Don't blame the attendees
They're just getting the best rate they can. Don't blame the hotels. They're just managing their inventory. Don't blame the meeting planners. They were promised great rates.
You can blame the Internet if you want, but the Internet is here to stay.
For groups that have attendees paying their own hotel bills, the problem is unfilled room blocks. Attendees are passing over a meeting planner's negotiated rate and, instead, booking the contracted hotel at a rock-bottom Internet rate using Expedia, Travelocity, Orbitz, Hotel.com, or any of the gaggle of discount travel sites.
“This has been a real pet peeve,” says Barbara Kielb, director of conference services for the Life Insurance Marketing Research Association International, Windsor, Conn. “Attendees don't understand that when wefor a meeting, a hotel sets aside meeting space for us and guarantees us the room rate. It's a challenge for us to explain that we wouldn't have the meeting space if we didn't guarantee the rooms.”
“When Internet booking started,” remembers Christie Hicks, senior vice president, global sales, North America for Starwood Hotels and Resorts, “there was fairly good data that showed that the customers they [online discount hotel sites] were bringing to the table were, in fact, different than our traditional customers.” But that was back in the 1990s when online travel booking was still gathering steam. Since then, it “has taken on a life of its own,” Hicks says. “I don't think we as an industry on either the planner side or the hotel side understood what that impact was ultimately going to be.”
James Wolfe, director of administrative services for NCCI Holdings Inc., a workers compensation insurance provider in Boca Raton, Fla., has seen an impact with outside-the-block bookings of 20 percent for his most recent annual meeting. And independent meeting planner Michelle Santee Tupps, president of Event Resource Inc. in Safety Harbor, Fla., has seen the problem skyrocket, “from zero to 5 percent four years ago — now one recent group may have been as high as 30 percent.” And the market isn't helping she says. “It's been an issue for a while but it has become quite a bit worse since the downturn in the economy because they [the hotels] are dumping rooms at a much faster pace.” And, notes Kielb, “With budgets being cut, everyone is looking for every single way to save a penny.”
Indeed, stories of 20 and 30 percent of a group finding better rates online for the headquarter hotel are no longer unusual. Susan Titus, Independent Insurance Agents of Oklahoma, Oklahoma City, sees the writing on the Internet wall and plans to add a new clause in her hotel contract starting with her 2003 annual meeting. “We haven't had a problem yet,” says the vice president of member and industry relations, “but hearing the horror stories and knowing my own personal experience — I check online for the best deals when I travel — we decided to add a clause to protect ourselves.” Her clause in a nutshell: “regardless of the rate paid, how they booked it, or when they booked it, we will get credit for the room,” says Titus.
Renaissance Oklahoma City was the first property Titus presented with the new contract when she booked her group's three-day annual conference for about 400 people. “They had no qualms at all. They didn't hesitate,” says Titus.
“I don't think I would book a hotel that wouldn't accept our new contract clause. The trend now is that there are so many more last-minute registrations, and people are so Internet-savvy. For our group, who pay their own way, they want to get the best bang for their buck, so if they can get a room for $30 or $40 less, then they're going to do that.”
Wolfe's meetingaddress the problem from a different angle, stating that there will be no lower rate available over NCCI's meeting dates — including Internet rates. And keeping an eye on the discount Web sites is now a standard part of planning meetings. “I just consider it due diligence,” Wolfe says.
The Cross-Checking Headache
Meeting planners we spoke to have been successful in getting protective clauses into their contracts, and hotel representatives seem cognizant of the difficult position planners are in — but it's a tenuous peace. Beside planners feeling as if they have to police the hotel booking sites, the cross-checking between the hotel rooming list and the meeting registration list is tedious at best. “It's a completely manual intervention,” says Wolfe, noting that “most quality properties are going to work to resolve these issues rather than just send you a bill for.”
“Before the meeting, I send a list of registered delegates and have the hotel cross-check,” says LIMRA International's Kielb. “Invariably we pick up 10, 20, 30 people who have booked outside the block.” With a two- or three-night stay, she says, identifying those attendees can be the difference between owing attrition fees and filling your block.
“It's a time-consuming process, but it's the right thing to do,” says Ty Helms, vice president of sales, Hyatt Hotels and Resorts, regarding the cross-checking. “You have to have a reservation manager or sales manager take time away from what they're supposed to be doing to match up lists to try to track down all the individuals. At a hotel like the Hyatt Chicago with 2,000 rooms, it can take some time.”
Hicks seconds that view. “Today it is an extraordinarily cumbersome process. It makes the planners crazy, and it makes the hotels crazy, and it's not a good use of time,” she says. “There are huge technology changes that need to be made in all systems that can look at channels as one code — how did the reservation come in — and rate as another code, so you can identify the person regardless of how they made the reservation and the rate paid. If we could get the technology in place, hotel contracts could look completely different in two years than they do today. Maybe the premium at that point isn't the rooms, maybe the premium becomes the meeting space.”
While hotels, at least on a case by case basis, are doing their part by giving planners credit for rooms no matter the booking channel or rate, many hoteliers feel that planners need to take some responsibility as well. “It's a two-way street,” says Helms. “What if planners use the registration vehicle to tie in to the hotel block? In other words, there might be a higher registration fee for someone who didn't book through the preferred housing vehicle.”
Starwood is also brainstorming with clients about a more proactive approach. “Instead of this hurting us, let us educate attendees as to all the reasons they want to be in the headquarters hotel, and what happens if they don't,” proposes Starwood's Christie Hicks.
Santee Tupps has tried packaging core guest-room-nights into the conference fee, but she says it's more complicated than it sounds. “People book, then they change their flight. Every change then has to go through the planning organization, because the group is paying for those rooms on the master bill.” And if you want changes to go through the hotel, “it gets a little hairy. … The hotel doesn't know what sub-block we were going to put that person in. If we're paying for it on the master, I don't want to give the attendee the right to make changes. They could upgrade themselves.”
Steven Hacker, CAE, president and CEO, International Association for Exposition Management, has a different suggestion: Hotels in the room block should offer an incentive for attendees to book those rooms at the negotiated group rate — maybe a complimentary spa treatment, a bottle of wine, fruit in the room. When a hotel offers discounted Internet rates and at the same time holds an event planner's feet to the fire on attrition clauses, that's a double-bind too great to bear, says Hacker. “At some point I, as an event planner, am going to have to get out of the crossfire and say to my attendees, ‘Here's a list of hotels in the area. Book your own rooms and rates.’”
For Santee Tupps, the bottom line is an understanding that you're starting out with the fairest rate possible. “If meeting planners are able to stand strong and say, ‘We understand where you're coming from; We know thatis the bottom line. That initial rate has to be very fair because I'm going to make you give me credit for the people who are at the hotel because of my meeting.’ If we demand that, we won't see so much disparity between the rates.”
Air Booking: The Other Internet Headache
For the majority of insurance conference planners, online discount hotel booking is not an issue since attendees' hotel stays are logged to the master account. And guests who pay their own way for pre- or post-meeting stays are often discouraged from hunting down deals when they find out it typically means having to change or downgrade their room. But company-paid trips are not immune to Internet trouble. For some, it's the online airline booking sites that present a challenge.
“It's a huge problem,” says Sharon Chapman, CMP, meeting planner at Berkshire Life Insurance Co. in Pittsfield, Mass., who contracts zone fares with the airlines and runs up against numerous road blocks trying to satisfy her volume agreements. “Some of the Internet fares are much lower than our zone fares,” she says, noting that while qualifiers' airfares are covered by the company, spouses' are not, so attendees shop online to find good rates. “They don't want to use our travel agency, and then they want us to reimburse them, which we can't do” says Chapman.
On top of that, zone fare fares can be restrictive, making qualifiers unhappy when they can't upgrade or use their frequent-flyer miles. The situation puts Chapman in a bind over her contractual obligations and creates work for the department processing reimbursement checks for travelers who manage to get their round-the-agent maneuvers approved.
Orbitz for Meetings
WHILE discount online travel sites are wreaking havoc on meetings whose attendees are shopping for deals rather than booking the negotiated block or preferred carriers, at least one of these sites is hoping to be part of a solution. Orbitz launched a corporate travel management technology — and a meeting-focused product may not be far behind.
Orbitz, the discount travel Web site formed in June 2001 by five major airlines — American, Continental, Delta, Northwest, and United — began offering Orbitz for Business on September 1, according to David Cerino, general manager of corporate travel. Orbitz for Business allows corporations to integrate negotiated rates and preferred carriers and hotels into the Orbitz online display and generate booking reports. “Initially, we're going to be doing corporate travel. That's really our entrée,” says Cerino. “We're really only a month into it. I've got a firm list of future requirements and, obviously, meetings and group planning is on it.”
But even as is, the new tracking and reporting function, called TripTracker, has applications in the meeting arena, says Cerino. The system is based on having the e-mail address of everyone in an organization. When an attendee does a search for a particular city over the meeting dates, the Orbitz system is designed to recognize his or her e-mail address and float the blocked rooms or negotiated fares to the top of the page. “And I can customize the top of the screen to be the [organization's] name,” says Cerino. Importantly, attendees' choices outside the blocked space are also tracked.
The nascent system raises many a question for meeting planners: How would it integrate with a housing provider? What would hotel contracts and room blocks look like? What privacy concerns would arise by sharing e-mail addresses? Cerino says interested planners are knocking at the door, but he is also quick to note that the new business-travel management system is not necessarily Orbitz's long-term meeting solution. “I think our long-term solution is to build a significant amount of functionality, which is something we want to do in the future.” TripTracker, he says, “is an option you've got if you want to take it. Are we all the way there? No. Can I give you daily reports? No. There are things that I won't be able to give you initially. But we'll get there.”
Orbitz ticket transaction costs are competitive at $5 per ticket for online corporate bookings, and about $15 for telephone-assisted bookings. For a fee (based on volume), the TripTracker is available to organizations that do not want to designate Orbitz as their travel agency.
Online travel booking site Expedia, which purchased Bellevue, Wash.-based Metropolitan Travel as a step into the corporate travel market, says it will launch a corporate travel technology by year's-end, but it is not considering a meetings product at this time.
Get It in the Contract
TYRA HILLIARD, JD, CMP, assistant professor, meeting and event management at The George Washington University in Washington, D.C., suggests the following contract wording to help guarantee your group credit for all attendees at the meeting hotel:
“Hotel will use its best efforts to code all Group attendee reservations to the Group block and will ask all persons making reservations to identify whether or not they are with a group prior to finalizing the reservation. Group will encourage attendees to mention the Group name and/or Group reservation code when making reservations.
“If Group reasonably believes that all Group attendees have not been coded to the Group room block for purposes of calculating pick-up, an audit will be conducted to compare Group's attendee list with a list of hotel guests in-house over the meeting dates. Representatives from Hotel and Group will conduct this audit together. Both Hotel and Group agree to protect the confidentiality of the other's proprietary information.
“All rooms occupied by Group attendees will be credited to the Group room block for pick-up purposes regardless of the sleeping room rate paid.”
(Optional Rate Clause): “Hotel will not offer sleeping room rates over the Group meeting dates that are lower than the negotiated Group rate unless the lower rate is available for all Group rooms.”