Despite reassurances that the recession is over, corporate purse strings aren’t getting any looser. And that, coupled with increasing hotel and transportation costs and short booking windows, is leaving meeting and event planners feeling pinched.
On the meeting supply side, hotel and convention sales managers are having a hard time connecting with potential clients and maintaining price integrity. And those are just a few of the challenges that meeting professionals shared with Plan Your Meetings at Kansas City MPI’s Education Day at the K event on May 19.
Fortunately, the meeting professionals there discovered potential solutions. Here is a summary of their findings:
Waste not, want not
The first step to identifying cost savings in a program is to define what the group’s priority areas are. Planners gain more leeway and foster more goodwill at the negotiation table if they focus on a few key items rather than demand a set list of concessions. If line items don’t enhance the meeting or business objectives, they probably aren’t needed.
Another key way to eliminate costs is to get rid of water bottles, disposable items and as much paper as possible. In addition to saving money, these practices create more sustainable meetings. However, any time digital or online materials replace physical ones, planners need to educate attendees on how to access and use the technology. Not everyone is comfortable with the new tools available, so it’s important that planners make any digital materials and interactive platforms as user-friendly, intuitive and fun to use as possible. Successful strategies include creating conference-specific iPad-based apps and games, and engaging attendees over social networks in Facebook groups or on white-label private networks tied to online registration systems.
Better planning through technology
Technology can help planners track budgets and create templates for future meetings. Corbin Ball has an extensive list of Excel spreadsheet templates on his website. Christina Cook, a sales rep at the Kansas City event, also has one she’d be glad to share; just send her an e-mail.
Online tools can help planners find cost-effective workers. If a last-minute registration push is needed, the site callingpost.com allows planners to send a short, personalized voice message to people for as little as 6 cents a name. Developing a conference app can cost as much as $20,000, but sites like elance.com or vworker.com, allow users to set a price range, send out an RFP and review offers from freelance writers, graphic artists and website designers willing to do the work at a budget-friendly price.
The problem with A/V
One corporate meeting planner was frustrated with audiovisual costs. “I lug around my own laptops and projectors, and they’ll still charge me $1,000 to $1,500 for a microphone and a screen,” she said. “It’s too much for a meeting of 30 to 40 people.” An A/V professional suggested that she share her budget when she first meets with her provider, because then the A/V specialist can suggest similar equipment that costs less. Planners also are advised to compare the cost of in-house versus outside A/V providers and book in 24-hour blocks, which helps set aside enough time for load-in and load-out, and helps avoid overtime charges for space and labor.
“If you sign a contract guaranteeing six meetings around the country with partner A/V companies, they could give you discounts across the board,” suggested one third-party planner. Consolidating purchasing power among all of a company’s in-house planners can be a useful bargaining tool. “If you combine efforts or work with the same people over and over again, people will be more flexible because they know that whatever they’re giving you a price break on, they’ll be able to make up the difference somewhere else,” this planner said.
Putting the ‘custom’ into customer service
Some sales managers point out that despite planners’ short booking windows, getting them to commit to contracting sooner rather than later is a challenge. One proposed solution is offering them customized programs to fit their goals and price points.
“We are doing custom menu requests and trying to customize things to get customers to commit,” one hotel sales rep said. “And it’s working.”
Asking planners what their meeting goals are promotes strong partnerships that can deliver a budget-friendly program that doesn’t cut corners and still helps hotel sales teams make their monthly quotas.
Most meeting planners have not been formally trained to do the work they do, so having someone on the supply side who can advise them on unfamiliar aspects, offer advice and help them track ROI is often rewarded with repeat business. The sentiment often expressed by PYM planners and advisory board members is,”I’ll follow someone I like from property to property.” The buyers in Kansas City agree.
The burden of extending booking windows ultimately will fall on meeting planners, because they will need to educate key meeting stakeholders about the benefits of planning events in advance. Now that bosses and clients know how quickly programs can come together, the temptation will be to keep planning events at the last minute. To reverse this trend, planners have to identify and share line items that suffered inflated costs because there was insignificant time to negotiate or find more affordable options. At the same time, they also need to educate financial departments about how the cost of meeting is rising.
Getting a handle on travel costs
The volatility of airline service and pricing is of particular concern.
“If I’m booking an event that will happen two years from now, we don’t know if we’ll still be able to fly 700 people into the destination or how much it will cost,” one planner said. “But airlines don’t think that way; they’re just trying to fill seats right now. In two years, you don’t know if flights will be added or taken away — you can be $500,000 off just on air.”
Other planners say that even airlines with group business departments don’t seem that interested in helping planners. When everyone in the room was asked to recommend a cooperative airline, the only sound was nervous laughter.
“Years ago, the airlines used to be at our MPI meetings,” one planner said. “But they don’t come anymore.”
Some event organizers say they had success working with convention and visitors bureaus (CVBs), because some had good relationships and contacts with the airlines.
The uncertainty of airlift also negatively affects second- and third-tier destinations and their hotels. “We lost a group because it was cheaper to fly to another destination,” said one director of sales from a destination resort. Many CVBs and out-of-the-way properties have turned their attention to attracting “backyard” business — groups within a 50-mile radius — as airlines continue to decrease frequency and eliminate routes to recoup losses.
In the absence of having a helpful airline sales contact, planners can go online to bing.com/travel to get an idea of historical fare patterns and compare the cost of flying to different destinations.
Putting the money where their mouths are
The escalating cost of hard goods, like food and gasoline, along with increased demand on the supply side are driving rates, transportation and service costs higher, but buyers’ budgets are not expanding accordingly.
“Planners may start to see banquet menus that require them to share buffets or other banquet packages with groups or pay a penalty per-person fee,” a catering sales manager warned. “I’m interested in knowing how the planners in the room feel about that.”
A third-party planner responded, “That’s how it’s done in Europe and how it used to be done here. That’s what you’ll find in South America, Russia, Europe, the Middle East … they won’t negotiate unless you go with the package. Also it reduces waste because it’s green.” But, she added, if that’s what American hotels require planners to buy, they’ll have to step up the quality of the menus offered. In other words, “Don’t try to pass off a cookie as dessert.”
Another planner said that for his smallest groups, he’s been able to save some money by having attendees eat directly off the hotel restaurant’s lunch buffet, seating them in a semi-private area. Giving them that kind of variety, he said, also eliminated much of the post-meal griping he typically gets with a standard banquet or buffet menu.
Planners also can save on food and beverage costs by placing the least-expensive items first on the buffet line, requiring approval before items are refreshed, and using smaller cups for coffee and beverage pitchers rather than bottles or cans. But perhaps the most important thing planners can do to avoid stumbling onto a budget bomb is to check menu pricing and talk about all the fees and costs before contracts are signed. Some planners even go so far as to write into their contracts that they are not liable for any fees that have not been disclosed or spelled out in the contract.
Education is key
One hotel sales manager wanted to know more about hotel operation costs and profit margins. “My pay and the pay of most of the sales managers in this room are based on rooms,” she said. “And I would like to give a concession on A/V, and things like that, but I don’t know if I can. I just don’t know what the costs are, and I want to.” When she added, “The hotels need to educate the sales managers on hard costs,” the statement provoked spontaneous applause.
The lack of knowledge on what hotel sales teams are empowered to give concessions on can be frustrating for buyers. “I’m finding there’s less and less flexibility,” said an independent planner. “My sales contact says, ‘Oh, I can’t do anything about that, that’s the room revenue side, that’s the food and beverage side.’ But all my money is coming from one till. The hotel should work out a way to evaluate the business. The sales director needs to sell the group [to the bean-counters] and say, ‘We need to take away from Peter to pay Paul because they’re good business.’ ”
Taking hospitality out of the hospitality industry
The problem is exacerbated, she says, by the fact that chains are yanking local and regional sales managers from the field and directing all meeting requests to national sales teams based in cities hundreds of miles from the hotels they represent. Planners no longer have access to someone who knows them, knows the business they bring and can act as an advocate.
“I hate it,” the independent planner said. “Some of us have been in the business for 20 years and we have cultivated relationships with salespeople. Then a new salesperson comes in who doesn’t even to take time to read any of the notes or learn anything about me as a client. And as an independent planner, I may have to talk to four different sales managers, depending on what industry the client I’m working for is in — financial, insurance, agriculture, association.
“You can go back to your managers,” she told the hotel personnel in the room, “and say it’s not working for the meeting planners.”
Or for the CVBs. A meeting planner may consider a hotel in their city, but if the dates or space is unavailable, national sales reps will direct them to a similar hotel in a different city, completely removing other local hotels from the equation. And for the bureaus, which are largely funded by hotel taxes, that rankles.
Some planners are starting to avoid chains, when possible, choosing instead to work with independently owned properties.
“We still work with clients on an individual basis,” said a sales manager from an independent hotel. “I look at all the ancillary business that the client is producing, whether it be spa, food and beverage, etc., and I will work with you. Our issue is when a client comes back and says, ‘We’re spending X amount on room revenue, so you should waive all F&B minimums, all meeting room rental.’ Unfortunately, we still have costs involved, in terms of labor to set, clean, refresh rooms and do things like turn the lights on, run the air [conditioning] and clean the carpet. So somewhere there has to be a win-win for both parties.”
Finding that balance requires flexibility on both sides. “Unfortunately, a lot of salespeople don’t do due diligence educating the planner about rooms-to-space ratio,” said one young sales manager. “If you have too much space and can cut back, that allows us to book another group [and] that will help us be more flexible. If you don’t have the budget to do a lunch and the attendees are on their own, help us come up with a short enough break time that they’re going to be eating at our on-site restaurants instead of the McDonald’s down the street. If you want to do that, they’ll do a special at the restaurant, get them in and out — it helps the planner’s budget and gives the attendees a break on cost, but it’s not coming out of the sales manager’s bank.”
Help is on the way
One corporate planner whose company won’t pay for site visits to venues hosting its smaller meetings finds it difficult to trust sales managers — she’d had a bad experience being told a meeting space met certain requirements only to find out, during the event, it was completely inadequate. “How can I make sure that the information they give me is accurate when I can’t see the space?” she said.
Go to the online MPI directory and find people who live in that city, replied one longtime planner. “Or go to LinkedIn and send a blanket e-mail introducing yourself and asking if anyone has seen these hotels. Someone will call you or tell you. I have a lady I’ve talked with three times about three different cities and she has called me about Kansas City hotels. MeCo also is a great resource; you can send an e-mail, and they will give you honest feedback.”
Online resources include oyster.com, which posts pictures of the hotel’s promotional images next to actual candid shots taken by its contributors, and virtualvisit.ca, where planners can take virtual site tours.
Planners also should use CVBs. “Whenever you go into a city, contact the convention and visitors bureau,” said a sales manager from a major East Coast city. “They can tell you what else is happening in the city, tell you about activities, point you to unique properties that would be a great fit.” The bureaus also offer a range of free services, from providing event volunteers and goodie bag items, to providing marketing materials and arranging airport transfers. The perks they offer differ in every city, but they can be invaluable to planners organizing events in an unfamiliar destination.
And then there’s the time-tested tactic of managing expectations. “I begin by telling my salesperson my horror stories,” the corporate planner said. “I explain to them how I don’t want to be treated and why those people will never have my business again.”
Finding (and welcoming) prospective business
On the supply side, many sales managers say the biggest challenge is getting planners to make that call in the first place. Or getting any response from prospective clients.
“The first thing that will be cut out of or line item is going to be travel,” a CVB rep explained. “Because time is so precious, for those who can’t sit down with you at an event like this, what is the best way for them to have an honest conversation with you?”
An association planner replied, “One of my biggest pet peeves is when I get calls or e-mails from people who haven’t done their homework on me or the kind of meetings I plan. Or getting the same call 17 times from a venue that I’ve already told won’t work for my group. But if they leave a note or message of some kind that lets me know they understand my needs and my group patterns, I will call them back, whether there’s a shot of us going there or not because I appreciate that they took that extra step.”
Other techniques that sales teams report success with include delivering food to offices, asking planners to meet for five minutes over coffee and including dates they’ll be in town in their e-mail signatures.
Being active on social media also helps start conversations between hotel sales managers and meeting planners, but it’s important to have someone behind the page or online brand that’s out there.
“Somebody wasn’t managing our hotels.com or tripadvisor.com listing and bad feedback was there and wasn’t getting addressed,” said one hotel saleswoman. “So now we do that every day, every time someone comments, good or bad.” Delivering that level of instant attention and concern can transform someone who’s angry at the property into a fan or even an evangelist.
One planner asked if it was better to have a Facebook and Twitter page but not do anything with it than not have one at all. The general consensus was that someone needed to be assigned the task of updating those online portals with quality content on a consistent basis.
“And it should be different information than I find on your website,” the planner added. “Otherwise it just wastes my time.”
In general, the planners found most supplier websites hard to navigate. “Hotel [and CVB] websites are so geared to leisure travel, it’s hard to find meeting schematics,” one corporate planner complained.
And since many meeting planners do their research online at night or on the weekends, not having the information they need at their fingertips is more likely than not to turn them off completely.
A mile in their shoes
But perhaps the best piece of advice came later.
“I started off on the hotel side,” said a planner who’d been in the business for 25 years. “And I firmly believe that if you want to be a meeting planner, you should start working with a hotel, so you understand where they’re coming from.
“And anyone in hotel sales should spend some time planning meetings,” she added. “Because otherwise, you just don’t know.”