Michael Dominguez, vice president,sales, Loews Hotels, knows something about canceled meetings. In February 2008, hotel industry research firm PKF Consulting projected a 3 percent increase in revenue per available guest room ( ) for 2008. The year closed with a 4.8 percent loss. That’s a pretty big swing, Dominguez says, and it is nothing compared to the 11.5 percent decline in RevPAR PKF now forecasts for the hotel industry for 2009. Much of the drop can be attributed to meeting room nights canceled, at meetings, and a slowdown for future meeting bookings.
Added to the worries in the hotel industry, says Dominguez, are the loans that will come due in or around 2011 from the spate of renovations that took place five to six years ago. By then, Dominguez says, he hopes the hotel industry will be out of a recession. “We will come out of it,” says Dominguez.
Dominguez joined corporate meeting pro Lori Wise, manager, events management, Home Depot, at Meeting Professionals International’s Meet Different conference held in February in Atlanta, in a session called “Retooling for a Transformed Marketplace,” to offer tips to planners.
“How can we partner now,?” asks Dominguez. What can a planner ask, or not ask, of a hotel?
The most significant thing a planner can do when contemplating whether or not to move forward with a meeting, or to mitigate attrition, is to get to the hotel 90 days before the meeting. “We have owners,” says Dominguez, “for whom we’ve done forecasts 30, 60, and 90 days out.”
If a planner can get to the hotel salesperson before his quarterly reports have gone to ownership, the planner will be more likely to renegotiate a room rate.
Here are other cost-saving tips Dominguez and Wise offered, many of which pertain to shaving labor costs, a hotel’s No. 1 cost:
- Avoid separate rooms for a reception and dinner.
- Outdoor labor is always more expensive, so avoid outdoor events
- Avoid turning rooms, that is, having to change the seating styles.
- Give the hotel very good information on your manifest about when groups are arriving and departing so it can properly man the bell desks and front desk. This pertains to the delivery of gifts in rooms, too.
- Avoid turndown service. Hotels have to add a second housekeeping staff to offer turndown service.
- Send more people to the restaurants, perhaps giving them meal vouchers instead of sending them to a banquet room, which requires additional banquet staff. “The restaurant staff is there anyway,” he says.
- To avoid attrition, increase your food and beverage spend, or upgrade VIP treatment, so that you are at least getting something for those dollars.
- Offer fewer options on a banquet menu. Poll people ahead of time about special meals or meal options.
“If you don’t ask, you don’t get,” says planner Wise of Home Depot. “Don’t abuse the situation. But if you are waffling on canceling, and the hotel really wants your business, they will come down on the room rate.” Wise says she was able to renegotiate the following for a recent meeting, saving the company hundreds of thousands of dollars: room rates, vendor rates, labor, food and beverage, transportation, concessions, management fees, and rebates.