Controlling Costs in a Seller s Market
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1 Controlling Costs in a Seller s Market Dan Ketelsen Chris Riccardi NAW AEC Summer Association Executives Council Meeting, Dana Point, CA
2 Flexibility Hotels didn t invent revenue management, they learned it from the airlines If possible, be flexible with your meeting dates and pattern Typical Hotel Demand in Cities Sunday Monday Tuesday Wednesday Thursday Friday Saturday Demand Low High Premium Premium Premium Low Low Tips for Getting Good Rates Hotels love Sunday Wednesday and Wednesday Saturday patterns Hotels really, really love Sunday arrivals If you have to commit to dates prior to an RFP release, identify three date options that will work for your group. This will save a lot of time in sourcing.
3 Multiple Deals Everything is better in bulk Think about booking multiple meetings at the same time within the same brand or hotel ownership group Booking two or more meetings at the same time could result in lower rates and/or costs
4 In The Year, For The Year Hotel rooms are perishable Contrary to the previous slide, hotels are always hungry for in the year business. Flexibility is the key to getting a great deal. Most hotels post Need Dates on their websites Tips for Getting Good Rates Be flexible, with dates and patterns Consider shoulder or off-season periods for resorts
5 The Off Season There s a time and a place for every group Consider placing resort meetings in the offseason, to get the best deals Recent Examples Bermuda (High Season May thru September, Low October through April)
6 Take Advantage of Economic Downturns Associations always hold meetings. Take advantage of low rates at luxury hotels during downturns. This is another opportunity to capitalize on multi-year agreements.
7 Consider Partnering with Sister Organizations Either at the same time or before/after, this will multiply buying power and might even help attendance.
8 Spend Your business is worth more than room revenue. The more you share about your groups spend with a prospective hotel, the better bid you ll receive. Areas to consider: food & beverage, internet, A/V, parking, and/or ancillaries like golf or spa Sample Outlet Usage/Revenue Report
9 Catering Ask your hotel convention services or catering manager what menu items are at a premium. Example: The recent California drought raised menu prices nationwide, even for simple items like tomatoes and lettuce
10 Send the RFP to your Global Sales Representative We re In the Know on properties that have distress dates and/or need help replacing a cancellation. Luxury on Sale 250+ Luxury Hotels and Resorts Worldwide
11 Contracting Tips
12 Group Meeting History Hotels typically share information on groups. Items that will make the contracting process easier- Strong attendance history from the last 3-5 years? Have you ever cancelled a meeting? Good credit
13 Decision Date How soon can you make a decision? The sooner the hotel can get you on the books, the better the deal. A short decision period will force a hotel to put their best offer on the table right away. Hotels will be more generous with concessions for meetings with a decision date near the end of the month/quarter/year. How many years ahead can you book a meeting? The ideal time to book depends on meeting size and location
14 Concessions Control your concession list. If you don t need it, don t ask for it hotels assign a dollar value to everything when reviewing RFP s. Hotels will also offer concession packages. If a hotel offers concessions in their package that you don t need, try to exchange them for other ones that you do need. Budget Concessions
15 Controlling On- Site Costs
16 Guest Room Attrition Mitigation Rebook rebook the same meeting or another meeting Purchase rooms to meet minimums
17 F&B Minimums Mitigation Upgraded F&B Closing Amenity
18 Round Table Discussions
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