Smart Meetings

Interview with Michael Beardsley

Author: SM Staff
October 2007

Give Me 5

Chief Executive Officer

Inn Fluent, LLC, Ashburn, Virginia

You may know Michael Beardsley already—he’s currently chairman of the Board of Trustees for the MPI Foundation, where he has served as a board member for the past five years. What you may not know is that last month Mike launched Inn Fluent, LLC, a new independent site-selection company, one that redefines the model (innfluent.com). A lodging industry veteran, he was previously with Marriott International for 20 years, rising through the ranks of sales, marketing and revenue management. Most recently, he was responsible for field sales for North America, national group sales and sales support. We took this opportunity to chat with him about his new company, the industry and the future.
 

WHAT WAS YOUR “AHA!” MOMENT THAT LED YOU TO START YOUR OWN COMPANY?

My business partner, Joel Pyser (Inn Fluent president and COO), and I each have 20 years with Marriott. We sat there together and said, Marriott was good to us, we had great careers, but we want to try something different, to control our own destiny, so to speak. We were lucky; we were able to be entrepreneurial within Marriott, but that latitude was changing, becoming more restrictive. It led us to the point of saying, let’s try to do this on our own. I love this industry and wanted to stay a part of it, but do it differently.

We looked at the landscape and asked ourselves, how could we build something like our competitors—we have tremendous respect for Roger Helms [HelmsBriscoe], as he created the site-selection industry—but how do we strengthen the partnership between our customers, suppliers and associates, all working together toward a common goal.

HOW DOES THAT APPROACH WORK FOR MEETING PROFESSIONALS?

We’re like an independent national lodging sales organization for our customers. We help them with site-selection and contract negotiation, assisting planners with the time-consuming process of sending out RFPs, consolidating the responses and recommending the venue that will be the best fit for their event. Then, with our depth of experience with group contracts, we assist with negotiating the best contractual terms for our client and the hotel, as partners. Our involvement in this process enables the planners to spend more time on the meeting content and logistics, thus increasing their productivity and reducing any potential liability in the contract. Our team will act as their personal national sales director in the hotel community, representing them to all hotel brands to ensure they get the best proposal possible.

WHAT DO YOU OFFER YOUR HOTEL PARTNERS?

This is how we’re really different. We looked at how do we make our business more incremental to hotels, how do we show our value. There are two ways. One, our focus will be on middle-market accounts that the hotel companies don't have the resources to go after. We’re an extension of their national sales team.

 Secondly, we work on need dates and shoulder dates. Hotel inventory is perishable: the closer to arrival, the harder the rooms are to fill. So we said, why don’t we stay focused on what is most incremental to the hotels and create a tiered commission structure that is commensurate to the value of the business. The cost of commissions is rising faster than group revenue—this is constantly on hotels’ radar screen. We wanted a better compensation model, one that rewards us and our associates on short-term business and that supports our value proposition to the hotel community. Anything that books within 12 months is 10 percent, the industry standard. Anything that’s within 13–36 months is 8 percent and anything 37 or more months out is 6 percent.

WHO PAYS FOR THE SERVICES?

A lot of our competitors say their services are free, that the hotels pay for it. That's true; the hotels do pay us. But nothing is free; ultimately everything is paid for by the customer in the cost of their meetings. The hotels might write us a check, but they evaluate every business opportunity based on its profitability, so there are portions of the commission cost that get passed along by them; planners may get fewer concessions, for example. Nothing is free in this world.

HOW HAS THE RECENT HOTEL CONSOLIDATION AFFECTED THE INDUSTRY?

The consolidation, I believe, is good for the industry and the meetings market. It’s hotels consolidating into customer segments, like Marriott did; it allows brands to go from economy to extended stay to moderate and luxury. It allows hotels to remain competitive.

What’s happening also is there’s more globalization, with brands coming to the U.S., like Shangri-la, Peninsula, not only brands going outward. There are fewer borders—more globalization of meetings. That’s where MPI is headed, where the Foundation is moving. Consolidation is helping the good of the industry. It’s a great opportunity for the meetings market.

WHAT ARE THE BIGGEST CHALLENGES THE MEETINGS INDUSTRY WILL FACE IN THE NEXT FEW YEARS?

We’re heading into a softer market. The last three years have been outstanding from a hotel standpoint, a seller’s market for hotels. Now it’s moving across to a buyer’s market a little. It depends on the economy; hotels follow the GNP. Hotels did well with raising rates, with occupancy growth being stable. The economy will determine if group activity will be smaller, if companies will be cutting back. No one has any answers right now.

We won’t see the same kind of expansion as Vegas in 2000, although there’s a lot of supply growth in economy and mid-tier. This year’s growth will be 5–7 percent (although hotels may say 7–9 percent); next year, it’s probably 4–6 percent. Right now everything is a rate play—when that breaks, hotels will need to grow occupancy, and that will be through group meetings. 

WHAT ARE YOUR PLANS FOR THE FUTURE?

We’re not a full-service meetings or incentive company; that’s not a goal. What we look like in five years could be another story. We may look to go international, fine tune that to relate to our specific business needs. The intermediate market is huge in Europe, but that’s down the road; it’s not in the short term. C.K.