“Any time that pendulum starts shifting [from buyer's to seller's market], it takes a little while for everybody to figure the market out,” says Anetha Grant, senior vice president of sales at the Nashville Convention and Visitors Bureau. Educational groups, which are part of the budget-conscious SMERF (social, military, educational, religious, and fraternal) market, are figuring out that shifting their lead times is one solution to navigating this pricey and tight market. But the approaches differ, depending on the size of the group and the location of the meeting.
Some planners say good deals are right around the corner — you just have to find them — so they are shortening their lead times. Others believe the better bargain is further down the road and they are extending their booking cycle.
“Some people don't think this is going to last,” says Diane Saxe, director of meetings at the American Mathematical Society, Providence, R.I., referring to the seller's market. “They say that this is going to be over in a couple of years.” That theory may well prove to be true, but Saxe and the executives at her association aren't about to test it by waiting to see which way the market goes.
“We really need to make sure we have space, based upon the rates that we have this year,” says Saxe. “So, I need to have a hold on some meeting space, or 10 years from now there's not going to be anything or it's going to be extremely expensive.” Trying to find space for the early January meeting in a shorter cycle is either too expensive or impossible, as many of the first-tier destinations she books — San Diego; Washington, D.C.; San Antonio; and Atlanta — are filled. “The hotels feel that they do not have to negotiate and give you the perks and the rates that they have in the past.”
So, earlier this year, AMS's executive committee, which Saxe sits on, decided to make it policy that the annual meeting must be booked between seven and 10 years out to take the short-term market fluctuations out of the picture. “Because of that, I have a handle on getting some good rates.” Currently, AMS's annual meetings, which attract about 5,000 people, are booked through 2015.
In talking to her counterparts, she finds that most of the larger educational associations are broadening their lead times for the same reasons. The National Science Teachers Association, Arlington, Va., is one of them.
Convention Coordinator Donna Fletcher, who plans NSTA's annual Eastern Area Conference, has pushed her booking cycle to seven to 10 years from six to seven years. As the market has grown tighter, she says, it has become more difficult to find housing and meeting space for the 4,500-attendee conference in a shorter cycle.
However, Fletcher finds that by sticking to the second-tier cities of Baltimore (the site of this year's conference), Nashville, and Detroit, she can find good rates and dates on a long-term cycle. Right now, the conference is booked through 2015. “It's still more of a buyer's market in the places we look [as opposed to larger destinations],” says Fletcher.
“These are teachers, not doctors or lawyers or people higher up on the pay scale, so we try to be conscious of that by offering reasonable rates,” she says. “We've gone to places where the rates are as low as $59 and as high as $219 per night,” says Fletcher.
However, while reasonable rates are critical, getting good attendance is about a variety of factors, including the speakers, the program, and the destination. “The city definitely has a large impact,” Fletcher says. “What is there to do in the city? How accessible is it by air? What are the attractions?”
It's also very important to be in a city that has educational resources — museums, guest speakers, universities — for off-site functions and activities, says Fletcher. The site of last year's conference, Nashville, had rooms at a good rate — around $100 per night — and educational resources that the group was able to tap into.
Educational meetings, along with medical and religious, are among Nashville's top three markets, says Grant. “With 17 colleges and universities here, there's just a wealth of speakers, and, for us, a wealth of support, because so many of these professors and chancellors sit on boards of organizations,” she says. Over the next few months, the National Middle School Association, the National Association of Campus Activities, and Mothers of Preschoolers International are coming to the city. “We still have not priced ourselves out of the education market.”
But many other large cities are too expensive, forcing SMERF groups to expand their horizons.
Independent meeting planner Sue Walton, who works for a couple of different associations in the educational market, says the current environment is tougher than any she has seen in her 19 years in the business.
“The market is stiff for SMERFs because the hotels are looking at their bottom lines and because we're not as profitable as corporate or incentive business where there's a lot of food and beverage. They don't want us,” says Walton, particularly the larger destinations. And because her meetings — which attract around 500 attendees — are on the small end of the educational spectrum, it's difficult to get into even some second-tier destinations because the groups are very cost-conscious and want room rates under $125 per night.
But instead of increasing her cycle she has shortened it from 18 to 24 months out to one year or less. Why? Because by broadening her search and being flexible on dates, she has found that smaller, up-and-coming destinations are hungry for business — particularly when it fills an opening in their schedule.
“I'm looking at markets I've never been to before, markets that have been off the radar to me,” says Walton, president, S.W. Walton Associates, Evanston, Ill. “So, instead of Kansas City or St. Louis, I'm looking at Springfield, Mo.,” she says.
Springfield, where she recently made a site visit, is eager to accommodate her meetings. Providence, R.I.; Springfield, Mass.; Sacramento, Calif.; and Spokane, Wash. — other smaller destinations that have recently ramped up their meetings infrastructure — have also expressed interest. “These markets are out there,” she says, and they have the dates and rates that she requires.
But even these smaller markets are getting busier, so it helps to be flexible. She recently approached a property in Rochester, N.Y., for a fall meeting and couldn't find the space. But when she suggested May of the following year, space opened up. “You have to be patient and you have to look at places you haven't thought of,” she says. Clients, she adds, have been willing to wait it out and “roll with the punches.”
One hurdle with the smaller markets is site visits. Some smaller bureaus don't have the budget to pay for meeting planner site visits. If that's the case — and the association doesn't have the budget to foot the bill — then Walton may look elsewhere.
It's harder for a larger group, like AMS, to fit into the smaller markets like a Springfield or Rochester, but that doesn't mean that Saxe isn't broadening her search, too. Saxe is on the lookout for lower-priced destinations, but options are limited because the January meeting has to be in a warm-weather city. One new destination on her radar screen is Tampa, Fla.
“There are only a few places that we can go, so one of the things I'm doing is I am looking at some alternative locations to see if they can hold us.”
Availability and affordability: In this competitive market, that's the long and the short of it.