Embed Size (px)
Citation preview
872019 Att 11
httpslidepdfcomreaderfullatt-11 19
Top of Formhttpimageserve httpw ebebsco Smart
ctl00_ctl00_FindF ctl00_ctl00_FindF ctl00_ctl00_FindF ctl00_ctl00_FindF def768d2-1ee4-4 7
H4sIAAAAAAAE
enabled
Browse Resources toolbar New Search Menu Item Sub Menu Available Publications Menu Item Sub Menu AvailableCompany Profiles Menu Item Sub Menu Available Thesaurus Menu Item Sub Menu AvailableMore Menu With Sub menusCited References Menu Item Sub Menu Available
Images Menu Item Sub Menu AvailableIndexes Menu Item Sub Menu AvailableFolder Access and HelpSign In Folder Preferences Languages Menu With Sub menusEnglishDeutsch Menu Item Sub Menu AvailableEspantildeol Menu Item Sub Menu AvailableΕλληνικά Menu Item Sub Menu Available
Franccedilais Menu Item Sub Menu AvailableItaliano Menu Item Sub Menu AvailableMagyar Menu Item Sub Menu AvailablePolski Menu Item Sub Menu AvailablePortuguecircs Menu Item Sub Menu AvailableРусский Menu Item Sub Menu AvailableTuumlrkccedile Menu Item Sub Menu Available Menu Item Sub Menu Availableعربي简体中文Menu Item Sub Menu Available 繁體中文 Menu Item Sub Menu Available 日本語 Menu Item Sub Menu Available 한국어 Menu Item Sub Menu Available ภาษาไทย Menu Item Sub Menu Available Hrvatski Menu Item Sub Menu AvailableČeština Menu Item Sub Menu AvailableBahasa Indonesia Menu Item Sub Menu Available רית ב Menu Item Sub Menu AvailableעRomacircnă Menu Item Sub Menu AvailableSlovenski Menu Item Sub Menu Available
872019 Att 11
httpslidepdfcomreaderfullatt-11 29
Nederlands Menu Item Sub Menu AvailableNew Features Help Exit Screenreader assistance To improve accessibility we have several tips for navigating the
Article DetailHeading levels are available for easier navigationSkip to CitationSkip to Main ContentSkip to Find box or use access key = 2Negotiation amp Attrition TrendsPSG INST OF MANAGEMENT
Searching Business Source Premier Choose Databases raquoEBSCOhost Search
Attrition rate in it sector
in
join operator in
join operator inAdd Row
Search Clear
Main Toolbar
Basic Search Advanced Search Visual Search Search History Result List Refine Search Result 37 of 1744345TitleNegotiation amp Attrition Trends By Carey Robert Successful Meetings 01484052Jan2005 Vol 54 Issue 1DatabaseBusiness Source Premier HTML Full Text
Negotiation amp Attrition TrendsContentsTHE FLIP SIDEWHEN ATTRITION ATTACKSEssential HighlightsPlanners who spend more time on negotiations and contracts than 2 years agoAverage expenditures per meetingNegotiability of meeting commodities
thornyuml
thornyuml thornyuml thornyuml
thornyuml thornyuml thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 39
Room Block FlexibilityListenPauseLoadi
ng
Help
Section State of the IndustryHeading into 2005 planners are surprisingly optimistic about where they stand in the areaof negotiation First a comparison of SOI reports from January 2001 January 2003 andtoday shows that planners views of negotiability of guest rooms meeting space rentalfood and beverage and AV equipmentservices have consistently improved over the pastfour years So on a scale of one to five with five being extremely negotiable and 1 beingnot at all negotiable in the current climate our respondents found that guest rooms wereat 369 meeting space rental at 381 food and beverage at 308 and AVequipmentservices at 293Of course the struggling economy over the past four years bears out our respondents
conclusion that the market has favored buyers But as the economy began a wobbly butunmistakable recovery in many sectors by mid-2004 it seems that planners presentopinions of how negotiability will change in the coming year might not match that newreality Case in point 293 percent of respondents said that guest room rates will becomeeven more negotiable in 2005 while another 381 percent said there will be no change innegotiability For meeting space 308 percent said that would be more negotiable while459 percent said there would be no change For food and beverage 238 percent said itwould be more negotiable while 461 percent expected no change And for AVequipmentservices 205 said it would be more negotiable while 583 percent expectedno changeFurthermore PricewaterhouseCoopers estimates that hotels revenue per available room
(RevPAR) was 63 percent higher in 2004 than in 2003--the largest one-year jump in 20years and a testament to newfound supplier strength But perhaps the most significantestimate planners should consider is this Smith Travel Research and other lodgingindustry research firms predict guest room rates will go up between three and five percentin both 2005 and 2006 while some major cities already have been able to raise rates wellbeyond that number because their occupancies are getting back to healthy levels not seensince 2000I think there is a lagging perception among planners about todays negotiating climatesays Fred Shea vice president of sales for Chicago-based Hyatt Hotel Corp The hotelindustrys stronger-than-anticipated results from the second half of 2004 and thepredictions for healthy growth coming on the heels of those results dont match what
planners have been able to negotiate to this point Many planners have not yet digestedthe most recent numbers but they will start seeing the effects of those numbers as theybook their meetings for the next two years Basically favorable rates are going to becomeharder to findWeve seen meeting group attendance come back much stronger in than the transientmarket which is just now returning to the East and West coasts but still lags in themiddle of the country adds Mike Beardsley VP of field sales for Bethesda MD-basedMarriott International And as we look at 2005 we see that the groups who are booking
thornyuml
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 49
inside 12 months will be subjected to larger rate increases than those who have alreadybooked or who will book events with lead times beyond 12 monthsTHE FLIP SIDEAs daunting as the hoteliers assessments sound there is another way of looking atnegotiability in the face of impending rate hikes--one that our SOI respondents seem to
have picked up onIn the air travel market a research finding released in November states that the majorityof fares on existing routes are the lowest they have ever been after inflation is factoredin And planners apparently have sensed that this market has hit bottom because just 20percent of them think that airfares will be more negotiable in 2005 while 45 percentestimate no change and 34 percent predict fares to be less negotiable In short whenprices drop on their own negotiability fades awayThis raises the hope then that as rates go up for guest rooms as well as other items andservices related to meetings planners will in fact have ample opportunity to negotiate--particularly in those areas where hotels typically reap the highest margins of profit Butthere are only two ways for the optimism expressed by SOI respondents regarding
negotiation to become reality First planners must undertake efforts to track not only thedirect revenues that hotels and meeting venues reap from their meetings but also theancillary revenues generated by attendees at the hotels and meeting venues and eventhroughout the whole destination Second planners must either book their meetingsfurther into the future or approach suppliers with flexibility on dates andor locationOn the first point Larry Luteran VP of group sales and industry relations for BeverlyHills-based Hilton Hotels Corp says that we always look at the potential totalprofitability of an event so the more data a planner can produce on what her grouptraditionally spends in each area the better a deal shell be able to strike because therewill be room for each party to maneuver so that they all get what they want Actuallywell take a small financial hit in one area or another if the overall profitability picture isright for usMarriotts Beardsley adds that the more that planners can keep elements such as cateredreceptions banquets and other affiliated functions inside the hotel the better able theyllbe to bring down guest room rates--which is generally the most profitable item for us--or get some other concession or upgrade Whats more any access planners give us to solicitexhibitors to hold their related hospitality suites and functions at the property will help agroups leverage Interestingly Beardsley recently negotiated for a meeting--as theplanner--and was able to bring his groups guest room rate down by $15 because he didnot need all of the complimentary guest rooms the group earned and returned them to thehotels inventoryToday many hotels are quite willing to negotiate with groups that will frequent thepropertys spa or golf course Spa revenue is critical to us and its going to stay thatway says Hyatts Shea Use of the golf course and spending in the retail outlets onproperty are desirable too But with recent research showing that spa users also spendmore on all discretionary items throughout the property we now look hard at how manyattendees of each meeting will use the spaAnd to capture ancillary revenue from the business center to the in-room minibars andeverything in between several hotel chains say they are improving internal systems toallow for a complete revenue picture of each meeting Planners get miffed when
872019 Att 11
httpslidepdfcomreaderfullatt-11 59
hoteliers ask for information from past meetings even though the hoteliers didnt providea way to capture all the data when those meetings took place Shea saysAs for planners gaining leverage through flexibility on dates and location Luteran notesthat this might be the only way to land a 2005 meeting in a desirable city at a priceresembling what groups paid in 2004 In a hot destination the exceptions to the rule
almost always revolve around filling a hole a property has over a particular set of dayshe says Also some cities have not rebounded as strongly as others on the transientbusiness side so there are some great properties still with sluggish occupancy Workingwith a chains national office is the best way to cast the net widely and we are upfrontabout our high-value opportunities around the country because thats where a planner canhelp us out significantlyAttritionIn the two years since our last SOI report several positive developments have lessenedthe impact of meeting cancellation and attrition Market shifts technological advancesand old-fashioned ingenuity have made these issues less feared less time-consuming andless onerous to suppliers and planners alike
Across the board hoteliers state that the economy of the recent past forced planners toadapt their attrition strategies such that those planners are reaping the benefits todayAttrition is not as much of an issue as in past years says Marriotts Beardsley After the headaches they had to deal with during their 2002 and 2003 meetings planners cutback room-block sizes when planning their 2004 and 2005 meetings So right now manygroups are picking up more rooms than they blocked out and its reaching a point wheresome have to scramble a bit to find more rooms The result in 2005 will be slightlylarger room blocks and longer lead times to secure themHyatts Shea echoes Beardsleys sentiments Two things have happened in the past yearCustomers and hotels have done a better job at booking conservatively and groups havebeen getting much better actual pickup because of the improved economyActually its more than just the economy that is driving high rates of block fulfillmentthese days Two years ago planners were more or less terrified by their inability to stopattendees from booking outside the room block by using merchant-model Web sites suchas Expedia and Travelocity But perhaps the most shocking finding in the 2005 SOIreport is that more planners now feel that the Internet will help them cut their rates of attrition (308 percent) rather than contribute to higher rates of attrition (222 percent)From an online perspective a change for the better started with hotels getting back control of their inventory from outside sites Shea says The rate guarantees chains haveput into effect on their own Web sites have helped keep attendees from straying Andmany organizations have taken control of where their attendees stay by creating Web-based registration modules that push people to book their housing during the same onlinevisitFurther hotels themselves are creating Web sites to help planners boost attendance andtimely in-the-block bookings in particular For instance the Hiltons of Washingtoncollectively offer the site wwwdcmarketingtoolscom which combines our hotels bestimagery marketing materials and e-commerce tactics along with best practices tomaximize meeting attendance says a Hilton spokesman The tool was also designed tohelp create excitement and interest in the city of Washington and ensure primary usage of the official convention hotel
872019 Att 11
httpslidepdfcomreaderfullatt-11 69
Luteran feels that in addition to all the proactive steps taken by planners and hoteliers theeconomy will still be a primary solution to attrition The way our hotels operate is tofirst secure a group base at a hotel and then have the last remaining out-of-block roomsfor those dates command the highest prices Of course when the bottom fell out of thetransient market four years ago the model was flipped in that the last rooms left were
offered below the group rate This posed a credibility problem both for planners withtheir attendees and for us with our planner clients But improved transient demand is thecure for this and we see that in 2005 the rooms remaining after the groups cutoff datewill indeed command the highest pricesWHEN ATTRITION ATTACKSOf course most association and corporate planners will deal with an attrition situation atsome point despite their preventative efforts And thats when the most creative plannersand suppliers will shine by finding a solution that satisfies both partiesIn fact there seem to be many creative folks in the meetings business because only 181percent of SOI respondents who incurred attrition in 2004 paid the full attrition feestipulated in the contract This does not surprise Hiltons Luteran Were in business for
the long haul and we want to work out deals during and after the meeting not just tomitigate a situation but also to make sure the customer is satisfied and will return to us inthe future with businessAs for the 286 percent of planners who said they paid part of the stipulated attrition feein 2004 hoteliers appear generally satisfied with the alternative forms of compensationthey receive in lieu of cash Were getting a lot more cooperation from clients who dontpick up their block to switch an off-site food and beverage event back into the hotel or give us another meeting or two in the same calendar year or a combination of both saysShea But Luteran notes that the fact that we gain a meeting in the future does not makeus whole because it doesnt help us with the rooms that were left vacant on the originaldates But there is a magic formula to mitigate every bad situation and we try hard tofind it with each clientWhen all else fails the best way for planners to avoid attrition is to release portions of their room block as early as possible so the hotel can sell those rooms With transientdemand rising in fact most hotels should not have significant trouble reselling roomsreleased at 30 days out which is the median penalty-free cutoff that planners agreed to intheir contracts according to our SOI respondentsBut despite the fact that nearly 40 percent of respondents had between 15 and 30 days torelease rooms without penalty in 2004--and nearly 26 percent had between just 7 and 14days--Shea says that those figures would be very surprising to see in todays contractsThen again if you are going to a city at a time where things are wide open well be veryflexible with final cutoff datesEssential HighlightsNegotiation Trendsbull Several research firms predict guest room rates will rise by three to five percent both in2005 and 2006bull To bring down room rates planners must present both direct meeting expenditures andancillary spending by attendees in all areas Properties are creating software to assist incapturing such data
872019 Att 11
httpslidepdfcomreaderfullatt-11 79
bull Some cities have not rebounded as strongly as others hotel chains national offices willpromote opportunities in destinations where planners have leveragePlanners who spend more time on negotiations and contracts than 2 years ago2002 732004 56
Average expenditures per meetingLegend for Chart
B - 2004C - CorporateD - Association
A B C D
Accommodations $18108 $16177 $15809Food amp Beverage $24844 $17964 $39174
Meeting Space Rental $2773 $2028 $4166ExhibitExpo Space $6972 $3615 $12691SpeakerTrainer $5838 $4330 $9316AV EquipmentServices $8510 $5647 $14124Airfare $17100 $10157 $9314Ground Transportation $2808 $2451 $2958On-Site Staff $3043 $2245 $4845Exhibit ServicesDeacutecor $7581 $4884 $13442Negotiability of meeting commoditiesLegend for Chart
B - 2002C - 2004
A B C
Sleeping rooms 360 369Food amp beverage 300 308AV equipment amp services 290 293Meeting space rental 380 381Air travel 260 238DMC services 300 289FampB attrition terms 330 306Guest room attrition terms 330 314
Legend for Chart
B - 2002C - 2004
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 29
Nederlands Menu Item Sub Menu AvailableNew Features Help Exit Screenreader assistance To improve accessibility we have several tips for navigating the
Article DetailHeading levels are available for easier navigationSkip to CitationSkip to Main ContentSkip to Find box or use access key = 2Negotiation amp Attrition TrendsPSG INST OF MANAGEMENT
Searching Business Source Premier Choose Databases raquoEBSCOhost Search
Attrition rate in it sector
in
join operator in
join operator inAdd Row
Search Clear
Main Toolbar
Basic Search Advanced Search Visual Search Search History Result List Refine Search Result 37 of 1744345TitleNegotiation amp Attrition Trends By Carey Robert Successful Meetings 01484052Jan2005 Vol 54 Issue 1DatabaseBusiness Source Premier HTML Full Text
Negotiation amp Attrition TrendsContentsTHE FLIP SIDEWHEN ATTRITION ATTACKSEssential HighlightsPlanners who spend more time on negotiations and contracts than 2 years agoAverage expenditures per meetingNegotiability of meeting commodities
thornyuml
thornyuml thornyuml thornyuml
thornyuml thornyuml thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 39
Room Block FlexibilityListenPauseLoadi
ng
Help
Section State of the IndustryHeading into 2005 planners are surprisingly optimistic about where they stand in the areaof negotiation First a comparison of SOI reports from January 2001 January 2003 andtoday shows that planners views of negotiability of guest rooms meeting space rentalfood and beverage and AV equipmentservices have consistently improved over the pastfour years So on a scale of one to five with five being extremely negotiable and 1 beingnot at all negotiable in the current climate our respondents found that guest rooms wereat 369 meeting space rental at 381 food and beverage at 308 and AVequipmentservices at 293Of course the struggling economy over the past four years bears out our respondents
conclusion that the market has favored buyers But as the economy began a wobbly butunmistakable recovery in many sectors by mid-2004 it seems that planners presentopinions of how negotiability will change in the coming year might not match that newreality Case in point 293 percent of respondents said that guest room rates will becomeeven more negotiable in 2005 while another 381 percent said there will be no change innegotiability For meeting space 308 percent said that would be more negotiable while459 percent said there would be no change For food and beverage 238 percent said itwould be more negotiable while 461 percent expected no change And for AVequipmentservices 205 said it would be more negotiable while 583 percent expectedno changeFurthermore PricewaterhouseCoopers estimates that hotels revenue per available room
(RevPAR) was 63 percent higher in 2004 than in 2003--the largest one-year jump in 20years and a testament to newfound supplier strength But perhaps the most significantestimate planners should consider is this Smith Travel Research and other lodgingindustry research firms predict guest room rates will go up between three and five percentin both 2005 and 2006 while some major cities already have been able to raise rates wellbeyond that number because their occupancies are getting back to healthy levels not seensince 2000I think there is a lagging perception among planners about todays negotiating climatesays Fred Shea vice president of sales for Chicago-based Hyatt Hotel Corp The hotelindustrys stronger-than-anticipated results from the second half of 2004 and thepredictions for healthy growth coming on the heels of those results dont match what
planners have been able to negotiate to this point Many planners have not yet digestedthe most recent numbers but they will start seeing the effects of those numbers as theybook their meetings for the next two years Basically favorable rates are going to becomeharder to findWeve seen meeting group attendance come back much stronger in than the transientmarket which is just now returning to the East and West coasts but still lags in themiddle of the country adds Mike Beardsley VP of field sales for Bethesda MD-basedMarriott International And as we look at 2005 we see that the groups who are booking
thornyuml
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 49
inside 12 months will be subjected to larger rate increases than those who have alreadybooked or who will book events with lead times beyond 12 monthsTHE FLIP SIDEAs daunting as the hoteliers assessments sound there is another way of looking atnegotiability in the face of impending rate hikes--one that our SOI respondents seem to
have picked up onIn the air travel market a research finding released in November states that the majorityof fares on existing routes are the lowest they have ever been after inflation is factoredin And planners apparently have sensed that this market has hit bottom because just 20percent of them think that airfares will be more negotiable in 2005 while 45 percentestimate no change and 34 percent predict fares to be less negotiable In short whenprices drop on their own negotiability fades awayThis raises the hope then that as rates go up for guest rooms as well as other items andservices related to meetings planners will in fact have ample opportunity to negotiate--particularly in those areas where hotels typically reap the highest margins of profit Butthere are only two ways for the optimism expressed by SOI respondents regarding
negotiation to become reality First planners must undertake efforts to track not only thedirect revenues that hotels and meeting venues reap from their meetings but also theancillary revenues generated by attendees at the hotels and meeting venues and eventhroughout the whole destination Second planners must either book their meetingsfurther into the future or approach suppliers with flexibility on dates andor locationOn the first point Larry Luteran VP of group sales and industry relations for BeverlyHills-based Hilton Hotels Corp says that we always look at the potential totalprofitability of an event so the more data a planner can produce on what her grouptraditionally spends in each area the better a deal shell be able to strike because therewill be room for each party to maneuver so that they all get what they want Actuallywell take a small financial hit in one area or another if the overall profitability picture isright for usMarriotts Beardsley adds that the more that planners can keep elements such as cateredreceptions banquets and other affiliated functions inside the hotel the better able theyllbe to bring down guest room rates--which is generally the most profitable item for us--or get some other concession or upgrade Whats more any access planners give us to solicitexhibitors to hold their related hospitality suites and functions at the property will help agroups leverage Interestingly Beardsley recently negotiated for a meeting--as theplanner--and was able to bring his groups guest room rate down by $15 because he didnot need all of the complimentary guest rooms the group earned and returned them to thehotels inventoryToday many hotels are quite willing to negotiate with groups that will frequent thepropertys spa or golf course Spa revenue is critical to us and its going to stay thatway says Hyatts Shea Use of the golf course and spending in the retail outlets onproperty are desirable too But with recent research showing that spa users also spendmore on all discretionary items throughout the property we now look hard at how manyattendees of each meeting will use the spaAnd to capture ancillary revenue from the business center to the in-room minibars andeverything in between several hotel chains say they are improving internal systems toallow for a complete revenue picture of each meeting Planners get miffed when
872019 Att 11
httpslidepdfcomreaderfullatt-11 59
hoteliers ask for information from past meetings even though the hoteliers didnt providea way to capture all the data when those meetings took place Shea saysAs for planners gaining leverage through flexibility on dates and location Luteran notesthat this might be the only way to land a 2005 meeting in a desirable city at a priceresembling what groups paid in 2004 In a hot destination the exceptions to the rule
almost always revolve around filling a hole a property has over a particular set of dayshe says Also some cities have not rebounded as strongly as others on the transientbusiness side so there are some great properties still with sluggish occupancy Workingwith a chains national office is the best way to cast the net widely and we are upfrontabout our high-value opportunities around the country because thats where a planner canhelp us out significantlyAttritionIn the two years since our last SOI report several positive developments have lessenedthe impact of meeting cancellation and attrition Market shifts technological advancesand old-fashioned ingenuity have made these issues less feared less time-consuming andless onerous to suppliers and planners alike
Across the board hoteliers state that the economy of the recent past forced planners toadapt their attrition strategies such that those planners are reaping the benefits todayAttrition is not as much of an issue as in past years says Marriotts Beardsley After the headaches they had to deal with during their 2002 and 2003 meetings planners cutback room-block sizes when planning their 2004 and 2005 meetings So right now manygroups are picking up more rooms than they blocked out and its reaching a point wheresome have to scramble a bit to find more rooms The result in 2005 will be slightlylarger room blocks and longer lead times to secure themHyatts Shea echoes Beardsleys sentiments Two things have happened in the past yearCustomers and hotels have done a better job at booking conservatively and groups havebeen getting much better actual pickup because of the improved economyActually its more than just the economy that is driving high rates of block fulfillmentthese days Two years ago planners were more or less terrified by their inability to stopattendees from booking outside the room block by using merchant-model Web sites suchas Expedia and Travelocity But perhaps the most shocking finding in the 2005 SOIreport is that more planners now feel that the Internet will help them cut their rates of attrition (308 percent) rather than contribute to higher rates of attrition (222 percent)From an online perspective a change for the better started with hotels getting back control of their inventory from outside sites Shea says The rate guarantees chains haveput into effect on their own Web sites have helped keep attendees from straying Andmany organizations have taken control of where their attendees stay by creating Web-based registration modules that push people to book their housing during the same onlinevisitFurther hotels themselves are creating Web sites to help planners boost attendance andtimely in-the-block bookings in particular For instance the Hiltons of Washingtoncollectively offer the site wwwdcmarketingtoolscom which combines our hotels bestimagery marketing materials and e-commerce tactics along with best practices tomaximize meeting attendance says a Hilton spokesman The tool was also designed tohelp create excitement and interest in the city of Washington and ensure primary usage of the official convention hotel
872019 Att 11
httpslidepdfcomreaderfullatt-11 69
Luteran feels that in addition to all the proactive steps taken by planners and hoteliers theeconomy will still be a primary solution to attrition The way our hotels operate is tofirst secure a group base at a hotel and then have the last remaining out-of-block roomsfor those dates command the highest prices Of course when the bottom fell out of thetransient market four years ago the model was flipped in that the last rooms left were
offered below the group rate This posed a credibility problem both for planners withtheir attendees and for us with our planner clients But improved transient demand is thecure for this and we see that in 2005 the rooms remaining after the groups cutoff datewill indeed command the highest pricesWHEN ATTRITION ATTACKSOf course most association and corporate planners will deal with an attrition situation atsome point despite their preventative efforts And thats when the most creative plannersand suppliers will shine by finding a solution that satisfies both partiesIn fact there seem to be many creative folks in the meetings business because only 181percent of SOI respondents who incurred attrition in 2004 paid the full attrition feestipulated in the contract This does not surprise Hiltons Luteran Were in business for
the long haul and we want to work out deals during and after the meeting not just tomitigate a situation but also to make sure the customer is satisfied and will return to us inthe future with businessAs for the 286 percent of planners who said they paid part of the stipulated attrition feein 2004 hoteliers appear generally satisfied with the alternative forms of compensationthey receive in lieu of cash Were getting a lot more cooperation from clients who dontpick up their block to switch an off-site food and beverage event back into the hotel or give us another meeting or two in the same calendar year or a combination of both saysShea But Luteran notes that the fact that we gain a meeting in the future does not makeus whole because it doesnt help us with the rooms that were left vacant on the originaldates But there is a magic formula to mitigate every bad situation and we try hard tofind it with each clientWhen all else fails the best way for planners to avoid attrition is to release portions of their room block as early as possible so the hotel can sell those rooms With transientdemand rising in fact most hotels should not have significant trouble reselling roomsreleased at 30 days out which is the median penalty-free cutoff that planners agreed to intheir contracts according to our SOI respondentsBut despite the fact that nearly 40 percent of respondents had between 15 and 30 days torelease rooms without penalty in 2004--and nearly 26 percent had between just 7 and 14days--Shea says that those figures would be very surprising to see in todays contractsThen again if you are going to a city at a time where things are wide open well be veryflexible with final cutoff datesEssential HighlightsNegotiation Trendsbull Several research firms predict guest room rates will rise by three to five percent both in2005 and 2006bull To bring down room rates planners must present both direct meeting expenditures andancillary spending by attendees in all areas Properties are creating software to assist incapturing such data
872019 Att 11
httpslidepdfcomreaderfullatt-11 79
bull Some cities have not rebounded as strongly as others hotel chains national offices willpromote opportunities in destinations where planners have leveragePlanners who spend more time on negotiations and contracts than 2 years ago2002 732004 56
Average expenditures per meetingLegend for Chart
B - 2004C - CorporateD - Association
A B C D
Accommodations $18108 $16177 $15809Food amp Beverage $24844 $17964 $39174
Meeting Space Rental $2773 $2028 $4166ExhibitExpo Space $6972 $3615 $12691SpeakerTrainer $5838 $4330 $9316AV EquipmentServices $8510 $5647 $14124Airfare $17100 $10157 $9314Ground Transportation $2808 $2451 $2958On-Site Staff $3043 $2245 $4845Exhibit ServicesDeacutecor $7581 $4884 $13442Negotiability of meeting commoditiesLegend for Chart
B - 2002C - 2004
A B C
Sleeping rooms 360 369Food amp beverage 300 308AV equipment amp services 290 293Meeting space rental 380 381Air travel 260 238DMC services 300 289FampB attrition terms 330 306Guest room attrition terms 330 314
Legend for Chart
B - 2002C - 2004
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 39
Room Block FlexibilityListenPauseLoadi
ng
Help
Section State of the IndustryHeading into 2005 planners are surprisingly optimistic about where they stand in the areaof negotiation First a comparison of SOI reports from January 2001 January 2003 andtoday shows that planners views of negotiability of guest rooms meeting space rentalfood and beverage and AV equipmentservices have consistently improved over the pastfour years So on a scale of one to five with five being extremely negotiable and 1 beingnot at all negotiable in the current climate our respondents found that guest rooms wereat 369 meeting space rental at 381 food and beverage at 308 and AVequipmentservices at 293Of course the struggling economy over the past four years bears out our respondents
conclusion that the market has favored buyers But as the economy began a wobbly butunmistakable recovery in many sectors by mid-2004 it seems that planners presentopinions of how negotiability will change in the coming year might not match that newreality Case in point 293 percent of respondents said that guest room rates will becomeeven more negotiable in 2005 while another 381 percent said there will be no change innegotiability For meeting space 308 percent said that would be more negotiable while459 percent said there would be no change For food and beverage 238 percent said itwould be more negotiable while 461 percent expected no change And for AVequipmentservices 205 said it would be more negotiable while 583 percent expectedno changeFurthermore PricewaterhouseCoopers estimates that hotels revenue per available room
(RevPAR) was 63 percent higher in 2004 than in 2003--the largest one-year jump in 20years and a testament to newfound supplier strength But perhaps the most significantestimate planners should consider is this Smith Travel Research and other lodgingindustry research firms predict guest room rates will go up between three and five percentin both 2005 and 2006 while some major cities already have been able to raise rates wellbeyond that number because their occupancies are getting back to healthy levels not seensince 2000I think there is a lagging perception among planners about todays negotiating climatesays Fred Shea vice president of sales for Chicago-based Hyatt Hotel Corp The hotelindustrys stronger-than-anticipated results from the second half of 2004 and thepredictions for healthy growth coming on the heels of those results dont match what
planners have been able to negotiate to this point Many planners have not yet digestedthe most recent numbers but they will start seeing the effects of those numbers as theybook their meetings for the next two years Basically favorable rates are going to becomeharder to findWeve seen meeting group attendance come back much stronger in than the transientmarket which is just now returning to the East and West coasts but still lags in themiddle of the country adds Mike Beardsley VP of field sales for Bethesda MD-basedMarriott International And as we look at 2005 we see that the groups who are booking
thornyuml
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 49
inside 12 months will be subjected to larger rate increases than those who have alreadybooked or who will book events with lead times beyond 12 monthsTHE FLIP SIDEAs daunting as the hoteliers assessments sound there is another way of looking atnegotiability in the face of impending rate hikes--one that our SOI respondents seem to
have picked up onIn the air travel market a research finding released in November states that the majorityof fares on existing routes are the lowest they have ever been after inflation is factoredin And planners apparently have sensed that this market has hit bottom because just 20percent of them think that airfares will be more negotiable in 2005 while 45 percentestimate no change and 34 percent predict fares to be less negotiable In short whenprices drop on their own negotiability fades awayThis raises the hope then that as rates go up for guest rooms as well as other items andservices related to meetings planners will in fact have ample opportunity to negotiate--particularly in those areas where hotels typically reap the highest margins of profit Butthere are only two ways for the optimism expressed by SOI respondents regarding
negotiation to become reality First planners must undertake efforts to track not only thedirect revenues that hotels and meeting venues reap from their meetings but also theancillary revenues generated by attendees at the hotels and meeting venues and eventhroughout the whole destination Second planners must either book their meetingsfurther into the future or approach suppliers with flexibility on dates andor locationOn the first point Larry Luteran VP of group sales and industry relations for BeverlyHills-based Hilton Hotels Corp says that we always look at the potential totalprofitability of an event so the more data a planner can produce on what her grouptraditionally spends in each area the better a deal shell be able to strike because therewill be room for each party to maneuver so that they all get what they want Actuallywell take a small financial hit in one area or another if the overall profitability picture isright for usMarriotts Beardsley adds that the more that planners can keep elements such as cateredreceptions banquets and other affiliated functions inside the hotel the better able theyllbe to bring down guest room rates--which is generally the most profitable item for us--or get some other concession or upgrade Whats more any access planners give us to solicitexhibitors to hold their related hospitality suites and functions at the property will help agroups leverage Interestingly Beardsley recently negotiated for a meeting--as theplanner--and was able to bring his groups guest room rate down by $15 because he didnot need all of the complimentary guest rooms the group earned and returned them to thehotels inventoryToday many hotels are quite willing to negotiate with groups that will frequent thepropertys spa or golf course Spa revenue is critical to us and its going to stay thatway says Hyatts Shea Use of the golf course and spending in the retail outlets onproperty are desirable too But with recent research showing that spa users also spendmore on all discretionary items throughout the property we now look hard at how manyattendees of each meeting will use the spaAnd to capture ancillary revenue from the business center to the in-room minibars andeverything in between several hotel chains say they are improving internal systems toallow for a complete revenue picture of each meeting Planners get miffed when
872019 Att 11
httpslidepdfcomreaderfullatt-11 59
hoteliers ask for information from past meetings even though the hoteliers didnt providea way to capture all the data when those meetings took place Shea saysAs for planners gaining leverage through flexibility on dates and location Luteran notesthat this might be the only way to land a 2005 meeting in a desirable city at a priceresembling what groups paid in 2004 In a hot destination the exceptions to the rule
almost always revolve around filling a hole a property has over a particular set of dayshe says Also some cities have not rebounded as strongly as others on the transientbusiness side so there are some great properties still with sluggish occupancy Workingwith a chains national office is the best way to cast the net widely and we are upfrontabout our high-value opportunities around the country because thats where a planner canhelp us out significantlyAttritionIn the two years since our last SOI report several positive developments have lessenedthe impact of meeting cancellation and attrition Market shifts technological advancesand old-fashioned ingenuity have made these issues less feared less time-consuming andless onerous to suppliers and planners alike
Across the board hoteliers state that the economy of the recent past forced planners toadapt their attrition strategies such that those planners are reaping the benefits todayAttrition is not as much of an issue as in past years says Marriotts Beardsley After the headaches they had to deal with during their 2002 and 2003 meetings planners cutback room-block sizes when planning their 2004 and 2005 meetings So right now manygroups are picking up more rooms than they blocked out and its reaching a point wheresome have to scramble a bit to find more rooms The result in 2005 will be slightlylarger room blocks and longer lead times to secure themHyatts Shea echoes Beardsleys sentiments Two things have happened in the past yearCustomers and hotels have done a better job at booking conservatively and groups havebeen getting much better actual pickup because of the improved economyActually its more than just the economy that is driving high rates of block fulfillmentthese days Two years ago planners were more or less terrified by their inability to stopattendees from booking outside the room block by using merchant-model Web sites suchas Expedia and Travelocity But perhaps the most shocking finding in the 2005 SOIreport is that more planners now feel that the Internet will help them cut their rates of attrition (308 percent) rather than contribute to higher rates of attrition (222 percent)From an online perspective a change for the better started with hotels getting back control of their inventory from outside sites Shea says The rate guarantees chains haveput into effect on their own Web sites have helped keep attendees from straying Andmany organizations have taken control of where their attendees stay by creating Web-based registration modules that push people to book their housing during the same onlinevisitFurther hotels themselves are creating Web sites to help planners boost attendance andtimely in-the-block bookings in particular For instance the Hiltons of Washingtoncollectively offer the site wwwdcmarketingtoolscom which combines our hotels bestimagery marketing materials and e-commerce tactics along with best practices tomaximize meeting attendance says a Hilton spokesman The tool was also designed tohelp create excitement and interest in the city of Washington and ensure primary usage of the official convention hotel
872019 Att 11
httpslidepdfcomreaderfullatt-11 69
Luteran feels that in addition to all the proactive steps taken by planners and hoteliers theeconomy will still be a primary solution to attrition The way our hotels operate is tofirst secure a group base at a hotel and then have the last remaining out-of-block roomsfor those dates command the highest prices Of course when the bottom fell out of thetransient market four years ago the model was flipped in that the last rooms left were
offered below the group rate This posed a credibility problem both for planners withtheir attendees and for us with our planner clients But improved transient demand is thecure for this and we see that in 2005 the rooms remaining after the groups cutoff datewill indeed command the highest pricesWHEN ATTRITION ATTACKSOf course most association and corporate planners will deal with an attrition situation atsome point despite their preventative efforts And thats when the most creative plannersand suppliers will shine by finding a solution that satisfies both partiesIn fact there seem to be many creative folks in the meetings business because only 181percent of SOI respondents who incurred attrition in 2004 paid the full attrition feestipulated in the contract This does not surprise Hiltons Luteran Were in business for
the long haul and we want to work out deals during and after the meeting not just tomitigate a situation but also to make sure the customer is satisfied and will return to us inthe future with businessAs for the 286 percent of planners who said they paid part of the stipulated attrition feein 2004 hoteliers appear generally satisfied with the alternative forms of compensationthey receive in lieu of cash Were getting a lot more cooperation from clients who dontpick up their block to switch an off-site food and beverage event back into the hotel or give us another meeting or two in the same calendar year or a combination of both saysShea But Luteran notes that the fact that we gain a meeting in the future does not makeus whole because it doesnt help us with the rooms that were left vacant on the originaldates But there is a magic formula to mitigate every bad situation and we try hard tofind it with each clientWhen all else fails the best way for planners to avoid attrition is to release portions of their room block as early as possible so the hotel can sell those rooms With transientdemand rising in fact most hotels should not have significant trouble reselling roomsreleased at 30 days out which is the median penalty-free cutoff that planners agreed to intheir contracts according to our SOI respondentsBut despite the fact that nearly 40 percent of respondents had between 15 and 30 days torelease rooms without penalty in 2004--and nearly 26 percent had between just 7 and 14days--Shea says that those figures would be very surprising to see in todays contractsThen again if you are going to a city at a time where things are wide open well be veryflexible with final cutoff datesEssential HighlightsNegotiation Trendsbull Several research firms predict guest room rates will rise by three to five percent both in2005 and 2006bull To bring down room rates planners must present both direct meeting expenditures andancillary spending by attendees in all areas Properties are creating software to assist incapturing such data
872019 Att 11
httpslidepdfcomreaderfullatt-11 79
bull Some cities have not rebounded as strongly as others hotel chains national offices willpromote opportunities in destinations where planners have leveragePlanners who spend more time on negotiations and contracts than 2 years ago2002 732004 56
Average expenditures per meetingLegend for Chart
B - 2004C - CorporateD - Association
A B C D
Accommodations $18108 $16177 $15809Food amp Beverage $24844 $17964 $39174
Meeting Space Rental $2773 $2028 $4166ExhibitExpo Space $6972 $3615 $12691SpeakerTrainer $5838 $4330 $9316AV EquipmentServices $8510 $5647 $14124Airfare $17100 $10157 $9314Ground Transportation $2808 $2451 $2958On-Site Staff $3043 $2245 $4845Exhibit ServicesDeacutecor $7581 $4884 $13442Negotiability of meeting commoditiesLegend for Chart
B - 2002C - 2004
A B C
Sleeping rooms 360 369Food amp beverage 300 308AV equipment amp services 290 293Meeting space rental 380 381Air travel 260 238DMC services 300 289FampB attrition terms 330 306Guest room attrition terms 330 314
Legend for Chart
B - 2002C - 2004
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 49
inside 12 months will be subjected to larger rate increases than those who have alreadybooked or who will book events with lead times beyond 12 monthsTHE FLIP SIDEAs daunting as the hoteliers assessments sound there is another way of looking atnegotiability in the face of impending rate hikes--one that our SOI respondents seem to
have picked up onIn the air travel market a research finding released in November states that the majorityof fares on existing routes are the lowest they have ever been after inflation is factoredin And planners apparently have sensed that this market has hit bottom because just 20percent of them think that airfares will be more negotiable in 2005 while 45 percentestimate no change and 34 percent predict fares to be less negotiable In short whenprices drop on their own negotiability fades awayThis raises the hope then that as rates go up for guest rooms as well as other items andservices related to meetings planners will in fact have ample opportunity to negotiate--particularly in those areas where hotels typically reap the highest margins of profit Butthere are only two ways for the optimism expressed by SOI respondents regarding
negotiation to become reality First planners must undertake efforts to track not only thedirect revenues that hotels and meeting venues reap from their meetings but also theancillary revenues generated by attendees at the hotels and meeting venues and eventhroughout the whole destination Second planners must either book their meetingsfurther into the future or approach suppliers with flexibility on dates andor locationOn the first point Larry Luteran VP of group sales and industry relations for BeverlyHills-based Hilton Hotels Corp says that we always look at the potential totalprofitability of an event so the more data a planner can produce on what her grouptraditionally spends in each area the better a deal shell be able to strike because therewill be room for each party to maneuver so that they all get what they want Actuallywell take a small financial hit in one area or another if the overall profitability picture isright for usMarriotts Beardsley adds that the more that planners can keep elements such as cateredreceptions banquets and other affiliated functions inside the hotel the better able theyllbe to bring down guest room rates--which is generally the most profitable item for us--or get some other concession or upgrade Whats more any access planners give us to solicitexhibitors to hold their related hospitality suites and functions at the property will help agroups leverage Interestingly Beardsley recently negotiated for a meeting--as theplanner--and was able to bring his groups guest room rate down by $15 because he didnot need all of the complimentary guest rooms the group earned and returned them to thehotels inventoryToday many hotels are quite willing to negotiate with groups that will frequent thepropertys spa or golf course Spa revenue is critical to us and its going to stay thatway says Hyatts Shea Use of the golf course and spending in the retail outlets onproperty are desirable too But with recent research showing that spa users also spendmore on all discretionary items throughout the property we now look hard at how manyattendees of each meeting will use the spaAnd to capture ancillary revenue from the business center to the in-room minibars andeverything in between several hotel chains say they are improving internal systems toallow for a complete revenue picture of each meeting Planners get miffed when
872019 Att 11
httpslidepdfcomreaderfullatt-11 59
hoteliers ask for information from past meetings even though the hoteliers didnt providea way to capture all the data when those meetings took place Shea saysAs for planners gaining leverage through flexibility on dates and location Luteran notesthat this might be the only way to land a 2005 meeting in a desirable city at a priceresembling what groups paid in 2004 In a hot destination the exceptions to the rule
almost always revolve around filling a hole a property has over a particular set of dayshe says Also some cities have not rebounded as strongly as others on the transientbusiness side so there are some great properties still with sluggish occupancy Workingwith a chains national office is the best way to cast the net widely and we are upfrontabout our high-value opportunities around the country because thats where a planner canhelp us out significantlyAttritionIn the two years since our last SOI report several positive developments have lessenedthe impact of meeting cancellation and attrition Market shifts technological advancesand old-fashioned ingenuity have made these issues less feared less time-consuming andless onerous to suppliers and planners alike
Across the board hoteliers state that the economy of the recent past forced planners toadapt their attrition strategies such that those planners are reaping the benefits todayAttrition is not as much of an issue as in past years says Marriotts Beardsley After the headaches they had to deal with during their 2002 and 2003 meetings planners cutback room-block sizes when planning their 2004 and 2005 meetings So right now manygroups are picking up more rooms than they blocked out and its reaching a point wheresome have to scramble a bit to find more rooms The result in 2005 will be slightlylarger room blocks and longer lead times to secure themHyatts Shea echoes Beardsleys sentiments Two things have happened in the past yearCustomers and hotels have done a better job at booking conservatively and groups havebeen getting much better actual pickup because of the improved economyActually its more than just the economy that is driving high rates of block fulfillmentthese days Two years ago planners were more or less terrified by their inability to stopattendees from booking outside the room block by using merchant-model Web sites suchas Expedia and Travelocity But perhaps the most shocking finding in the 2005 SOIreport is that more planners now feel that the Internet will help them cut their rates of attrition (308 percent) rather than contribute to higher rates of attrition (222 percent)From an online perspective a change for the better started with hotels getting back control of their inventory from outside sites Shea says The rate guarantees chains haveput into effect on their own Web sites have helped keep attendees from straying Andmany organizations have taken control of where their attendees stay by creating Web-based registration modules that push people to book their housing during the same onlinevisitFurther hotels themselves are creating Web sites to help planners boost attendance andtimely in-the-block bookings in particular For instance the Hiltons of Washingtoncollectively offer the site wwwdcmarketingtoolscom which combines our hotels bestimagery marketing materials and e-commerce tactics along with best practices tomaximize meeting attendance says a Hilton spokesman The tool was also designed tohelp create excitement and interest in the city of Washington and ensure primary usage of the official convention hotel
872019 Att 11
httpslidepdfcomreaderfullatt-11 69
Luteran feels that in addition to all the proactive steps taken by planners and hoteliers theeconomy will still be a primary solution to attrition The way our hotels operate is tofirst secure a group base at a hotel and then have the last remaining out-of-block roomsfor those dates command the highest prices Of course when the bottom fell out of thetransient market four years ago the model was flipped in that the last rooms left were
offered below the group rate This posed a credibility problem both for planners withtheir attendees and for us with our planner clients But improved transient demand is thecure for this and we see that in 2005 the rooms remaining after the groups cutoff datewill indeed command the highest pricesWHEN ATTRITION ATTACKSOf course most association and corporate planners will deal with an attrition situation atsome point despite their preventative efforts And thats when the most creative plannersand suppliers will shine by finding a solution that satisfies both partiesIn fact there seem to be many creative folks in the meetings business because only 181percent of SOI respondents who incurred attrition in 2004 paid the full attrition feestipulated in the contract This does not surprise Hiltons Luteran Were in business for
the long haul and we want to work out deals during and after the meeting not just tomitigate a situation but also to make sure the customer is satisfied and will return to us inthe future with businessAs for the 286 percent of planners who said they paid part of the stipulated attrition feein 2004 hoteliers appear generally satisfied with the alternative forms of compensationthey receive in lieu of cash Were getting a lot more cooperation from clients who dontpick up their block to switch an off-site food and beverage event back into the hotel or give us another meeting or two in the same calendar year or a combination of both saysShea But Luteran notes that the fact that we gain a meeting in the future does not makeus whole because it doesnt help us with the rooms that were left vacant on the originaldates But there is a magic formula to mitigate every bad situation and we try hard tofind it with each clientWhen all else fails the best way for planners to avoid attrition is to release portions of their room block as early as possible so the hotel can sell those rooms With transientdemand rising in fact most hotels should not have significant trouble reselling roomsreleased at 30 days out which is the median penalty-free cutoff that planners agreed to intheir contracts according to our SOI respondentsBut despite the fact that nearly 40 percent of respondents had between 15 and 30 days torelease rooms without penalty in 2004--and nearly 26 percent had between just 7 and 14days--Shea says that those figures would be very surprising to see in todays contractsThen again if you are going to a city at a time where things are wide open well be veryflexible with final cutoff datesEssential HighlightsNegotiation Trendsbull Several research firms predict guest room rates will rise by three to five percent both in2005 and 2006bull To bring down room rates planners must present both direct meeting expenditures andancillary spending by attendees in all areas Properties are creating software to assist incapturing such data
872019 Att 11
httpslidepdfcomreaderfullatt-11 79
bull Some cities have not rebounded as strongly as others hotel chains national offices willpromote opportunities in destinations where planners have leveragePlanners who spend more time on negotiations and contracts than 2 years ago2002 732004 56
Average expenditures per meetingLegend for Chart
B - 2004C - CorporateD - Association
A B C D
Accommodations $18108 $16177 $15809Food amp Beverage $24844 $17964 $39174
Meeting Space Rental $2773 $2028 $4166ExhibitExpo Space $6972 $3615 $12691SpeakerTrainer $5838 $4330 $9316AV EquipmentServices $8510 $5647 $14124Airfare $17100 $10157 $9314Ground Transportation $2808 $2451 $2958On-Site Staff $3043 $2245 $4845Exhibit ServicesDeacutecor $7581 $4884 $13442Negotiability of meeting commoditiesLegend for Chart
B - 2002C - 2004
A B C
Sleeping rooms 360 369Food amp beverage 300 308AV equipment amp services 290 293Meeting space rental 380 381Air travel 260 238DMC services 300 289FampB attrition terms 330 306Guest room attrition terms 330 314
Legend for Chart
B - 2002C - 2004
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 59
hoteliers ask for information from past meetings even though the hoteliers didnt providea way to capture all the data when those meetings took place Shea saysAs for planners gaining leverage through flexibility on dates and location Luteran notesthat this might be the only way to land a 2005 meeting in a desirable city at a priceresembling what groups paid in 2004 In a hot destination the exceptions to the rule
almost always revolve around filling a hole a property has over a particular set of dayshe says Also some cities have not rebounded as strongly as others on the transientbusiness side so there are some great properties still with sluggish occupancy Workingwith a chains national office is the best way to cast the net widely and we are upfrontabout our high-value opportunities around the country because thats where a planner canhelp us out significantlyAttritionIn the two years since our last SOI report several positive developments have lessenedthe impact of meeting cancellation and attrition Market shifts technological advancesand old-fashioned ingenuity have made these issues less feared less time-consuming andless onerous to suppliers and planners alike
Across the board hoteliers state that the economy of the recent past forced planners toadapt their attrition strategies such that those planners are reaping the benefits todayAttrition is not as much of an issue as in past years says Marriotts Beardsley After the headaches they had to deal with during their 2002 and 2003 meetings planners cutback room-block sizes when planning their 2004 and 2005 meetings So right now manygroups are picking up more rooms than they blocked out and its reaching a point wheresome have to scramble a bit to find more rooms The result in 2005 will be slightlylarger room blocks and longer lead times to secure themHyatts Shea echoes Beardsleys sentiments Two things have happened in the past yearCustomers and hotels have done a better job at booking conservatively and groups havebeen getting much better actual pickup because of the improved economyActually its more than just the economy that is driving high rates of block fulfillmentthese days Two years ago planners were more or less terrified by their inability to stopattendees from booking outside the room block by using merchant-model Web sites suchas Expedia and Travelocity But perhaps the most shocking finding in the 2005 SOIreport is that more planners now feel that the Internet will help them cut their rates of attrition (308 percent) rather than contribute to higher rates of attrition (222 percent)From an online perspective a change for the better started with hotels getting back control of their inventory from outside sites Shea says The rate guarantees chains haveput into effect on their own Web sites have helped keep attendees from straying Andmany organizations have taken control of where their attendees stay by creating Web-based registration modules that push people to book their housing during the same onlinevisitFurther hotels themselves are creating Web sites to help planners boost attendance andtimely in-the-block bookings in particular For instance the Hiltons of Washingtoncollectively offer the site wwwdcmarketingtoolscom which combines our hotels bestimagery marketing materials and e-commerce tactics along with best practices tomaximize meeting attendance says a Hilton spokesman The tool was also designed tohelp create excitement and interest in the city of Washington and ensure primary usage of the official convention hotel
872019 Att 11
httpslidepdfcomreaderfullatt-11 69
Luteran feels that in addition to all the proactive steps taken by planners and hoteliers theeconomy will still be a primary solution to attrition The way our hotels operate is tofirst secure a group base at a hotel and then have the last remaining out-of-block roomsfor those dates command the highest prices Of course when the bottom fell out of thetransient market four years ago the model was flipped in that the last rooms left were
offered below the group rate This posed a credibility problem both for planners withtheir attendees and for us with our planner clients But improved transient demand is thecure for this and we see that in 2005 the rooms remaining after the groups cutoff datewill indeed command the highest pricesWHEN ATTRITION ATTACKSOf course most association and corporate planners will deal with an attrition situation atsome point despite their preventative efforts And thats when the most creative plannersand suppliers will shine by finding a solution that satisfies both partiesIn fact there seem to be many creative folks in the meetings business because only 181percent of SOI respondents who incurred attrition in 2004 paid the full attrition feestipulated in the contract This does not surprise Hiltons Luteran Were in business for
the long haul and we want to work out deals during and after the meeting not just tomitigate a situation but also to make sure the customer is satisfied and will return to us inthe future with businessAs for the 286 percent of planners who said they paid part of the stipulated attrition feein 2004 hoteliers appear generally satisfied with the alternative forms of compensationthey receive in lieu of cash Were getting a lot more cooperation from clients who dontpick up their block to switch an off-site food and beverage event back into the hotel or give us another meeting or two in the same calendar year or a combination of both saysShea But Luteran notes that the fact that we gain a meeting in the future does not makeus whole because it doesnt help us with the rooms that were left vacant on the originaldates But there is a magic formula to mitigate every bad situation and we try hard tofind it with each clientWhen all else fails the best way for planners to avoid attrition is to release portions of their room block as early as possible so the hotel can sell those rooms With transientdemand rising in fact most hotels should not have significant trouble reselling roomsreleased at 30 days out which is the median penalty-free cutoff that planners agreed to intheir contracts according to our SOI respondentsBut despite the fact that nearly 40 percent of respondents had between 15 and 30 days torelease rooms without penalty in 2004--and nearly 26 percent had between just 7 and 14days--Shea says that those figures would be very surprising to see in todays contractsThen again if you are going to a city at a time where things are wide open well be veryflexible with final cutoff datesEssential HighlightsNegotiation Trendsbull Several research firms predict guest room rates will rise by three to five percent both in2005 and 2006bull To bring down room rates planners must present both direct meeting expenditures andancillary spending by attendees in all areas Properties are creating software to assist incapturing such data
872019 Att 11
httpslidepdfcomreaderfullatt-11 79
bull Some cities have not rebounded as strongly as others hotel chains national offices willpromote opportunities in destinations where planners have leveragePlanners who spend more time on negotiations and contracts than 2 years ago2002 732004 56
Average expenditures per meetingLegend for Chart
B - 2004C - CorporateD - Association
A B C D
Accommodations $18108 $16177 $15809Food amp Beverage $24844 $17964 $39174
Meeting Space Rental $2773 $2028 $4166ExhibitExpo Space $6972 $3615 $12691SpeakerTrainer $5838 $4330 $9316AV EquipmentServices $8510 $5647 $14124Airfare $17100 $10157 $9314Ground Transportation $2808 $2451 $2958On-Site Staff $3043 $2245 $4845Exhibit ServicesDeacutecor $7581 $4884 $13442Negotiability of meeting commoditiesLegend for Chart
B - 2002C - 2004
A B C
Sleeping rooms 360 369Food amp beverage 300 308AV equipment amp services 290 293Meeting space rental 380 381Air travel 260 238DMC services 300 289FampB attrition terms 330 306Guest room attrition terms 330 314
Legend for Chart
B - 2002C - 2004
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 69
Luteran feels that in addition to all the proactive steps taken by planners and hoteliers theeconomy will still be a primary solution to attrition The way our hotels operate is tofirst secure a group base at a hotel and then have the last remaining out-of-block roomsfor those dates command the highest prices Of course when the bottom fell out of thetransient market four years ago the model was flipped in that the last rooms left were
offered below the group rate This posed a credibility problem both for planners withtheir attendees and for us with our planner clients But improved transient demand is thecure for this and we see that in 2005 the rooms remaining after the groups cutoff datewill indeed command the highest pricesWHEN ATTRITION ATTACKSOf course most association and corporate planners will deal with an attrition situation atsome point despite their preventative efforts And thats when the most creative plannersand suppliers will shine by finding a solution that satisfies both partiesIn fact there seem to be many creative folks in the meetings business because only 181percent of SOI respondents who incurred attrition in 2004 paid the full attrition feestipulated in the contract This does not surprise Hiltons Luteran Were in business for
the long haul and we want to work out deals during and after the meeting not just tomitigate a situation but also to make sure the customer is satisfied and will return to us inthe future with businessAs for the 286 percent of planners who said they paid part of the stipulated attrition feein 2004 hoteliers appear generally satisfied with the alternative forms of compensationthey receive in lieu of cash Were getting a lot more cooperation from clients who dontpick up their block to switch an off-site food and beverage event back into the hotel or give us another meeting or two in the same calendar year or a combination of both saysShea But Luteran notes that the fact that we gain a meeting in the future does not makeus whole because it doesnt help us with the rooms that were left vacant on the originaldates But there is a magic formula to mitigate every bad situation and we try hard tofind it with each clientWhen all else fails the best way for planners to avoid attrition is to release portions of their room block as early as possible so the hotel can sell those rooms With transientdemand rising in fact most hotels should not have significant trouble reselling roomsreleased at 30 days out which is the median penalty-free cutoff that planners agreed to intheir contracts according to our SOI respondentsBut despite the fact that nearly 40 percent of respondents had between 15 and 30 days torelease rooms without penalty in 2004--and nearly 26 percent had between just 7 and 14days--Shea says that those figures would be very surprising to see in todays contractsThen again if you are going to a city at a time where things are wide open well be veryflexible with final cutoff datesEssential HighlightsNegotiation Trendsbull Several research firms predict guest room rates will rise by three to five percent both in2005 and 2006bull To bring down room rates planners must present both direct meeting expenditures andancillary spending by attendees in all areas Properties are creating software to assist incapturing such data
872019 Att 11
httpslidepdfcomreaderfullatt-11 79
bull Some cities have not rebounded as strongly as others hotel chains national offices willpromote opportunities in destinations where planners have leveragePlanners who spend more time on negotiations and contracts than 2 years ago2002 732004 56
Average expenditures per meetingLegend for Chart
B - 2004C - CorporateD - Association
A B C D
Accommodations $18108 $16177 $15809Food amp Beverage $24844 $17964 $39174
Meeting Space Rental $2773 $2028 $4166ExhibitExpo Space $6972 $3615 $12691SpeakerTrainer $5838 $4330 $9316AV EquipmentServices $8510 $5647 $14124Airfare $17100 $10157 $9314Ground Transportation $2808 $2451 $2958On-Site Staff $3043 $2245 $4845Exhibit ServicesDeacutecor $7581 $4884 $13442Negotiability of meeting commoditiesLegend for Chart
B - 2002C - 2004
A B C
Sleeping rooms 360 369Food amp beverage 300 308AV equipment amp services 290 293Meeting space rental 380 381Air travel 260 238DMC services 300 289FampB attrition terms 330 306Guest room attrition terms 330 314
Legend for Chart
B - 2002C - 2004
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 79
bull Some cities have not rebounded as strongly as others hotel chains national offices willpromote opportunities in destinations where planners have leveragePlanners who spend more time on negotiations and contracts than 2 years ago2002 732004 56
Average expenditures per meetingLegend for Chart
B - 2004C - CorporateD - Association
A B C D
Accommodations $18108 $16177 $15809Food amp Beverage $24844 $17964 $39174
Meeting Space Rental $2773 $2028 $4166ExhibitExpo Space $6972 $3615 $12691SpeakerTrainer $5838 $4330 $9316AV EquipmentServices $8510 $5647 $14124Airfare $17100 $10157 $9314Ground Transportation $2808 $2451 $2958On-Site Staff $3043 $2245 $4845Exhibit ServicesDeacutecor $7581 $4884 $13442Negotiability of meeting commoditiesLegend for Chart
B - 2002C - 2004
A B C
Sleeping rooms 360 369Food amp beverage 300 308AV equipment amp services 290 293Meeting space rental 380 381Air travel 260 238DMC services 300 289FampB attrition terms 330 306Guest room attrition terms 330 314
Legend for Chart
B - 2002C - 2004
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 89
A B C
Cancellation Trends and Penalties
Planners who cancelled a contracted meeting 320 205
Planners who cancelled a contracted meeting 320 205
Of those planners who paid full cancellation fee 168 181
Of those planners who paid partial cancellationfee 274 286
Attrition Trends and Penalties
Planners who had at least one meeting miss
its final room commitment 371 280Of those planners who paid partial or fullattrition fee 541 471Room Block FlexibilityLegend for Chart
B - 2004
A B
Median number of days before event that roomblock could be cut without penalty in 2004 30
Planners who had between 15 and 30 days to cutthe room block 399
Planners who had between 7 and 14 days to cut theroom block 259
Planners who feel the Internet will contribute tomore attrition in 2005 222
Percentage of planners who feel that the Internetwill contribute to decreased attrition in 2005 308
Top 3 perceived factors for increased attrition in 2005
Attendees inability to travel 382
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
872019 Att 11
httpslidepdfcomreaderfullatt-11 99
Virtual meetings 279Regional trade shows 192~~~~~~~~By Robert CareyCopyright of Successful Meetings is the property of Northstar Travel Group LLC and its
content may not be copied or emailed to multiple sites or posted to a listserv without thecopyright holders express written permission However users may print download or email articles for individual useResult List Refine Search Result 37 of 1744345
ltobject classid=
ViewDetailed Record HTML Full TextSimilar ResultsFind Similar Results using SmartText Searching
ToolsDelivery Options
Added Add to folder Print E-mail Save Cite Export Create Note Permalink
PermalinkBookmark
Top of PageEBSCO Support Site Privacy Policy Terms of Use Copyright copy 2010 EBSCO Industries Inc All rights reserved
EBSCO Publishing Green Initiatives
Bottom of Form
thornyuml
