Wednesday, November 10, 2010

An Update on What is Happening in the Hotel Industry and How it Affects Meeting Planners

An article in the Oct. 11, 2010, edition of Business Travel News (posted online October 15th) warns meeting planners to expect more difficult negotiations in 2011. According to the author, attrition clauses, demands for room cut-off dates, and deposits will become much less negotiable and planners should be prepared for this new trend. The article goes on to say that planners can still expect to negotiate freely for food and beverage credits, room upgrades, and waivers on resort fees and parking. This is helpful to know as we begin moving forward in sending out RFP’s and negotiating for sites for future meetings.

We have all been reading room rates are rising. One source for the article predicts that we could see anywhere from a 7 – 11 percent increase in room rates. Others have projected a 5 percent increase. I think we have all been expecting this increase and have just been waiting. This can be interpreted as an optimistic move on the part of the hotel industry. We also are encouraged to watch out for the hidden fees such as occupancy tax, resort fees, etc. Some properties have increased those fees in order to keep their rack rate low, yet still raise their bottom line.

The one thing not taken into account is the issue of Video Conferencing. Everyone pays lip service to this type of meeting as it a method of cutting travel and lodging costs. The question is how will this affect the bottom line in the hotel industry? Are they gearing up for meetings that include this component? If not, they need to be developing marketing strategies to the planners with ways for attendees to be video conferenced into a live event. We are constantly dealing with this issue with clients and expect to see an increase in this demand as the government begins implementing their new travel guidelines. An increase in room rates may not deter a client from using a convention property, but not having the facilities to conference others in or do a live feed out could eliminate a property from consideration.

We would love to hear your thoughts.

~ Linda Begbie • CEO & Executive Director, RDL enterprises