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Day 3: March 4, 2009
4 Mar, 2009 By: HWN Staff|
TODAY'S STORIES |
Recession hurts meeting revenue, properties bite back
By Timothy Coleman, Contributing Editor
Hotel, motel and resort operators know the trend all too well: The economy dips and meetings and conventions revenue begins to drop. But there is hope for the future, and to fully understand the opportunities, here’s a snapshot of the current realities.
Attendance at the recent International Consumer Electronics Show in Las Vegas—the largest tradeshow in the country—dipped 23 percent compared to last year’s showing. In Orlando, some properties already are cutting staff in anticipation of a 10 percent drop this year in conventions and meetings attendance. Both demonstrate the current softness.
While the recession is extensive, not all industries are affected equally. Most meeting activity has declined less than 10 percent over last year, though industries more impacted by the downturn, like housing and automotive, have experienced double-digit losses. Some sectors, notably medical, are stable or growing.
Recessions usually cut both ways in the corporate meeting segment. On the one hand, companies are cutting costs, so they often cancel all travel and meetings. On the other hand, some companies are restructuring, so they need to meet to reset strategies. That’s a bright spot that should not be missed.
Cutbacks also are happening in association and convention segments. There’s always been a “shoulder problem”—an image that describes what attendance during a four-day meeting looks like when plotted on a graph. The first and fourth days typically reveal lower attendance. The number climbs by the second day and peaks on the third.
To save money, people are ducking out earlier, leaving before the fourth day, so the “shoulders” formed by Day 2 and Day 4 attendance are sagging even worse than before.
So, what can be done? Here are some ideas:
• Segmentation: Continue to segment your meetings market down to the lowest levels. Remember that medical meetings are not behaving the same as automotive ones. Keep your sales staff focused on opportunities, not problems.
• Group patterns and wash: There is money to be made by properly managing inventory and keeping as much as possible open for sale. If your group block has a normal pattern and all of your early bookings are shorter, cut the shoulders more.
• Pricing: Resist making across-the-board pricing moves. Evaluate each group. Know their patterns. Be vigilant about pricing groups individually so you send a positive signal to your sales people or your meeting planners.
• Contracting: This is a particularly vexing area. Many meeting planners contracted last year for a piece of business in a totally different environment; the agreement may not work now. But, you have a contract and your annual plan “requires” that business at that price. What can you do? Neither side is to blame for the situation. With authorization from senior management, negotiate and consider this policy: If you give a concession to keep business in today’s environment, get one in return for tomorrow. This is a win-win for each party.
Despite the current troubles, this time will pass. Don’t give into the irrational fear that there won’t be a turnaround. If you can hold your rate a little, you can recover revenues sooner when this is over.
Timothy Coleman, a Certified Revenue Management Executive and chair of the HSMAI Revenue Management Special Interest Group, is a principal for hospitality consultant The Coleman Co. and former vice president of revenue management for MGM MIRAGE.
Marketing moves to embrace … and some to let go
You’ve heard it before: Don’t cut the marketing budget! But when the economy is making you cut back on just about every expense related to your business, when is it time to start rethinking that message?
Mary Ellen Tribby, publisher and CEO of Agora Financial’s EarlytoRise.com and co-author of the book “Changing the Channel,” says there are plenty of inexpensive and highly effective ways to attract new customers and stay in front of old ones.
Here are Tribby’s dos and don’ts:
DO send out an e-mail newsletter on a regular basis that is chock full of special offers, special events, coupons and more.
DO try your hand at online public relations by writing your own press releases full of informative information that leads back to your own website and business. Submit it to online press release sites, like PRWeb.com or Free-press-release.com, for distribution.
DO hold teleconferences to promote your business. All you have to do is set up an interview with an expert in the industry, arrange a call-in number for customers to dial in to and either charge a nominal fee for them to listen or possibly sell the recording later.
DO participate in joint ventures with other, like-minded businesses to promote one another’s products. Each side can make an equal contribution in the effort and then split the profit.
DO use pay-per click ads to target Web surfers who are looking for products or services just like your own. Your ad shows up only when someone is searching for keywords you have bid on and designated for your ad.
DON’T over-plan and endlessly tweak until everything is “just right.” Just do something to get your product or marketing effort out there; there is plenty of time to improve after you see reaction to it.
DON’T overspend. You don’t need to hire an expensive consultant to craft your marketing plan or spend thousands on a new website. Cheap freelancers are easy to find, and most of this work you can, and should, be doing yourself.
DON’T fall in love with your ideas and be ready to start over with new marketing materials or products as necessary.
Source: DeHart Co. Public Relations
The first rule of Fight Club...
There’s only one place for hoteliers, designers and everyone involved in the lodging industry to meet to discuss their concerns related to the recession: The “Fight Club” forum.
Visit www.HotelWorldNetwork.com/forums and click on the “100 Days to Fight the Recession” forum heading. Ask questions, offer tips, vent your frustrations or share good news and resources. This is one fight club everyone will be talking about.
Sponsored message: Wyndham Hotel Group
Wyndham Hotel Group develops hotels around the globe under the, Super 8®, Days Inn®, Ramada®, Wyndham Hotels and Resorts®, Baymont Inn & Suites®, Wingate® by Wyndham, Travelodge®, Howard Johnson®, AmeriHost Inn®, Microtel Inn & Suites®, Hawthorn Suites®, and Knights Inn® brands. For development opportunities visit us at www.whgdevelopment.com.
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