In a discriminating seller's market in which hoteliers are turning away business, SMERF (social, military, educational, religious, and fraternal) groups — which are typically the most budget-conscious of all — are finding that a little flexibility goes a long way toward getting rooms at the right price.
“We still try to focus on tier-one cities or cities that have special interest to our group,” says Matthew Reekstin, vice president of finance and events at the Red Hat Society, a Fullerton, Calif. — based organization for women over 50. “But it's getting harder,” he says, as room rates have climbed 10 percent to 20 percent in the past year. “We are not going to pay the higher prices, because our members just won't pay them,” says Reekstin. “We just have to find a way for it to work.”
One solution is to go to second- or third-tier destinations, where rates are lower and there is availability. But that's not a viable option for the society, because the members won't go. Case in point: This year, huge numbers were expected for the annual meeting in New Orleans, but when it was moved to St. Louis after Hurricane Katrina, attendance dropped significantly.
So the group has decided to stay with first-tier cities, but to keep costs reasonable, it must be flexible. Hotels are much more amenable to giving discounts, Reekstin finds, if the meeting is during a value season or fills a gap in their schedule. The Red Hat Society has determined it will meet anytime between April and the end of June each year, depending on rates and availability in a given destination.
“Before, we could have booked any hotel in any city in peak season and gotten the rates that we were looking for and possibly more concessions,” he says. Now, many hotels simply walk away rather than negotiate lower rates. So Reekstin will move on to the next property until he finds one that can accommodate the group within its three-month window.
Through 2008, the annual meeting, which draws around 5,000 attendees, is booked at first-tier cities. While the 2008 location is being kept under wraps to surprise members, the 2007 event is in Chicago. In the recent past, meetings have been held in Orlando, Dallas, Nashville, Boston, and Anaheim.
RHS currently has a contract with one hotel company for multiple meetings over a period of three years, and it is looking to strike similar deals with other chains. Reekstin says it's critical for planners to know the group's buying power and leverage it: “You have to be a strong enough meeting for them to give [concessions] they wouldn't normally give.”
It's not just first-tier cities for which flexibility has its benefits. Ann Shepherd, event planner for the South Dakota chapter of Beta Sigma Phi, a Kansas City, Mo. — based sorority, says one hotel in the running to host its 2008 convention in Rapid City, S.D., will drop room rates 30 percent if the group will move its meeting from June to October. It's an offer that will certainly be considered.