Palm trees waved in the tropical air. Scores of surfers dotted the flat, blue Pacific expanse, resting on their boards for hours at a time, like hens awaiting their eggs. The slim crescent of Waikiki Beach curved up the island, ringed by glimmering high-rises. At the other end, the old brown face of Diamond Head jutted out into the flawless sky. Here in Honolulu, life really could be a beach.
But inside the Hawaii Convention Center, we could have been on another planet. Under the fluorescent glare, in a windowless, chilled room, our talk ranged from terrorist attacks andpenalties to security lapses and black-outs. We were gathered for the fourth annual roundtable, held this summer during the American Society of Association Executive's annual convention. The topic was risk management, specifically security and attrition concerns.
The collective industry experience of the 13 people gathered around the table totaled something like 150 years. Our discussion ranged far and wide, and like all great conversations, included drop-kick analysis, the occasional diatribe, jokes, interesting new ideas, lots of sidetracks, and practically no consensus. When it ended 90 minutes later, we did agree that the industry that is emerging from the shadow of 9/11 and a three-year economic slump calls for a new level of contingency and attrition planning.
Security: Big Lapses?
In a year marked by war, SARS, terrorist attacks in Bali and Jakarta, and the Big Blackout of 2003, security and safety issues have jumped to the top of the list of concerns for planners, or so one would think. But Joan Eisenstodt, a frequent industry speaker and presenter, and moderator of the popular MIMlist, kicked off the discussion by saying that the heightened awareness resulting from 9/11 had all but faded away.
“I am still getting the same response from hoteliers when I ask about emergency plans. ‘We can't show them to you.’ Well, show me some evidence that you have one! Planners are still not getting emergency contact information. I am simply not seeing what we need to see in ourand proposals and on site inspections. It's probably going to take another major event before our industry wakes up.”
Susan Sarfati, president/CEO the Greater Washington Society of Association Executives, concurred, adding that since 9/11 “a lot of associations have a fear of the future. Many feel very vulnerable. They were quick to downsize — dropping any program or service that wasn't yielding net revenue. Some have been very short-sighted.”
Richard Green, executive director, association sales, Marriott Hotels and Resorts, pointed out that there have been changes at many hotels, albeit subtle ones, such as limiting multiple entry points, adding security personnel and video cameras, and requiring visible photo IDs for staff. Industry lawyer Jonathan Howe joined in: “Companies are hiring their own security advisors and devising crisis management plans,” he said. “They are painfully aware of security because it's a big budget item.”
Bruce Harris, president of Conferon Global Services, the country's largest event services company, contended that the cost of putting on “all the armor of protection” is not only very steep but may scare attendees so much they may not attend the event. “No matter how much we try to prepare for a terrorist attack, the reality is that we do it so that we feel better not because it can really prevent those kinds of attacks,” he said.
Eisenstodt clarified that the industry fails even in the most basic aspects of safety and security management. “How many of you have ever attended a meeting session that started out with someone telling you where the emergency exits are?” (See sidebar, page 27.)
Howe brought up an interesting point: possible liability of planners who don't do an adequate job of preparing for possible emergency situations. “The standard of care is changing tremendously. It used to be if someone hijacked a plan, the pilot's duty was to get the passengers down safely. Now it is to stop the hijacker at all costs. … I think if a planner didn't take adequate steps to check out security, meeting with security personnel, site inspections, there could be culpability in the event of disaster.”
Attrition Gets Trickier
The issue of how to manage risk attrition caused by people booking outside the negotiated block has been a topic of intense debate in the past year and a half. AM broke ground on the subject in its 2002 roundtable and subsequent cover story (“Busting Up the Block,” October 2002). We kicked off the discussion this year by noting that 800 of the 2,400 attendees at the annual meeting this summer of Meeting Professionals International reportedly booked outside the negotiated block. Clearly, the problem is far from solved.
Jonathan Howe chimed in that before leaving for the ASAE meeting we were all attending, he had found on Expedia rooms available at one of the convention hotels in ASAE's block for $80 less than the rate ASAE had negotiated. This sparked a lively, self-propelled conversation on ways to deal with the issue.
The group more or less agreed that the phenomenon of new distribution channels for the sale of hotel rooms (i.e., via the Internet) is here to stay. “I think the fundamental change that is coming down the pike is the way we sell to association attendees,” asserted Hilton's Larry Luteran, vice president of industry relations. “We have to make attendees accountable for the entire convention experience and not allow them to cherry-pick their hotel rooms. They are coming for the education, the networking.”
By “we” Luteran clarified that he meant associations and hotels. “Both have to be committed to the way we sell to the attendee, or it's a disaster. I am convinced that if the right people on both sides got involved at the right time, 90 percent of this problem would be solved.”
Starwood's Christi Hicks, vice president of global sales, had a different take. “We have to have a situation where we package, I agree with Larry there, but we sell the “product” in some way that gets the association what they want and the hotels what they need. … Three to four years from now, if we are smart on our side of the fence, we will establish a value for meeting space and sell that meeting space accordingly.”
Several of the planners nodded their heads at this, and Betsy Hilt, CAE, executive director of the Tennessee Bar Association, said she would rather buy meeting space that way. “At least I know how to budget that way,” she said. “With attrition thrown at me, I'm sunk. I've lost all the revenue from the meeting.”
But Hicks' suggestion didn't sit well at all with Bruce Harris. “Who is going to call a hotel and say for 2006 I want all your meeting space and I am not giving you guest rooms?” Hicks said that's not what she meant. “Meeting space has a value. We have to figure out what is appropriate for protection and then figure how how to sell the rest. There is a way to free sell rooms up to the day of arrival in different ways. It's about education and all that good stuff.”
As Debra Rosencrance, CMP, vice president of meetings and exhibits for the American Academy of Ophthalmology, explained, the issue of space rental fees is complicated. “We have 20,000 people at our meeting, we use 10,000 room nights, and we take all the public meeting space. But that space is for our related groups, not for us. Part of ouris that these groups don't have to pay space rental fees. So in order for the hotel to pay for it, the room rates get jacked up for attendees. … I think for hotels to charge separately for meeting space would work.”
Harris at that point went on the offensive: “We have a lot of attendees out there who don't know, because we haven't told them, that since the beginning of time room rentals have been in their guest room rate. The reason people are leaving the block is value and value is dollars. We need to create an equal value for staying in the block as outside, and people will stay in the block.” (See sidebar, page 24.)
Eisenstodt countered that incentives like a reduced registration rate don't work. “For one thing, people are waiting very late to register, thanks mostly to the economy,” she said. Rosencrance added: “We would have a problem with this incentive too, since we don't charge a registration fee.”
Studying the Problem
“Isn't the Convention Industry Council studying this problem?” asked Sarfati. Part of CIC's Project Attrition is to compile data on why people are booking outside the block, noted Richard Green. “Isn't it obvious that price is the reason?” asked Sarfati. “You need good data to make good decisions,” Green replied. [See www.conventionindustry.org for details on Project Attrition.]
Harris said Conferon had interviewed thousands of attendees. “Price is by far and away the issue, most of the rest stay outside of the block for hotel points, or because of corporate contracts. We are researching what we already know.”
Christine Shimasaki, CMP, executive vice president sales and marketing, San Diego CVB, objected. “We actually have very little data about behaviors of attendees as an aggregate. You might know how your physician group or your engineers react, but that is actually quite isolated. … We've got to get beyond thinking about hotel rooms as a commodity because attendees are going to feel that when it comes to education, when it comes to the entire meeting experience.”
Jon Howe pointed to a trend that he's observed: Some citywide conventions are negotiating hotel rates but not giving guarantees on pickup. “In the airline pricing model for groups, the planner goes in and negotiates a discount but doesn't guarantee seats picked up.” Conferon's Harris responded: “Wait two or three years from now when corporate business picks up. Associations are going to lose operating revenue because attendees aren't going to want to stay at some hotel that is a long cab ride from the meeting. Associations are having enough financial trouble as it is.” The tactic of downsizing room blocks isn't going to work for the same reason, Harris said.
The conversation turned to the corporate market. “The corporate curve is starting to come back, but I don't think we are going to see corporate travel come back to the levels it had by the end of the 1990s,” said Starwood's Hicks. “I think we have all found that we can do things differently.” Hilton's Larry Luteran said that, to a much greater degree, travel decisions are being made at the procurement level. “Corporations are leveraging their total spend more than ever,” he said. He sees many more combined transient travel/group travel departments coming down the pike.
Nancy Elder, CAE, director of meetings and industry relations, American Society for Microbiology, said corporations aren't the only ones leveraging their spend. “We've gotten very proactive about collaborating more with our smaller, affiliated associations. There is a benefit to us in volume to go to them and say, ‘Let's work together.’”
Sarfati added that travel cutbacks have as much to do with “time poverty” as with the economy. Meetings have to be “compelling” to get people to come. “And if there is a cheaper price, people will take it because loyalty has gone out the window.”
Who's Who: 2003 Roundtable Participants
Joan L. Eisenstodt, Eisenstodt Associates, LLC, Washington, D.C.
Nancy Elders, CAE, director of meetings and industry relations, American Society of Microbiology, Washington, D.C.
Richard B. Green, vice president of association sales, Marriott International Inc., Washington, D.C.
Bruce Harris, president, Conferon Global Services Inc., Twinsburg, Ohio
Christi Hicks, senior vice president of global sales, North America, Starwood Hotels & Resorts, White Plains, N.Y.
Jonathan T. Howe, Howe & Hutton, Ltd., Chicago
Mary Hoyle, CMP, national sales manager, Washington D.C., San Jose Convention & Visitors Bureau
Betsy Hilt, CAE, executive director, Tennessee Society of Association Executives, Nashville, Tenn.
Regina McGee, editor, Association Meetings, Stow, Mass.
Larry Luteran, vice president, industry relations, Hilton Hotels Corp., Washington D.C.
Debra Rosencrance, CMP, vice president of meetings and exhibits, American Society of Ophthalmology, San Francisco
Susan Sarfati, president/CEO, Greater Washington Society of Association Executives, Washington, D.C.
Christine Shimasaki, vice president sales and marketing, San Diego CVB
Sounding the Alarm
If there is one thing meeting consultant and independent planner Joan Eisenstodt feels strongly about, it's the issue of safety and security at meetings. While risk factors like SARS and terrorist attacks may get a lot of attention, “security and safety issues span the gamut from fire to theft to personal injuries and allergic reactions and alcohol abuse,”she says. We asked her for some tips on how planners can best be prepared to handle all types of emergencies.
When should a meeting professional prepare?
Preparation begins with site and vendor selection and program planning. Know your audience and under what circumstances one might put them in certain venues.
Thoroughly inspect a site for all risk management contingencies. Get answers to these questions:
What is the site's emergency plan? Who on staff, on all shifts, is trained to manage an emergency? With what has the site dealt in the past? How have they handled all of the above and more? Where are the closest emergency response services? What incidents that might affect security and safety, and general well-being of guests/customers have happened in and around the site? What backups for power and water does the site have? How recently has it been tested and what portion of the site will be able to operate if there is a blackout or other emergency?
Meet with the director of security and all those on the staff who have been trained in CPR, to use AEDs [automated external defibrillators], and in other emergency procedures.
Why should the plan be written?
Many meeting professionals say “I don't need a written plan; we've never had a problem.” Or “Why write it down? I know what to do.”
All emergency information for the site and the destination should be in written form because it's just a concept until it's written down. All on-site staff (CEO/executive director and temp staff included) should be familiar with all the aspects of the emergency plan so that they, too, will know how to respond. Involve the director of marketing or PR or others who will be responsible for communicating the message to the press and public. Ensure staff in the home office is aware of the plan and what their response should be to those who call.
What else should I have on site?
All financial and other organizational information
Emergency contact information for each participant and staff person, with a copy in the office
Call-down list for how to reach each person in your organizations emergency response team
What Do YOU Think?
Would it be a good idea for meeting room rental rates to be separated out rather than factored into the hotel room charge? Have you found that offering attendees and exhibitors incentives to book within the negotiated room block has been effective? Are planners doing enough to manage security risks at meetings? Are hotels?