As the cost of airfare and gas soars, consumer and business travel continues to decline. After experiencing record occupancy rates, profits and revenues in 2007, the hotel industry is bracing for a tough 2009. By the end of next year, pundits predict hotel profits may be down as much as 20 percent.
Is this good news for planners? Many say yes. According to Judie Durant, a meeting and incentive planner for Massachusetts-based Colpitts World Travel, planners definitely have the upper hand. Hotels are lowering room rates, discounting food and beverage, and offering incentives such as double and triple planner points, she reports.
Washington state-based planner Jacky Grotle, owner of Event Success, agrees. “They offer items like donation to your favorite charity, complimentary guest welcome gifts, complimentary room nights, welcome receptions and more. They are much more receptive to negotiating costs [now]. Many companies are spending less and cutting back on events so hotels and venues are fighting for this business.”
Erin Hutchinson, director of events of Maryland-based Merkle Inc., says this is an exciting time for mid-market event planners. “They are in a position, for the first time in a long time, to have a significant amount of negotiating power as hotels struggle to reach their sales goals.”
Mark Testa, owner of Mark Stephen Enterprises and a former event director for Condé Nast Traveler, warns that although hotels are being very accommodating, planners should keep their eye on the fine print. Testa says small items are likely to show up on the final bill, raising costs by 30-50 percent in fees, taxes and service charges.
For most planners and hoteliers, however, the focus is on building and maintaining strong relationships to make negotiations a win/win situation. “Now is the time when event planners and hotels form true partnerships,” says Marianne Moore, director of catering at Four Seasons Hotel St. Louis. “No one knows our hotel better then we do, and planners depend on our expertise to help them get the best values for the clients. In the end, the planner and the hotel both look better for working together.”
Virginia-based planner Isha Foss, of Isha Foss Events, says, “The hotels we work with keep us informed of any holes in their schedules. [Knowing] who is available and possibly willing to negotiate benefits my clients.”
Morgan Greenlee, PR and marketing manager of Conrad Indianapolis, says her hotel is seeing corporate planners scaling back their budgets, so they are getting creative with what they’re offering. “Corporations aren’t booking lavish holiday parties, [so] we invite companies to come over for a holiday lunch. We offer a party without the big price tag.”
Mike Mason, senior vice president of sales for Gaylord Hotels, points out that although the hotel industry has been impacted by the struggling economy, it’s not necessarily a negative impact. “I don’t think there’s a business out there, hospitality or otherwise, who can honestly say they haven’t been impacted,” he says. “For Gaylord Hotels, the impact is more short-term than long-term. In the short-term, as would be expected, groups are struggling to pick up their promised number of rooms. The good news is that the demand for short-term meetings is holding. In fact, we expect that trend to hold through next year as booking cycles continue to shrink. The key for us then is to get ahead of the attrition curve and work with our customers at 90 or 120 days prior to a group’s arrival to begin reselling their rooms if their numbers are not materializing.”
Source: NY Times