Site selection is tremendously important to the success of an association meeting. Who better than hotels and destination marketing organizations to give us an overall view of the trends? We tapped into their collective wisdom to ask about the current state of— and to get some practical advice for planners who don't know what a destination will look like when they book meetings two, five, even 10 years out.
VICE PRESIDENT MEETING SALES & OPERATIONS
LAS VEGAS MEETINGS BY HARRAHS ENTERTAINMENT
PRESIDENT AND CEO
ORLANDO/ORANGE COUNTY CONVENTION AND VISITORS BUREAU INC.
FAIRMONT HOTELS & RESORTS
STEPHEN D. POWELL
SENIOR VICE PRESIDENT
INTERCONTINENTAL HOTELS GROUP
HYATT HOTELS & RESORTS
SENIOR VICE PRESIDENT
STARWOOD HOTELS AND RESORTS
PRESIDENT AND CEO
GREATER BOSTON CONVENTION & VISITORS BUREAU
DIRECTOR, SALES AND MARKETING
VIRGINIA BEACH CONVENTION & VISITORS BUREAU
ASSOCIATION MEETINGS: What is the current state of association meetings? What should their focus be going forward?
MIKE MASSARI: I've been in Las Vegas 12 years and perception has always been an issue among meeting professionals. Sometimes it helps, sometimes it hurts. It's very different when you're told to attend a meeting as opposed to being asked to attend. The draw of the destination has always helped associations' annual meetings. I don't know if association meetings could be called healthy, but they've remained more stable than corporate meetings in this market. From a customer perspective, they are a reflection on how we all are spending our time and money. Employers say, “You belong to these four associations, so which of those four do I continue to support? Which event gives the best value and the best?” Content, learning, and networking is what drives that attendance.
GARY SAIN: Meetings, conventions, and trade shows will continue to be vital revenue-generators for associations. However, the cost-costing measures taken in late 2008 and 2009 will continue for the foreseeable future. Increased competition among destinations and venues will offer greater choice and pricing options to the customer. The cost of doing business will increase for the destination or venue and the association will need to emphasize ancillary revenue opportunities to counter the cost-conscious attitude of attendees who want to pay less. Technology will not take the place of larger meetings; however, technology will be blended into the face-to-face encounter to extend the meeting's life well after the meeting ends. I think one of the more challenging topics will be how to attract the X and Y generations. How meetings are positioned to these specific demographics will be critical for association meetings in the future.
I actually believe association meetings will become more relevant and meaningful in the future, especially if association management can customize and personalize the face-to-face experience to make it more relevant to the end user. If association members feel a meeting will provide them with meaningful insight that they can't receive anywhere else, that will be the driver for them to attend. But, the meeting needs to be more personalized to the end user. Broad-based content will not be as motivating. Any opportunity to bring qualified buyers and sellers together will have high appeal.
TOM STOREY: Planners are more confident about taking a wait-and-see attitude because there is availability. They feel they can still look around and maybe get a better rate. But as demand comes back, lead times will lengthen because it won't be as easy to place a large meeting. Look at North America — there are not a lot of new hotels. Supply is relatively constrained, especially at the high end of the market. So demand doesn't have to come back too much to restrict choices.
Until we get to a certain demand level and a certain level of room-night volume, rates will stay low. In 2011, rates will increase because of two factors. First, an increase in corporate transient travel will reduce availability in hotels and, second, as meetings business picks up hotels will be more confident asking for higher rates.
Hotels will increasingly focus on the right mix of business — group versus transient — and which of these segments is most profitable. In 2009, hotels had to use rate to maintain appropriate volume levels. But with increased business coming from multiple segments, hotels will again begin to focus on the most profitable business.
STEVE POWELL: Association meetings have been in decline for the last three years even though 2007 was not recessionary. The declines are attributable to shorter stays and lower attendances. I believe that association education and industry programming need to be more relevant and nimble. Change is occurring at lightning speed, so for an association to be current and relevant, the challenge is formidable.
Association meetings/forums must be more than informing. The informing has to be constant through established association communication streams. The meeting must facilitate the discussion and actions that should be taken as a result of the information. This interaction should begin prior to the conference via current technology and continue through the meeting and into the post-meeting cycle.
JACK HORNE: Association meetings have remained relatively stable with new business results encouraging over the first four months of 2010. Long-term commitments continue to be delayed as associations are still concerned aboutand cancellation fees due to lower attendance. There seems to be a movement toward smaller, more regional meetings with a relatively short booking window.
Associations need more than ever to be responsive to their members and meeting attendees. There is a need to be more creative, while making sure meetings are ROI-driven and measurable. Being green is now generally assumed, but for certain segments such as government and education business, it's a requirement.
CHRISTIE HICKS: During the economic downturn, there has been a greater focus on creating value, mitigating risk, and waiting longer to confirm bookings for future years. Smaller, more regional meetings seem to be on the increase as well as more meetings taking place outside North America. That said, there continues to be caution around long-term commitments and focus on a strong value proposition.
Planners and hotels, working together, need to find innovative solutions to the constant ebb and flow of the market. It's the only way we will solve the big swings once and for all. A solution that shares risk and shares upside can serve as a catalyst that results in stronger partnerships. Both parties need to be open to new ideas and willing to trust each other.
PAT MOSCARITOLO: Business is definitely getting better as we've seen some record-setting attendance for Boston meetings. But the booking window continues to be closer in than ever before and there's a continued focus on trimming costs and doing more with less as associations are under intense financial pressures. The upside of this is CVBs become even more valuable business partners as they know how to drive value across their destinations for planners. They function as an extension of the association's staff.
Across the board, businesses have cut expenses, which has allowed them to show in the short term positive financial results. Now they have to grow revenues and sales. Associations through their annual meetings, trade shows, and initiatives can help grow sales and revenues for members. So I see the meetings business bouncing back strongly over the next 12 months.
Next Page: Advice for Future Bookings
Advice for Future Bookings
ASSOCIATION MEETINGS: In light of recent events, what are one or two suggestions for association meeting pros who are choosing a venue for their most important event of the year? How does a planner know two, five, even 10 years out what a city will look like when the meeting finally takes place? What can planners do to mitigate risk?
MASSARI: You need to have a high degree of confidence that people know how to execute. It's huge, your one annual meeting a year, the biggest revenue for your organization. The destination and hotels need to understand you and your needs. You also want to work with a company with staying power, a company that can withstand these types of storms.
SAIN: Destination selection needs to be based first on the objectives of the association meeting. Secondly, how will success be measured? Is this just ROI or is it more branding, reputation, membership retention, new ideas? Finally, I believe it's all about the total package of the destination, and I don't mean just price. Affordability, accessibility, infrastructure, ancillary services, entertainment options, destination appeal, safety, ease of travel … all are important attributes to consider.
In Orlando, the CVB plays a critical role on boards that are involved in economic development, future expansion, and infrastructure enhancements. When we can take a leadership role with the industry, community, and political boards/entities, we can better shape our future and be an asset to meeting professionals.
STOREY: Our strategy has always been to take a consultative approach. And that's our competitive advantage as well, because we have very experienced sales and convention services people. Planners, as much as they are focused on rate, are also on the spot to deliver the best experience for their clients. They need to deliver a program commensurate with the expectations of attendees.
POWELL: How do we know what a city will look like in several years? The question goes to both camps. The world is changing quickly with regard to new build, failed new build, mergers and acquisitions, bankruptcy, business segment dependencies, and so on. As a result of this recession, the travel industry, including meetings, is resetting itself. Our business is requiring greater flexibility on both sides. Hotel operators always get the request (sometimes demand) thatneed to be more open and flexible, particularly with attrition and cancellation clauses. I think association meeting managers need to be more flexible with their specifications and demands. I would like to think that flexibility begets flexibility. Perhaps association meeting managers could look at reserving the essentials for their events, with a “first right of refusal” on those parts of the that involve facilities that have the most significant chance of not realizing the deliverance of terms in the contract. We need to shift the paradigm where we book rooms for the peak night but hotels are unfulfilled because of shorter stays and early departures.
HORNE: In order to retain exhibitors and increase membership participation, it is still important to choose a city and destination that is appealing on all fronts. Packaging multiple meetings with a particular hotel chain can allow an association to maximize and leverage value and savings. Partner with the hotel communities and cities to offer virtual technology to communicate with members who couldn't attend the meeting in person.
Planners need to understand the local government, city, and state commitment to tourism. What's the long-term plan? Understand labor contracts if appropriate.
HICKS: An uncertain future is a reality as it relates to meetings. Understanding there will be risk in everything is important for both clients and suppliers. Willingness to take chances — commit to what is certain and take a chance that additional space will be open and possibly more expensive is one way to mitigate risk. Allowing hotels to move the dates of your meeting up to 12 months out is perhaps another way that could work for smaller events. Creating programs that are relevant is required to minimize risk. It has to be more about “missing this will leave a hole in my knowledge” than “where is the event and how much does it cost?”
MOSCARITOLO: Planners should look to CVBs as information lifelines. They have their fingers on the pulse of what's going on in their cities and are plugged into the short- and long-term development plans and issues. Set up a Google alert using key words for the city that is hosting your meeting and bookmark the major metropolitan newspaper on your favorites list to stay current.
AL HUTCHINSON: No doubt, planners have to re-evaluate their associations and determine what they are morphing into as a result of the economic times. From that evaluation, determine what type of event is best for members, perhaps partner with other associations, and determine what destination would work best. Planners should know the tenure of the bureau staff and its track record and maintain fluid communication with the destination to make sure they are aware of what changes are happening at their selected site.