Coinciding [...]]]>

In April, Experient hosted three Meetings and Events industry forums in Chicago, St. Louis and Washington DC.  Experient team members, as well as prominent association and corporate executives met to discuss and brainstorm hot industry topics.  This is the third in a three part series of articles recapping the highlights of those events.

Coinciding with renegotiation of a hotel contract is the sometimes painful topic of attrition.  In these tough economic times room block performance has become a pervasive issue with most organizations hosting meetings and events.  Thinking creatively and acting proactively is paramount to alleviating, or at the very least minimizing attrition risk.  The following are some suggested techniques for addressing this issue.

• Mitigation Clause — Make certain you get credit for “re-sold rooms”.  If your hotel contract does not contain a provision crediting your organization for room nights resold by the hotel request that it be added to it.
• Attrition Buyout — If you are certain your event will have an attrition expense then offer an early payment in exchange for a reduction to the liability.  For example if you believe you will owe $100K, negotiate to pay a smaller amount (i.e. $50K) several months in advance.  The hotel deposits the funds earning interest on them, and enhancing their cash flow.
• Credit For No Shows — if the  hotel is collecting lost deposits for no shows this should be credited against the attrition obligation.
• Off Site Catering — Move off property Food & Beverage events back into hotel.  This provides an alternative unexpected revenue stream to help offset the room shortfall.
• Leverage Brand Relationship — In a city where several hotels with the same hotel company co-exist negotiate an agreement where your organization gets credit for rooms booked at all the hotels operated by the contracted brand, regardless of whether they were contracted or not.  As part of this arrangement, you must conduct room audits with all the designated hotels.  For cities with relatively large hotel room inventories this technique is particularly effective.
• Bring Attendees Back to Contracted Hotel — move attendees that have booked outside the block into the contracted hotel(s) and pay the rate difference.  This will be less expensive than paying full attrition on unused rooms and is a winning proposition for everyone.
• Convert Attrition Expense To Gift Certificates — Attrition is converted to gift certificates and then sold to the attendees to giveaway as incentives, etc. Every time a gift certificate is used – a proportionate reduction is made to the attrition obligation.
• Future Events Booked into Attrition Hotel — If your organization is able to place other future business into the affected hotel, then you should be able to negotiate a reduction of the attrition obligation based upon that event’s projected value.  This arrangement is most effective if you are able to provide new business during the same calendar year.

Do you have a technique for addressing attrition concerns to share …. if so we’d like to hear from you!

In April, Experient hosted three Meetings and Events industry forums in Chicago, St. Louis and Washington DC.  Experient team members, as well as prominent association and corporate executives met to discuss and brainstorm hot industry topics.  This is the second in a three part series of articles recapping the highlights of those [...]]]>

In April, Experient hosted three Meetings and Events industry forums in Chicago, St. Louis and Washington DC.  Experient team members, as well as prominent association and corporate executives met to discuss and brainstorm hot industry topics.  This is the second in a three part series of articles recapping the highlights of those events.

Feeling challenged by room block management?  Here are some ideas to consider when developing your management plan ….

Strategy #1:

Educate attendees/exhibitors to the “downside” of not utilizing official room block — Dedicate a highly visible section of your organization’s website for this purpose.  Explain why it is important to stay at the conference-sponsored hotels.  Many conferees do not understand the impact this has on the overall success of the event.

Strategy #2:

Use an Integrated Housing & Registration Solution — an integrated system enables an organization to create business rules protecting the integrity of the event.  Some examples:

• Registration drives Housing – In order to book a  hotel reservation, an attendee must first register for the conference.  This emphasizes the commitment behind the reservation.
• Housing drives Registration – In order to be eligible for the discounted registration rate, attendees/exhibitors must utilized an “official” contracted conference hotel.  Otherwise they pay a higher registration fee.
• Sin Tax – Consider imposing a “sin tax” for those members who stay outside of the block. One association charges a $150 sin tax.

Strategy #3:

Strict Room Cancellation Penalties — Creating accountability for a room reservation will ensure it is valid to start with. Some possible approaches are:

• Reservation deposit – tied to a cancellation deadline (usually 48-72 hours) after which the attendee forfeits it.  Some organizations require a two-night deposit, which leads to an even greater attendee commitment.
• Reservation Cancellation Fee — Where room deposits are not viable a flat fee for canceling is an alternative.  This fee (usually much smaller than a reservation deposit) is paid directly to the organization.

Strategy #4:

Offer an Early Bird Special — Promote, for those hotels needing an extra push, a reduced “limited time offer” room rate to attendees to drive pickup to targeted hotels.  This works especially well in a tough economy and with Higher rated hotels.  Note:  This must be negotiated with hotels ahead of time, of course!

Strategy #5:

Enforce Hotel Contract Rate Protection Clause – Assuming you have  negotiated this type of clause in your hotel contract, check the city’s hotel market frequently.  An example of a great resource for doing this is www.Hotelscombined.com which is a mega search engine for hotel rooms.

Strategy #6:

Utilize Contracted Room block Review Dates — Be conservative with estimates, anticipate trends and commit accordingly. Having a good command of your event’s room pickup history will position you to be proactive with this process.  Understand what else is occurring in the city…. if there is a lot of room inventory available over your contracted dates this could drive prices downward in the marketplace.

Note:  If a significant room block reduction is required be prepared to make a concession. (ie reduced function space or reduced concessions)

Strategy #7:

Diligence with Room Block Audits — Being meticulous with this process may lead to saving thousands of dollars in attrition expense.  In addition you will qualify for more comp rooms (1:50 ratio) and enjoy greater credibility in future hotel negotiations.

Strategy #8:

Overflow Hotels — Contract these hotels with no attrition obligation and make sure that fact is written into the contract.

Strategy #9:

Surveys Are Your Friend — Send out an attendee survey inquiring about their hotel arrangements.  This will provide you valuable insight into how they are responding to the marketplace where the event is  held.  Two good resources for surveys are Survey Monkey and Zoomerang.

Do you have a room block management strategy that has worked well for you… please share it with us.  We would love to hear from you!