Wednesday, January 26, 2011

What is a Group History?

This is another topic that most meeting planners should be familiar with – the Group History.  Though the phrase is pretty self-explanatory, a new planner may not be sure what they should include or how long to keep the data.  Here is a brief overview…

Simply put, a Group History tracks all of the information about your event.  It can be used for several purposes but I believe its real power comes into play when locating and negotiating for space and rates for future placement of that event.

At a minimum, your Group History should include:
·      Dates event was previously held
·      Locations of previous events (city and venue)
·      Actual number of guest rooms used (and type of rooms used) for your event
·      Actual number of attendees/participants
·      Actual amounts spent on Food & Beverage functions
·      Total budget (amount spent) for each previous event
·      If you have Exhibits, how many exhibitors did you have each time

When compiling a Group History for an event, I don’t stop there, though.  Here are some other good pieces of information to include:
·      Function space used (number of rooms, room sets, etc.)
·      Audio-visual equipment used
·      Reservation patterns (does the group make reservations early or just before the deadline)
·      Registration patterns (again, do the attendees register early or at the last minute)
·      How much the attendees spent at the venue’s outlets (coffee bar, restaurant, gift shop, etc.)

Bear in mind that the above lists are not comprehensive but are meant to give you an idea of what you should include in creating your own Group History.  You will need to create your own list based on your event. The goal here, though, is to get as much hard data as you can about your group.  The more you know, the better placed you are come negotiation time.  Why is that?

Let’s say I have a group of 500 people for a meeting, need 400 guest rooms, 10,000 square feet of meeting space, and plan to do four meals over three days.  As a hotelier (or venue manager), you might be pretty skeptical about my numbers if I have no data to back them up.  As a result, you are more likely to build in a “safety net” in the contract to protect your property in case my group does not deliver on its promises – higher F&B minimums, perhaps, or an earlier cut-off date for room reservations, maybe.  However, if I can show you ten years of Group History for the group, I may be able to get reduced minimums or a later cut-off date.  Having a solid Group History does not guarantee that you get favorable contract offers compared to not having one – but it does show the other party that, yes, you do know what you’re talking about when it comes to the group’s needs and what they can realistically promise to deliver.

Having a Group History also allows me to be more specific in my negotiations because I know exactly what the group needs.  And, because I know exactly what my group needs (and have the History to prove it), the venue can give me a proposal that addresses those needs more directly.  They can offer incentives that my group would actually use instead of a generic incentive package that contains items irrelevant to the group.

So how much History should you have on your group?  When sending out an RFP, you should include three to five years of history (dates, locations, and venues), but I like to hold onto a Group History for as long as the group exists.  If the group has held meetings for the past 14 years, then I want to have data for all 14 years.  That much history allows me to be confident about their needs, as well as a tool for analyzing trends in the group’s requirements as needs and wants change over time.

If you don’t have that many years of data, don’t worry too much about it.  Go back and pull it out of old files if you can.  If you can’t, then start a new file where you can track all of that information in one place.  Build a Group History for your group and you will find that you have just added one more great tool to your kit.  Remember: Knowledge is Power!

~ Karl Baur, CMP • Project Director, RDL enterprises

Wednesday, January 19, 2011

Financial Goals and Funding Categories for Events

Generally speaking, there are three types of meetings when viewed from a fiscal standpoint: Revenue Generator, Break-Even, and Underwritten.

  • A Revenue Generator is a meeting in which the primary goal is to make money and to have your income for the event exceed its expenses – the more you exceed expenses, the better. While other goals may also be pursued for the event, the main focus is on ending the event with significantly more money than it cost to put it on. 
  • A Break-Even event is often confused with a Revenue Generator but they are not really the same thing; the main difference is in scale. Yes, income is still important for a Break-Even event but, once expenses are covered, more income is not necessarily desired or desirable. The basic goal here (and what sets it apart from a Revenue Generator) is to have income match expenses, with perhaps a little extra left over to use as seed money for the next event. The event should pay for itself.
  • An Underwritten event is one in which there is no expectation of turning a profit. The agency or organization hosting the event is not concerned with showing a profit or even necessarily recouping costs. You simply have a budget for the event and, so long as you don’t exceed budget, you’re in good shape.

Funding for any of these types can come from one or more of three categories of sources: internal, external, and self-supporting.

  • Internal funding is also known as organizational funding and is most common with Underwritten events such as trainings or business retreats.
  • External funding is derived primarily from sponsorships. The group hosting the event looks outside their own organization for the money to put on the event.
  • A Self-Supporting event is one in which the money to cover costs is raised from sales of registrations, exhibit space, etc.

While it is nice to be able to say a particular meeting is funded a certain way, most events use a combination of funding streams to reach their fiscal goals. And, as a planner, I find this to be both useful and interesting information to know about a client and their event: what are their financial goals for their event and where is the money coming from to pay for it? Each approach has its own strengths and weaknesses – knowing the group’s goals and funding allows me to better focus my efforts to effectively aid them in creating a successful conference.

~ Karl Baur, CMP • Project Director, RDL enterprises

Ed. Note: For more information about calculating break-even points, check out these posts: Calculating Break-Even and An Example of Break-Even Calculation

Wednesday, January 12, 2011

What is a Force Majeure Clause?

If you’ve done many contracts for meetings or conferences, you are probably familiar with the Force Majeure section (sometimes called “impossibility” or “acts of God” clauses) of hotel contracts. It's purpose is to protect the parties involved in case something catastrophic happens that makes it impossible for them to fulfill the terms of the contract and, if you are not familiar with it, you should be.

A basic clause may run something like this: “The performance of this agreement is subject to termination without liability upon the occurrence of any circumstance beyond the control of either party to the extent that such circumstance makes it illegal or impossible to provide or use the hotel facilities.”

The clause will usually go on to include examples of what qualifies for exercising the clause (disaster, war, civil disorder, government action, etc.) and what does not (such as strikes involving agents of the side seeking protection of the clause). An action date is typically included as well – the party seeking protection must notify the other party of their intent to use this clause within a certain time frame of the circumstance becoming known. The Force Majeure clause can be long and detailed or short and to the point. In either case, it should incorporate a few key elements.

First, the basic wording must be there, acknowledging that circumstances beyond the control of either the planner or the hotel may make it impossible for one or both parties to meet their contractual obligations. Immediately after 9/11, for example, many meetings were canceled due to the grounding of flights nationally for some time after the attacks – people simply could not get to meetings that required air travel. This was an event well beyond the control of the planners that made it impossible for them to meet their contractual obligations to hotels.

Second, including examples is a good idea. That helps make clear when the clause can be used and when it cannot. If there is a specific circumstance that concerns you, be sure to include it if the hotel does not have it in their existing language. For example, if you are concerned about hurricanes, include that in the list of examples. If you work with government groups, failure of the legislature to pass a budget may mean that the group will need to cancel – government action (or, in this case, inaction) could make it impossible for the group to meet its obligations.

Third, do include a “window of action” to make a decision. Once notified that a particular circumstance exists that could be a problem, immediate action should be taken – too long of a delay in activating the Force Majeure clause effectively means that you agree to continue with the contract as written.

Finally, and this one is the most important in my mind, the clause must be reciprocal. This means that it imparts the same protection to both parties. At one time, I saw many contracts with Force Majeure clauses written so as to provide protection for the hotel but none for the group contracting with them. So, a hotel could say that the recent earthquake made it impossible or unsafe for them to meet their obligations to the group but the group had no such option available to them (contractually). Fortunately, this has changed considerably over the years and most hotel contracts now do have reciprocal language here. Double-check it, though. Occasionally, I will still see one that protects one side and not both. When that happens, I make sure to change the clause to protect both parties.

~ Karl Baur, CMP • Project Director, RDL enterprises

Wednesday, January 5, 2011

How do you manage the stress of meeting planning?

“Isn’t meeting planning really stressful? How do you manage?”

These are just a couple of the questions I often get from people new to the field of meeting planning or from those who really don’t know what it is that we do. That’s OK. Most jobs have some stress – it’s nearly unavoidable in this day and age – so the questions are still valid. So how do I manage to do my job and keep my sanity? Here are my top three techniques:

One: I make sure that I have some kind of physical activity each week, preferably two or three times a week. For me, the main activity here is soccer. I get exercise, some social interaction, and don’t have to think a lot. This offers a much-needed counter to a job that often entails long hours behind a desk, working on my own or in small groups, and exerting my mind for significant periods of time.

Two: I read for pleasure. Yes, you read that right, I read for pleasure. This is a very different mental activity from reading for content or to learn a subject. It is also quite different from the types of mental activity that my job requires. I will often read during my lunch break when the change in mental stimulus will re-energize my mind and help me get through the rest of my day.

Three: I make sure to set aside time for friends, family, and/or pets. I get to relax and enjoy life. I may get together with friends for a game or movie night, cuddle with my cats, or simply spend quality time with my wife and daughter. It really doesn’t matter what I’m doing – so long as I’m doing something with them.

Ultimately, though, what this really all comes down to finding things to do that you enjoy that can offer a mental and physical change from the routine of your work. If variety is the spice of life, then add as much spice as you can – it will make life, and your job, much more fun.

~ Karl Baur, CMP • Project Director, RDL enterprises