Booking hotel rooms via third-party Internet sites, at better rates and outside a group's contracted room block, was—what a surprise—the hot topic at last week's Professional Convention Management Association convention in Anaheim. Many association meeting planners, who two to five years ago contracted large room blocks based on meeting history and a booming economy, are not getting credit for those rooms now that the meetings are taking place (even though most planners say registration is up). That can mean thousands of dollars paid in attrition fees to hotels.
The results of a PCMA housing survey, which were released during the meeting, found that more than 40 percent of the 650 respondents said they were most concerned about attrition penalties, while the issue of attendees booking outside the block was cited by 25 percent as their most significant problem.
Perhaps the best panel on the topic was facilitated by Mary Power, president and CEO of the Convention Industry Council, who insisted on focusing on short-term and long-term solutions. The planners on the panel and in the audience, however, wanted to know what they could be doing NOW to stop the outside-the-block hemorrhage.
Issue: Planners need to get credit for attendees who stay at the contracted hotel but did not book in block. Many hotels' computer systems still are on "legacy" platforms, and unable to do a merge/purge against master lists automatically. Therefore, either the hotel or the association must do a manual audit.
Solutions: Insist on an audit in your contract, and ask the hotel to do a merge and purge of its master guest list against your reg list; or ask for the list (some states' privacy laws prohibit hotels from giving them out) and do it yourself. If you didn't or can't contract for the hotel to do an audit in your initial contract, pay for an audit from the CVB, as one planner holding a meeting in Anaheim this week planned to do. Planners like the idea of hotels changing their 80 percent attrition standard to 70 percent or lower; and finalizing rates two months out rather than up to two years out.
Issue: Hotels have caused the problem by dumping rooms on Travelocity, Expedia, and other discount booking sites, but haven't controlled the pricing. Third-party housing companies, too, are scrambling to get make sure lower rates aren't posted elsewhere and watching those online travel agency sites very closely, insisting on compliance where necessary.
Solutions: Insist on a clause in your contract whereby lower rates can not be offered on the Web. Hotels say they are now doing a better controlling how and where they dump unsold rooms and are trying to drive users to their own sites, which are guaranteed to offer the lowest rate. Use your third-party housing vendor as your "compliance nazis," said Brian Roy, Convention Management Resources. After all, it's the vendor's commission at stake.
Issue: Many planners say they don't care if attendees stay outside the block, or what they're charged, as long as they get credit for and can track those rooms. Other planners care very much what the hotel charges and how the association shows its benefit to members through hotel room discounts.
Solutions: Encourage attendees to stay within the block through a variety of incentives. Or take privileges away from those who go outside the block.
Issue: Planners ARE lowering blocks for meetings from here on out. Therefore, their purchasing power for meeting space at both the convention center and hotel, as well as other concessions from the city and bureau, will be affected.
Solutions: Hotels are taking back control of inventory on their own sites so it’s easier to manage, and they’re insisting that planners need to educate attendees/members better about the benefits of staying within the block. For large meetings, Christine Shimasaki, CMP, executive vice president of sales and marketing, San Diego Convention and Visitors Bureau, has proposed a new Attendee Origin Audit, which is a formula based on registration, not peak room pick-up. Both Chicago and Orlando CVBs have also proposed Web-based booking engines for meeting and leisure visitors.
For more about the booking outside the block issue, read October AM's roundtable, click here.