Attrition Is Back

Anecdotally, it seems hotels were more lax during the recession about charging attrition fees—penalties were almost non-existent. But that has changed. “Hotels have really strengthened their positions on attrition and on cancellation,” says Bill Bohde, senior vice president, sales and marketing, at Meet Detroit.  “It has made meeting planners a little bit more cautious in blocking rooms.”

Our survey found that 14 percent of planners paid attrition fees for either their 2012 or 2013 conventions. 

Meeting Space Charges

Attrition is not the only area where planners have been paying fees. In 2011 and 2012, 32 percent of meeting organizers were charged for the use of meeting space at hotels within their official, contracted block.

Typically, especially during the recession, hotels would offer free meeting space rental, particularly when the group met a certain F&B minimum, explains Mark Dallman, regional vice president of sales, HPN Global, a site selection and contract negotiation company. But in recent years, as illustrated by the survey, more hotels have been charging for meeting space on top of F&B minimums as demand has increased.

About one in four planners are uncertain about whether or not hotels will charge for meeting space rental in 2013 and 2014, our survey found. Some 60 percent reported they are not paying for meeting space this year or next, while 17 percent are paying rental fees. (See tables 3 and 4.)

Room Rates on the Rise

Hotel industry experts predicted room rates would rise about 4 percent in 2013, but what planners are seeing is a mixed bag when it comes to changes in rates and overall hotel costs. Just over one-third of respondents said room rates/hotel costs went up less than 5 percent in 2013 compared to 2012, while 23 percent said they went up 6–10 percent. About 7 percent said rates went up 11–20 percent, while a (rather unfortunate!) 1 percent experienced an increase of 21–30 percent.

Further, 23 percent have seen no change in hotel rates in 2013 while 12 percent said room rates actually decreased this year. (See table 5.)

Hotel Preferences 

When it comes to choosing hotels for the official room block, meeting organizers say room rate/overall cost is the most important factor. (See table 6 for how they weighted individual factors, from “not at all important” to “extremely important.”) About 71 percent listed rate/cost as extremely important and 26 percent called it important. 

Free meeting space is the next most critical factor on planners’ lists, with 63 percent calling it extremely important and 30 percent saying it’s important. Quality of room accommodations was third: 48 percent called it extremely important, while 49 percent said it is important.

The Impact of Free Internet

About 44 percent of planners cited free Internet access/Wi-Fi as extremely important to their site selection and 36 percent called it very important. This factor ranked higher on the wish list than food-and-beverage discounts, hotel chain/type, and proximity to the convention center.

In a separate question, we asked planners if the hotels in their blocks offered free in-room Internet access to attendees at their last convention. Nearly half (47 percent) of respondents said hotels did offer free in-room Internet, while 21 percent said hotels did not offer it, and 32 percent said some did and some didn’t.