Meeting Destinations: Taking Flight

Travel for meetings is expected to increase next year, as businesses recognize the value of getting people together

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Few in the meeting and hospitality industry aren’t ready to put 2009 behind them; most of us look toward some measure of relief in 2010. The economy hasn’t bounced back to the “salad days” of a few years ago, but there are increasing indications that businesses are seeing the value of bringing people together, even when that means travel.
And that’s good news for the event industry.
“Following a difficult 2009, businesses have a heightened focus on the value and bottom-line benefits of travel,” says Suzanne Cook, senior vice president of research for the U.S. Travel Association. “We expect to see a slight increase in business travel next year based in part on pent-up demand for face-to-face meetings that drive growth and productivity.”
The weak economy of the last couple years caused companies worldwide to tighten their travel budgets and drastically cut their meetings, some even canceling events they’d had on the books for years. The result was devastating. The U.S. travel industry reported a dramatic loss of $1.9 billion as early as the first two months of 2009, according to Smith Travel Research and the U.S. Travel Association. In June 2009, the U.S. hotel industry entered its 19th month of decline.

No substitute for face-to-face
A study by Oxford Economics found that face-to-face meetings and incentive awards to top performers are among the smartest investments companies can make. More than 75 percent of customers either require or prefer in-person meetings, according to business travelers surveyed in April 2009. And 81 percent of corporate executives believe a slow economy calls for more contact with clients, not less.
Virtual meeting technologies are expanding, but phone calls, email, social media and video conferencing simply aren’t as effective as face-to-face meetings, says Jessica L. Levin, MBA, CMP: “As great as technology is today, no one is saying we can do it all virtually. You just can’t replace these face-to-face contacts. People still want—and need—to get together and meet in person.”
As manager of communications and member services for Moore Stephens North America, Inc., an accounting association, Levin just completed a site visit to Chicago for 2011 meeting. “There still is some hesitation for dollars spent on travel and education, but our accountant members understand the value of face-to-face meetings,” she says. “However, we’re still focused on finding value within a property or destination, without sacrificing the value of time. For example, Chicago may have a higher price point of room rates, but its easy access provides a time-savings to our members.”
Levin says Chicago still offered availability for her meeting, with the exception of high-end properties like the Ritz-Carlton and Four Seasons, which were either completely sold out or holding space for events. She advises planners to start looking now for 2011 events, even if not yet booking, to open up negotiations and flexibility.
Michael M. McCurry, CMP, Strategic Account Manager, for the Illinois-based Experient, says, “With the government and media scrutiny earlier this year, combined with financial pressure, organizations are shying away from utilizing destinations that have a high profile and reputation for being ‘exotic,’ which is really unfortunate.”
He doesn’t see this trend changing dramatically anytime soon, as many associations and corporations continue to look at destinations that have more of a business focus, rather than those that seem to communicate play and/or luxury. No one wants to look like their attendees are there to play, rather than to work. Cities like Chicago, Denver, Boston and Atlanta are benefiting from this, while cities like Las Vegas and resort destinations have suffered and continue to struggle as a result of media hype about “boondoggles.”

Strategies for room blocks
In the past 18 months, McMurry says, a meeting planner’s biggest concern has been room-block performance, as the economy forced many conference attendees to shop around for the best hotel values. Organizations hosting the event have watched their room-block performance at contracted hotels, often creating significant attrition liability.
Venues and destinations are finding creative new ways to meet planners’ needs and convert those offers into successful events that stay inside the hosted hotel block:

• Early-bird rates - Reduced room rates in exchange for meeting a deadline for making room reservations.
• Reduced prepaid rates - Attendees get a significantly lower rate if they pay for their entire stay in advance.
• Hotel perks - For example, attendees get free internet service in their rooms for the entire stay. This is not new in mid-market hotels, but hasn’t always been done at upper-tier hotels.
• Special giveaways - Attendees qualify for a drawing for a giveaway, such as free registration at next year’s event, dinner for two in the hotel restaurant or cocktail coupons.

To locate “date holes” in a city, McMurry recommends contacting a DMO (Destination Marketing Organization). DMOs will work hard to bring a city’s bid together. They also do single-hotel projects. Organizations with date flexibility will find the best values. For hotel site searches, Experient uses hotels’ national sales contacts to identify the initial information on rates, dates and space.
“Now is the time to ask,” says Carolee Ettline, senior director of field sales for Crestline Hotels & Resorts, one of the nation’s largest independent hospitality management companies. The company presently manages 66 hotels, resorts and conference and convention centers with nearly 14,000 rooms in 13 states and the District of Columbia.
“Meet with the property or destination and open up discussions,” Ettline says. “Be upfront about your budget and your priorities. This is not the time to play your hand close. If room rate is your priority, then understand that other price points may be sacrificed, such as meeting space or value-added options such as complimentary airport shuttles. Give the venues, hotels, destinations, or national sales team the opportunity to partner with you. Work out the solutions to potential problems together.”
Solid partnerships will make or break meetings in 2010 and beyond. Seeking advice of national partners or brands will help planners locate the best price and key destinations.

Plan ahead for savings
“Now is the time to plan early,” says David Gabri, president and CEO of Associated Luxury Hotels International (ALHI). Savvy planners can gain excellent value in the luxury sector by leveraging their buying power to book now for future years.
ALHI has been serving the meetings and incentive industry for more than 25 years with one-call access to a worldwide portfolio of over 125 premier Four- and Five-Diamond/Star quality hotels and resorts, including city center hotels, exclusive small meeting venues, gaming and entertainment destinations, resorts and conference facilities.
“Group rates are a bargain with value rates and dates for our ALHI hotels and luxury sector as a whole in a predominantly buyer’s market,” says Gabri. “We’ve seen significant trends since mid-summer, increased RFPs, increased bookings month-to-month…all due to the necessity of meeting in 2010 and beyond.”
Gabri encourages planners to take advantage of the window of opportunity soon, however, because the pricing pendulum is likely to swing back to the middle in the future.