planner + supplier

	Q & A Summer 2011
Tricia Hall, CAE, CMP, president of Tricia Hall & Associates		Michael Dominguez, VP of Global Sales for Loews Hotels & Resorts

MPG* INVITED meeting professional Tricia Hall, CAE, CMP, president of Tricia Hall & Associates, and hotelier Michael Dominguez, VP of Global Sales for Loews Hotels & Resorts, to collaborate on a Q&A project. They questioned each other. Here are the (slightly condensed) results of their candid and insightful collaboration.

tricia: A challenge for planners is securing post-meeting reports that include more than room pickup and F&B figures. Beneficial information would include ancillary spend, outlet impact and other revenue-generating areas. Can hotels provide this information to planners so that we can present more accurate meeting profiles and potential revenue to hotels bidding on our business?
mike: With the sophistication of today’s PMS systems, much of this data can easily be provided at the end of the meeting. It is a challenge to capture all of the data as the systems are only able to report on what has been charged to a guestroom. Also, it is important to know when you’re negotiating with a hotel which of the outlets or services might be leased versus hotel-owned. The spend in these areas might not have the same leverage if leased versus owned.

mike: The economic downturn presented the hotel industry with unprecedented challenges which led to extraordinary offers. How do you as a meeting professional bridge the gap between the “great deals” of the last 18 months and the push on meeting budgets over the coming years?
tricia: It’s a down market for meeting managers as well. Boards and clients are now accustomed to the bottom line advantages of the “great deals” and would love for the “great deals”
to last forever. It’s the meeting manager’s duty to understand market pressures and the scaled-back parameters of their own organizations and still get the best deal. We must educate our boards and clients about what the market will bear and determine a fair price. We know the “great deals” aren’t here to stay, but hotel rate increases should mirror the market. The current economy is not at a level to justify large increases or complete “about-faces” by the hotels. Overall, it’s my job as the planner to make sure my groups understand this phenomenon and adjust
our budgets accordingly.

tricia: At your recent Southwest Showcase presentation, you said that there is no new supply in hotel rooms thereby helping hotels increase their rates. When do you see new supply coming online and how do you see short-term rates being affected?

mike: In discussing inventory, there is virtually no supply hitting the luxury market. Total construction is down 33% through March. There is an increase of 23% in final stage planning so we should see develop- ment begin in late 2012. Most of it will be targeted into strong demand destinations like New York City. We have seen a return of hotels’ pricing power due to compression in availability, especially in the meetings area, as well as a growing booking window. This is all positive news for the industry.

mike: What other cost pressures are you experiencing in addition to the higher price of gas and its impact on airfares?
tricia: There are many areas within organizations that have been affected – reduced membership, lost sponsorships, fewer exhibitors and fewer personnel per booth, downsized staffs, shorter meetings and consolidation (resulting in smaller room blocks and less room nights booked), higher A/V and production costs, declining attendance, and corporate scrutiny in spending. The list goes on. The hope is that we are on an upward trend and I believe we are.

tricia: Because of the tough economic climate, many hotels have scaled back amenities (i.e., mini-bars, robes, concierge desk hours, etc) and in some cases reduced sales and service personnel. Do you see service standards and amenities returning over time?
mike: This is a perfect follow up to your supply and rate question. The loss in hotel profits nationally in 2009 was the steepest one-year decline since 1931. Candidly, many hotels were making choices necessary for their survival. Rate has the greatest impact in profitability and, with the return of higher rates, you will see the return of many services. As a brand, Loews resisted the temptation to find savings where the impact would be felt in the guest experience. These were lessons we learned from the 2001 recession.

mike: In addition to ROI, how has the discussion changed with the meeting professional and the CEO/Executive regarding the objectives of the meeting?
tricia: Meeting objectives have always been the critical starting point of our planning process. We are under extreme scrutiny to justify the time and money to attend an event. Content-related ROI is more critical than ever. Attendees must leave every meeting with bottom-line, tangible benefits that improve their skills and justify their time away from the office. While we have to justify every dollar, it’s not just about measuring cost savings to the organization; it’s also about what the event delivers that can be justified and measured by the attendee. Many events went away when the economy turned sour. To bring them back requires an in-depth discussion on the ROI of the event.

tricia: There appears to be a disconnect between the hotel sales/service staff and the “behind the scenes” hotel operational costs during the selling process regarding how these costs affect the planner’s budget. Any suggestions on how we could improve this communication so that all parties are aware of the real and hidden costs?
mike: One result of this economic period is that we have lost the “middle tier” of meeting professionals and hotel sales professionals. We tend to have very “senior” and very “junior” people in the industry. To bridge this gap, we need to dramatically elevate the conversation and education of each other’s business models. It starts with sales leadership at the hotels – making it a priority to teach our team members the operational impact of decisions on costs. Once the sales team has a clear understanding, it is incumbent on them to have a high-level dialogue with their meeting professional clients.

mike: We have experienced many behavioral changes as a result of the Great Recession. What changes have you experienced or witnessed regarding meetings?
tricia: I am still witnessing the decline or stagnation of revenue areas within some associations – sponsorship dollars and exhibitor revenue are still down. The traditional revenue streams for conventions are not as viable. The struggle to maintain membership and recruit new members continues to be a challenge. Attendees are more discerning in the events they attend and cost is the driving factor. The old adage of “doing more with less” is painfully true right now. The upside is that groups are being more creative in their event delivery and we are embracing technology as a part of our meeting models.

tricia: Part of the selling process is to highlight the unique features a property can offer for functions ‘within’ a meeting or event. The challenge occurs when the costs and logistics aren’t discussed. Understandably, planners should ask harder questions, but how can we avoid “the surprises?” Is there a positive way for sales managers to better convey this information?
mike: It is interesting that you mention “positive way” to convey the message. I believe that nothing is more “positive” than having all the information that I can deliver in an open and candid manner. Our ultimate job as sales professionals is to gain your trust and confidence. This can not occur if you are consistently surprised. It goes back to “bridging the gap” and understanding
that relationship building is a marathon – not a sprint. I also believe that it is important for meeting planners to always ask the question, “Is there an additional cost?” for the products or services you are requesting. This is most important today with the changes in technology.

mike: How prevalent are virtual and hybrid meetings today? Do you see this growing? How can the supplier be a better partner with these needs?
tricia: Hybrid meetings are increasing and have an obvious role. My latest experience with a virtual meeting was not ideal so I am still a little hesitant to endorse it as a delivery model that enhances the personal experience. I’m a firm believer in the importance of face-to-face meetings. I admit, I am a novice in incorporating new technology into my meetings and anxious about
increasing its presence. Suppliers can be better partners in many ways. When submitting proposals, list all of the technology services that the venue offers, not only for events but for individual guests; be upfront with the costs; counsel us on what other groups have done that might help our events; and include the hotel’s technology expert in the sales process. When designing or renovating hotels or venues, recognize that upgraded technology will set you apart.

tricia: What changes do you see in traditional hotel revenue streams (i.e., internet, business centers, in-room phone calls, etc.) and how will these changes impact future room rates?
mike: Room rates will continue to be the primary driver as other revenue streams diminish. The latest discussion is the delivery of wireless internet. With the increased demand in streaming video, hotels are reaching a critical point in bandwidth that will require significant capital to correct. One day soon, customers will be paying for extra “bandwidth” with basic wireless available in most places. The continued growth in mobile will be the driving force in how this plays out in the future.

mike: What impact have you felt by demographic changes in today’s member/attendee? Have these changes required you to alter the format or delivery of content?
tricia: Meeting managers can no longer rely on the “loyal member” to attend our events. The demand to provide strong educational content with a WOW factor is greater than ever. Yet, the “WOW budgets” no longer exist. Members and attendees are younger and they expect a different content delivery method (electronic, on-line, jazzy, highly-produced). The generational issues prove challenging when determining how to deliver content to audiences of various ages and technological experience levels. You can’t assume that everyone will have an iPad, nor can you design a program that is all lecture. Meeting logistics now involve more advanced technology that planners must understand, incorporate and pay for. You used to be able to “build it and they would come.” Now its “re-invent it so they will come.”    

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