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the third party planners
Hugh Hunt & James Keaveny Guests in their home HUGH HUNT is the founder of Grapevine, TX-based Hunt Conference Group. James Keaveny, formerly with Hyatt and Hilton Hotels, has recently joined the group which specializes in conference site selection, exhibitor and sponsorship management, special events, and hotel and facility contracts and negotiations.
MPG Hugh: I believe that in order to be a successful meeting negotiator you have to view your hotel as your partner. The hotel is sharing their home with us. They’re going to feed us, we’re going to sleep in their rooms, and they’re going to take care of us. When it’s time for us to leave, we’re going to leave as their guests.
James: I also think it’s important for the hotel sales person to truly understand the customer and their needs and their goals for the conference. Before you think about what the customer can do for you, first learn what is most important to them.
What are some potential roadblocks to a successful negotiation? Hugh: One of the things that I’ve seen is how clients first approach a hotel. They may be too demanding on the room rate. Sometimes they don’t understand the “room nights to meeting space” ratio. Sometimes I’ve seen planners with, let’s say, a degree of arrogance. Sometimes their meeting may not be as important to the hotel as they think it is.
What is the long-term effect of the economic conditions on the buyer-seller relationship? James: The pendulum is always swinging between a buyer’s and a seller’s market. During past cycles, it’s been gradual. That’s no longer true. We saw an immediate drop in the market in 2008 and now 2009 is difficult. Hotels are doing whatever they can to make things happen so they can prevent layoffs and take care of their owner. Some planners may try to seize upon that and say, “it’s been your turn for too long and we are going to hit you hard.” That attitude may cause permanent damage to their long-term vendor relationships.
Hugh: I’ve seen that on both sides of the table.
Let’s go back to 2001 after 9-11. The hotels became very negotiable because the occupancy rate dropped to nothing. That cycle was short lived. It returned to normal fairly quickly and, I think, the partnerships continued. Now that we’re in this recession, I think a lot of planners have the attitude that we’ve been doing it the hotels’ way for too long - now it’s their turn. That’s okay to a degree. Certainly if it’s a buyers market, they are bringing business to the hotel, they’re keeping the lights on and the doors open, but you still have to look at it as a long-term partnership.
But one thing we should always remember - all is forgiven. The hotel may be disgruntled with what they had to give up in 2009 but that will all be forgotten and forgiven when you bring them a new piece of business in 2015.
Give us an example of a contract that needed to be reworked because of the economy. Hugh: One of our long-term association clients has a piece of business that has been very healthy for a number of years - 1,300 room nights peak - in the month of December plus a half million dollars in catering. You can imagine how many hotels have knocked on my door for that business.
We worked with one major brand and booked multi-year contracts for this client. We started in ’05 and booked several years through 2013. The group has a solid history with approximately 4,600 total room nights.
In 2009, our client was directly hit by the economy. Late last year, I went to our host hotel and told them that there would be no way that we could fill 4,600 room nights and needed to drop the block to 1,800 total.
To make a long story very short, our hotel partner agreed to accommodate our client. What I think really helped in the process was the history they had with my company and with the client. They knew that even though they had to downsize the group in 2009, they have the potential of having that client in future years. They “right-sized” the room block and the meeting rooms and we signed an addendum to the contract two months ago with no attrition fees. The hotel is happy, the client is happy and we will book additional meetings with them.
James: In addition, that brand is aware that we have two other tentative groups that are interested in their hotel for future years. They know that 2009 is tough and they are going to bite the bullet because of the future potential.
What other negotiation tips would you like to share? Hugh: You can’t always judge a client by one piece of business. Here’s a good example.
We have multiple clients - association, religious and corporate. Several years ago, one of our clients was going to a Southern California city with a large meeting that includes a half million dollars of catering. Normally, the meeting uses two hotels but this year the city’s convention center wanted to bid on the catering.
Another client of ours is a small religious group that was booking that same city’s convention center arena. Their meeting includes very minimal catering – perhaps two thousand dollars. I had not met the people at the center and scheduled site visits for both groups on the same day.
That morning my religious client and I went to the center to meet with the GM, the director of sales and the director of marketing. They had an elaborate food service set-up for us with lots of hoopla. After a few minutes, the center’s staff realized that this was a low-dollar customer. They gave us a just a token meeting and started disappearing.
That afternoon I showed up again with the big-budget association client. There was an odd feeling when I walked back into the boardroom and the association introduced me as their event manager. I said, “perhaps you gentlemen remember me. I was here this morning.” It was very embarrassing for those folks realizing how they had treated me and my smaller client that morning.
If I represent a client that has 10 rooms, they are just as important as the city-wide. Sometimes hotels and convention centers can be short-sighted when they meet a planner or a third-party and not appreciate their potential business. You can’t always judge a book by its cover. |
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