If you’re looking down the barrel of a big cancellation penalty, a new online service could help save your budget. MeetingTrader, a clearinghouse for canceled meeting space, expects to come out of its beta-test phase in the first quarter of 2010, but meeting professionals are already making use of the service to help resell their meeting contracts and mitigate their cancellation fees.
CEO Tim Brooks, former president of The Austin Group meetings consultancy, launched the site on September 1, and in the first 12 weeks has resold portions of 16 canceled meetings. “Think of us a bit like eBay or Match.com,” Brooks says. “We’re creating a marketplace where a buyer and new prospective seller can find each other.”
“We looked at the real estate sublease market and asked, ‘Why doesn’t that work in the hotel business?’ The reason is because office space is really easy to determine the value of; it’s price per square foot. But with hotel contracts, no two are alike,” Brooks says. To make a meeting contract more of a commodity, the MeetingTrader system takes into account all the contractually stipulated spending—on guest rooms, food and beverage, meetings rooms, audiovisual, etc.—and puts a discounted value on the contract. That value changes depending on the amount of time between the cancellation and the event. The system allows a new group that doesn’t want to buy the whole cancellation to, instead, just buy a part of it.
Using MeetingTrader, hotels avoid having to resort to tremendous discounting to resell cancellations, says Brooks. “It also mitigates some of the cancellation damages suffered by the canceling party, and it provides the new planner with a great deal because part of it is subsidized by the canceling party.”
In addition to canceled meeting space, organizations can also use the platform to sell hotel credits they don’t plan to use. MeetingTrader also offers an enterprise-level version of the product, allowing customization, multiple users, and deeper reporting functionalities.
Meeting professionals and hotels can post canceled meetings or hotel credits on the site for free until the site comes out of beta in the first quarter of 2010, says Steve Schmidt, vice president, business development. After that, postings will cost $1,950. In addition, the canceling party pays a transaction fee equal to 6 percent of the “replacement revenue.” (Five percent goes to MeetingTrader and 1 percent goes to the hotel.)
While selling cancelled meeting space is the distinctive MeetingTrader service, its developers have also built out separate budget management and request for proposal tools, based on the meeting valuation process underlying the system.