While the world continues to embrace more digitized interactions at work, there is no replacement for face-to-face, in-person meetings for many communities. Location is a fundamental driver for in-person meeting success – and there are many factors to consider in the planning phase, including site selection for your event.
A recent report titled Business Travel Tracker illustrates that nearly 90% of business travelers plan to travel for work-related reasons this year. Even more staggering is the fact that 84% of those respondents expect their trips to be for a meeting, convention, or trade show – harkening to the fact that business events are back.
These statistics drum up excitement and fuel concerns about highly competitive site selection. With such high demand for hotel and venue space, here’s what to expect during hotel negotiations for the remainder of 2022.
Site sourcing and negotiations with hotels
In today’s tight market, hotels hold all the cards. For example, meetings contracts previously calculated room night obligations throughout an event. The cumulative approach allowed the planner to fulfill contract obligations, offsetting attrition fees even if the room block fell short on a peak night. “We’re seeing now a shift from a cumulative mindset to a daily one,” says Tifanie Haun, CMP, site selection manager with Meeting Expectations. “Hoteliers have changed how they set room-night obligations and how they negotiate contract clauses.” And, because event spaces are in great demand right now, expect a speedy timeline from RFP to contract.
But all hope is not lost. Even though hotels are stricter with attrition, planners can find other modes of compromise to make their clients and attendees happy. In some cases, market pressure drives more lenient terms. All it takes is one hotel granting leniency for a planner to shop and secure a better deal for their meeting competitively.
Additionally, hotels are interested in coming to the table to compromise some clauses, especially if there’s historical precedence showing pickup for your program.
Smaller events on the rise
Less flexibility on the attrition front means some groups are reconsidering their event size for more regional and intimate interactions. Small-scale events also deliver a smaller block of rooms – meaning associations and non-profit groups can better protect their bottom line to ensure room retention.
Greater collaboration and cooperation
Closer working relationships with hotels during the COVID pandemic yielded more collaborative moments. Now, the partnership effect continues today. Instead of providing the regular dates, budget, and references, there’s more group discussion, allowing hotels to function as partners and solution providers. “Now, as business fills the books, it’s more important that all parties understand the desired outcomes and needs of the meeting host,” adds Haun.
Creeping costs to consider
Room rates are on the rise, in addition to several other meetings factors:
At hotels, A/V service commissions have increased. It always pays to ask questions: we recently helped a client trim down their A/V costs by inquiring about the abilities of the venue hardware and successfully had that cost reduced.
Food & beverage
Supply chain challenges are not new, but they continue to affect F&B costs for meetings. With an average 30% markup, meat and poultry have significantly increased. Some groups are opting for more sustainable choices, like fish, which experienced a rise of less than 10%. Brewed coffee continues to carry a hefty price tag, and some planners order a small amount since you can always request more joe on the spot. (But watch out for those surprise coffee refills!) So, how can you offset your F&B costs? It might seem nitty-gritty, but knowing your exact numbers for F&B will help factor in budgets.
Understanding your group’s needs is key
Ultimately, changes to venue pricing models emphasize why it’s so critical to understand your group’s needs. Don’t fall into the trap of following the same patterns from pre-COVID times without paying attention to the actual number of necessary rooms. Rely on data from earlier events or whatever data you have available to contract accurately. Our site selection experts dutifully navigate all the details for your next meeting. Get in touch today.