When is a meeting cancellation penalty not a penalty? When it's a credit toward future meetings. Kelly Stratton, consulting manager, meeting services, at Nationwide Insurance Enterprise, turned a $95,000 cancellation payment to a resort into credits on the master bills of two subsequent Nationwide meetings at the property. For the company, the deal meant investing in meetings instead of throwing money away. For the hotel, it meant revenue of $175,000 instead of $95,000. For both, it meant the strengthening of a long-term business relationship instead of the deterioration of one.
Here's how it worked. After Nationwide Insurance consolidated meeting planning for its many subsidiaries and divisions into one department, based in Columbus, Ohio, Stratton found herself with a lot of meetings already on the books. And one dramatically off the books--to the tune of a $95,000 cancellation charge.
The subsidiary that had planned the 400-room-night meeting at Ocean Reef Club in Key Largo, Fla., Stratton explains, was sold right before the event was to take place. The division's final act was to send Ocean Reef a check for the full cancellation fee, but without telling anyone at Nationwide about it.
"I heard about it in the elevator," Stratton says. "So I called [the subsidiary], and got a copy of theand the cancellation letter. Then I called Ocean Reef, introduced myself, and asked if we could talk about it." The hotel's initial response was, "Sorry, done deal." Understandably so--the check had been in the bank for a month.
A second conversation was more fruitful. "I explained that Nationwide's meeting planning is consolidated now, that we do lots of meetings, and that maybe we could work this out to the benefit of both of us. [The subsidiary] had had a relationship with the hotel for 18 years."
Michelle Anseeuw, director of sales at Ocean Reef, agreed to hear her out, so Stratton booked a flight to Florida.
"After we'd received the check, Kelly came out of the woodwork," Anseeuw says. "She came down for a site inspection and said, 'Let's see what we can do about this.' "
Says Stratton: "I booked one big meeting on the spot. I said, 'I know we can't replace the revenue you lost in January, but for the year, you'll come out ahead.' "
Anseeuw listened. "My thought process was: She's well known, she handles a lot of meetings. She's not someone I didn't want to help out." One of the two new meetings Stratton booked was particularly attractive to Anseeuw: 252 room nights in June, the club's shoulder season. Stratton and Anseeuw worked out a way to apply the $95,000 to the two new meetings, taking into account the different room rates in the different seasons, and the revenue goals the property had to meet.
With the Ocean Reef deal, and a couple others like it, Stratton says, "We have recouped over a quarter of a million dollars that would have been down the drain. We've saved relationships that would have been tarnished. Plus I've got some happy campers that never would have been able to afford to go to Ocean Reef."
The bottom line, Stratton says, is not that companies should try to get out of everyand cancellation payment they're responsible for. Rather, hoteliers and planners should approach such negotiations with open minds. "Don't be afraid to throw out an idea, to go outside the box," she says. "Attrition is a lose-lose situation."
Anseeuw adds: "Had we stuck to our guns, we would have lost a relationship, and a June group. [Nationwide] has been a good client of ours for 18 years." She pauses. "But it wasn't an easy sell to the accountants."