Affordable Meetings
Author: Sandi Cain
June 2007
Features
Tame The Budget Bear With Savvy Tips From Experts
Affordable meetings are a state of mind. After all, what’s affordable to a corporate CEO might not be so affordable to a nonprofit organization. Nevertheless, there’s one characteristic all groups likely share: they want to stay within budget. And that’s become an increasingly difficult chore for planners as our economy has shifted from a post-9/11 slump to a boom equal to that seen during the high watermark year of 2000.
Today, hotels are raking in higher profits and filling more rooms. Airlines—which cut schedules during the downturn—have full flights and higher fares. Car rental companies facing higher fleet costs have begun to employ the same yield management techniques used by airlines to drive pricing and availability. Meanwhile, meeting budgets have been restricted on many fronts. In a 2007 outlook survey conducted late last year, 74 percent of meeting planners said budget pressure and rising meeting costs were their biggest concern for 2007. When the economy is good, as it is today, planners often have a harder time cutting a budget-friendly deal.
“The analysis (of the meeting) is the biggest challenge,” says Doug McPhee, national account manager for Experient Inc. in Cardiff, Calif.
As prices rise, that analysis becomes more compelling. A Travel Price Index released by the Travel Industry Association of America in late March indicated overall travel prices were up 2.8 percent in February compared to the same period in 2006. Lodging prices increased the most: 4.3 percent from last February.
To be sure, much has been written about saving money on hotel contracts, and we’ll address that issue in a second story in September. But experts say there are other ways to save, starting with destination and transportation options.
CHOOSING WISELY: THE DESTINATION
In a perfect world, planners would be consulted before a destination is chosen. But absent that utopia, planners need to know how to make the best of it when they’re faced with a low budget in a high-cost, preselected destination. And when there is a choice, simply picking a second-tier city may not be enough.
“A big mistake these groups make a lot of times is selecting the destination without any consultation with the planner or CVB to learn about availability or peak seasons,” says Reggie Sears, CMP, of Sears Enterprises in Sacramento. Sears was Smart Meetings’ Give Me Five interviewee last October, and later this month he is scheduled as the presenter on ‘The ABCs of Site Selection’ at HSMAI’s Affordable Meetings West in San Jose, Calif.
Sears’ association and SMERF clients often choose their destination state, but rely on his recommendations to choose the city, making it easier to find destinations that fit their budgets.
But when the destination is already set in stone, there still are things you can do to mitigate costs. “If the city is predetermined but the budget won’t cover it, suggest alternatives,” Experient’s McPhee says.
Those alternatives might include using venues on the outskirts of the city, or holding the meeting during the city’s slow times. In Las Vegas, planners often get better rates midweek, while in corporate hubs, weekend rates might be more attractive. Or, if the group is small, ask about filling an available hole during someone else’s citywide event.
For one low-budget client that wanted to meet in downtown Chicago, Sears got bids from hotels in that area to illustrate why they couldn’t afford that option. The group ended up in Chicago near O’Hare International Airport, where rates were lower.
Similar tactics might be needed for government meetings, which typically face stringent per-diem guidelines. Some states are trying to address the issue by grouping their regional department meetings in the same city. If two departments can meet at the same location and share the food and beverage and audiovisual costs while conducting separate sessions, it’s a plus, says Duncan Farrell, general manager of the Society of Government Travel Professionals in Bethesda, Md.
Farrell says the U.S. Department of Justice shaved $8 million from a $38-million budget by calling 20 CVBs together, giving them a list of 30 meetings the department needed to schedule, and asking them for each city’s best dates and rates for those meetings.
Another money-saving tip is to think beyond hotels and convention centers, says Mary Young, CMP, director of meetings for M.Y. Events in Tempe, Ariz. Young, who is also a scheduled speaker for HSMAI’s Affordable Meetings West, suggests asking the CVB about alternative venues, such as daytime use of movie theaters or restaurants with large private rooms.
“If you’re not competing for the meeting space and guest rooms, you sometimes get better rates,” she says.
Other planners are big fans of using conference centers. There are 27 IACC-approved conference centers throughout the West, including 15 in California. Others are in Arizona, Utah, Colorado and Oregon. Woodlands, Texas-based Benchmark Hospitality operates four of them, including Chaminade in Santa Cruz. Dolce International based in Montvale, N.J. operates three in the West, including the Dolce Hayes Mansion in San Jose and Zermatt Resort & Spa in Midway, Utah.
“Conference centers are designed, built and operated for small to midsize groups,” says Hal Powell, regional vice president of sales and marketing for Benchmark Hospitality. They typically provide all-inclusive pricing and a plethora of high-tech amenities attractive to planners. “New planners might do well to start with this kind of thing, especially if they’re not full-time planners,” he says.
But all centers are not created equal. Not all have on-site guest rooms; some are connected to branded hotels like Hilton or Doubletree; some are on college campuses; some are in resort destinations. Be sure you know what type suits your group before choosing this option.
Incentive groups on a budget may need to explore different alternatives to make the attendees happy while keeping costs down.
Incentive planner Alison McNeice, president of Genesis Incentives in Tustin, Calif., sometimes suggests three-night trips instead of five nights, regional destinations that eliminate air travel, fewer organized food and beverage events or working retreats at resorts to accommodate budgets. “Whatever you choose, it’s up to you to sell it as an incentive destination,” she says.
CHOOSING WISELY: TRANSPORTATION
Meeting planners may not arrange air travel, but they still need to know something about transportation options from the airport to the venue, how to get around town cost-effectively and the best way to shuttle attendees between the meeting venue and off-site events. CVBs are a good place to start for that advice, Young says, because they may be able to provide discounts or passes for transportation.
It’s not a bad idea to know something about the airport(s), either. “When you’re doing site selection, it’s important to check what airlines service the area and ideally find (a location) with low-cost airlines instead of one with an airport dominated by one airline,” says Bonnie Wallsh, CMP, CMM and chief solutions officer for Bonnie Wallsh Associates in Charlotte. It’s a well-documented fact that low-cost carriers drive overall fares down. And groups whose attendees are paying their own way are “less likely to go where it will cost them more,” Sears says.
Planners expecting international attendees also need to pay attention to arrival and departure times for international flights and set meeting times accordingly, Young says. You don’t want to start a reception at 6 p.m. when half the attendees might be touching down at 5 p.m.—particularly if you have ordered food and beverage service based on your total attendee count.
It’s also important to ask questions about the distance between a city’s airport(s) and the venue, as well as the cost of various means of getting between the two. Some cities have shuttles with standard airport-to-downtown rates. Corporate planners should make sure attendees know the allowable per diem for transportation. Also ask about alternate airports where private charters or corporate jets might land. That might not save money in the meetings budget, but it might for executive-level attendees who won’t forget the gesture.
For regional drive-in meetings, ask the venue whether a reduced parking rate can be negotiated for day guests or for the entire group.
Wallsh also checks car rental rates, local gas prices and vehicle availability. Neil Abrams, a New York consultant who tracks the car rental business, suggests that planners try to lock in rate programs for attendees using companies like Enterprise that don’t market heavily to the group sector.
“It can save a lot of money, especially if you guarantee a certain number of transactions,” Abrams says. Choosing off-airport rental locations is another cost-saver, because it eliminates some airport fees.
In the Northwest, Washington, Oregon and Idaho are working together on a creative program that would allow joint car rental agreements for government workers in those states. If successful, SGTP’s Farrell thinks the concept
might expand.
Planners choosing remote resorts—often popular with executive-retreat and incentive groups—should take care to balance the time and cost of getting there versus the time attendees will spend there. Sears says the cost to bring in speakers to those locations may be higher as well. For instance, if you send a car from Lake Tahoe to pick up a speaker at the Reno/Sparks Airport, you may be billed for the travel time, he says.
Whatever you do to cut destination and transportation costs, the bottom line is to know your client and do your homework. Look at the value of the meeting and ask if there’s another location or another way to accomplish the objectives that might cost less.
“If planners spend more time up front, they’ll spend less time later,” Experient’s McPhee says. And by doing your homework, you’ll be able to spend less money as well.
That said, meeting planners tend to be a creative and flexible group who typically thrive on turning lemons into lemonade. Today, they’re faced with the challenge of helping clients understand the synergy between a meeting’s objective, the budget and the destination. And knowing details of the meeting is the first step in deciding how to make it affordable.
