions with heavy hors d’oeuvres.
- Request no F&B price escalation in return for committing to multiyear contracts.
- Use water stations instead of purchasing bottled water.
- Instead of sodas, ask for iced tea and lemonade.
- Give staff breakfast coupons for $10 so they can have a full breakfast or coffee, depending on their preference. “That way, it goes to the master account and you only are paying for what [they consume] instead of doing a buffet or full breakfast,” a planner explained.
- To control alcohol (and liability) costs, some groups have stopped offering open bars, instead offering a cash bar or eliminating alcohol entirely. Groups that still want alcohol at functions have started issuing drink tickets, offering local beer and wines with only one specialty drink or using facilities that are BYOB and purchasing alcohol from liquor stores.
- Use boxed lunches; don’t feed exhibitors.
- If meeting minimums is an issue, see if exhibitors will sponsor tickets for attendees, so they can redeem the tickets for lunches.
- Ask for an all-inclusive rate. “I tell the chef, ‘I only have $25 per person and that has to include a drink ticket,’” one planner said.
Preserving and enhancing attendee experience
Although less resources are available to planners, attendee expectations remain high. Here are some techniques and tips roundtable participants had for meeting expectations without breaking the bank.
- Set the expectation, especially if things are being done on a more modest scale than in previous years, by placing greater emphasis on the meeting goals and themes than on the perks that may no longer be there. Create a compelling story of why things are being done the way they are and how that will help the attendee achieve organizational or personal goals. Make that story clear in all communications and conference materials.
- Identify what is important to the group and what they can live without. Trim or enhance items as is appropriate to meet those needs, and only fight those battles that need to be fought.
- To shake things up, look outside of your event toolbox for new ideas: Rather than only reading meeting magazines and blogs, read about other topics that interest you, visit museums, watch fashion shows and follow social networking streams to see if anything inspires you. Simple ways to mix things up include unexpected room sets that encourage discussion, or using a central theme to tie a banquet’s food, educational speaker, centerpieces and charity initiatives together.
- If there’s no money in the budget for team-building or other activities, incorporate them into breaks. “One of the things that I’ve done was a salsa-making contest,” an association planner shared. “You still have all the break elements, the money spent is still the same, but it makes it a little more interactive. You have all the [ingredients] there and the hotel judges.”
- Other creative ideas included adding game elements like scavenger hunts or encouraging attendee creativity by covering tables with butcher paper and having pens for doodling.
- Partner with the facility, because they are willing to help if they know your situation. “An organization [told us], ‘We need to have a big gala and it needs to be amazing, but we don’t have any money,” a supplier said. “So we went abstract, sometimes that’s better than having a theme [because] fabric and light are the fastest way to get a big ‘wow.’ I lined the hallway with weather balloons and lit them up. It cost $40 apiece; they were used to spending thousands of dollars. It was a big wow and one of their best-received galas.”
- Other suppliers suggested using themes inherent in special facilities (for example, setting up a temporary tattoo station in the Harley Davidson Museum) or have fun takeaways like flipbooks that are made on-site in a photo booth.
- Give a donation to a charity that’s important to the attendees instead of goody bag items. “You don’t have to donate the full [amount you’d spend on goodies], but you’ll still get goodwill and some good PR,” a supplier suggested.
- Partner with CVBs or DMCs to secure added value items that attendees will appreciate, such as show or attraction tickets. Third-parties also may be able to help groups secure such items.
- Focus on one “wow” element and really make that work rather than trying to make everything special.
- Increasing attendance and membership
- Many associations emerged from 2009 experiencing both a decrease in attendance and membership. Solutions:
- Use social networks to build communities that engage members and potential members/attendees year-round. Find a young techno-savvy member who can manage those efforts and mentor you in social networking best practices as you mentor and teach them about the more professional aspects of the industry.
- Senior Event Manager of the Society of Plastics Engineers Lesley Kyle, CMP, taught a session at PCMA on social networking best practices. One of the “Making Cents” attendees suggested those interested in creating online communities read her handout.
- Offer early-bird rates as incentives for signing up well in advance of the event. “Our meeting is in April,” one planner said. “And we don’t start picking up until mid to late January. [We thought] offering an early bird rate if you book by November was a pretty good idea.”
- Find out what your membership values about your association and what it still needs to get from it. Address those needs. Create a compelling story about how your members have benefitted from the organization to share with prospective members.
- Survey the people who didn’t attend your events and find out why they stay at home. Consider offering ways they can attend virtually.
- Consider offering mini-conference and day rates to help make the experience more affordable for people whose costs are not being covered by their companies.
- By holding less frequent regional meetings, state association planners can boost attendance and buying power.
Finding new revenue streams
You can’t save your way to prosperity. Planners were interested in knowing how they could add new revenue streams to their events. Ideas:
- Every opportunity a sponsor could have to get in front of your attendees is something that can be sold or sponsored: i.e., holes on a golf course, coffee breaks, printing stations, USB drives, online registration sites, archived Webcasts, e-newsletters, luncheons, speakers and so on. The possibilities are limitless.
- Ask your facility what potential revenue streams they have. A hotel conference center representative shared that their facility had just added new LCD screens throughout the property. “One of the things we can do is program logos and commercials on there and that’s free to our client,” he said. “[But they] can turn around and sell that to their sponsors.”
- Think of sponsors as partners rather than donors and make sure you are offering ongoing, mutual benefits.
A parting thought: Because it’s widely known that it’s a buyer’s market, planners reported increasing pressure to pull off “killer deals” from board members and bosses. If you want them to appreciate your efforts, make sure to assign a dollar value to any concessions won during negotiations so those savings may be communicated to the board and other key meeting stakeholders.
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