the third party planner

Brian Stevens - "A Warranty for Your Meetings"
Fall 2006

Brian D. Stevens is president and CEO of ConferenceDirect, a hospitality resource company headquartered in L.A.  After a successful career with Hilton Hotels, Brian founded ConferenceDirect in 1998.

: What lead you to the hospitality industry?

Brian:  My father was the executive director of the American Bankers Association.  He relocated the association from Manhattan to Washington D.C., when I was in high school.  Originally, I was studying theology and was planning on becoming a priest.  I took a leave of absence from college and my dad, who was a big hotel client, introduced me to some of his hotel sales friends.  After the meetings, I decided to apply to a training program at Hilton Hotels.

When I got to be a senior VP at Hilton, I became concerned about the double digit inflation of the commissions being paid (to third parties) and I tried to study how we could eliminate or minimize them.  It just wasn’t possible.  You can’t be “counter trendy” when it comes to an important new market.  So, I decided to start my own third party company.

: How does ConferenceDirect compare to other third party companies?

Brian: Obviously, HelmsBriscoe is seven years older and they are much, much larger in terms of their number of associates.  I think they are at 700-800.  We’re about 200 right now.  Interestingly, when HelmsBriscoe was seven years old, they had 70 associates so we’re twice as big as HB when they were our age.

I believe that our largest competitor is Conferon (now Experient).  Their full-service business model is more where ConferenceDirect is headed.

: Hotel sales & marketing guru, Howard Feiertag, believes that hotel owners may be looking for ways to reduce the cost of sales – perhaps by outsourcing more to third-parties.  Do you agree?

Brian: Howard is certainly a respected senior statesman for the industry.  He may not realize that hotels have more sales people on staff today than they have in a long time.  Granted, after 9/11, hotels did what I considered to be a counterintuitive move when they eliminated a number of sales positions when they should have been adding sales staff.

Our experience is that owners are now focused on getting more yield from groups.  One trend that we are seeing is that hotels are requiring larger F&B commitments from groups – in some cases this has tripled in one year for the same group in the same hotel.

Essentially, the owners are trying to complement their guestroom rate with their other facilities.

For example, Las Vegas looks not only at your gaming profile, but at your F&B profile in addition to your rooms revenue.  Then, they pick and choose which groups they want.  You can’t do that with a computer or with a third party.

I think that the sales people have a harder time right now.  Smith Travel research shows that we have the highest demand and lowest supply growth since 1998.  The revenue management people and the owners are demanding the highest rates in key cities (cities where you can see water outside the windows).  The hotel sales people are having to go to their clients that had meetings there last year and say, “We would love to have you back, but you’ve got to figure out a way to add a luncheon, a dinner or maybe both.”

From my lens, it’s an extra heavy sales job.  Most of us were brought up to look at the requirements of the group, determine if you want it or not, and accept it or reject it.  Meeting planners need to understand that may have to change their traditional ways in order to get the space and/or the dates that they want.

:  When will this sellers’ market end, and why?

Brian: It will end in 2008 in the 4th quarter, or sooner.  It’s simply a function of what’s on the books for new full-service hotel development.

The lead time to build a hotel is anywhere from 2-10 years.  After 9/11, anyone with a hotel in development went ahead and finished it, but there wasn’t a new shovel put into the ground.  If they had plans, they pulled back or their financing pulled back.

:  Do you think the demand for hotel rooms and meeting space will continue to grow?

Brian:  We can’t predict demand, but we know how many new builds are in the plans right now.

:  If you were addressing a group of meeting planners who had never used a third-party, what advice would you have for them?

Brian:  I recently had a client who was informed by the hotel that they had a “human error” double booking.  She had to go back to her boss and tell him that the ballroom for their opening reception was no longer available.

Since ConferenceDirect booked the meeting I contacted the hotel company and was able to negotiate a win-win situation.  After the whole experience was over her boss said to her, “I’m proud of the fact that you were able to (a) get our space back, and (b) get a discount on our reception because we delayed.”

Something my client said triggered in my a head a good reason for using a third party.  “It’s almost like having a warranty on your meeting,” she said.  “If something breaks, you are not shadowboxing with that hotel because you are going to go that city one time every twenty years.  The third party is going to be there every month.”

When I first relocated with Hilton Hotels, 90% of the moving companies got their business from individuals.  Today, it’s the opposite.  90% of the moving companies get their business through intermediaries.  What’s happened is that if we have to move, we go to a moving broker who sorts through all of the vendors and suggests the most appropriate one. 

Our business is going the way of the relocation industry.  Using an intermediary to discern the most appropriate vendor just makes sense.