Local hotels and resorts have seen a drop in corporate meeting business as the down economy has pushed companies to re-evaluate their spending.
This doesn’t mean that corporate meetings have stopped. They just are being planned later and with less money.
This has pushed some business away from resorts or toward less expensive and centrally located hotels to accommodate more regional meetings.
Business Journal reporter Michael Volpe asked a selection of Orange County hoteliers and convention planners to share their thoughts on how corporate planning has changed in the past year. An edited version of their responses follows.
Robert Donahue
Director of conventions and resorts
Disneyland Resort and Hotel in Anaheim
The trend with corporate meetings is continuing to be short-term in nature and the decision-making is taking longer. Most of all corporate meeting planners just are more cautious at the end of the day. The corporate entity has to really be serious about spending that money before the meeting planner even sits down with us. They want to get the most value out of the meeting, especially in these economic times. We find ourselves spending more time going over specific parts of the business with clients. The Disneyland hotels all work to put together really value-oriented proposals that address what planners and businesses want to get out of a conference or event.
Competition between venues is greater as demand has softened. Most of the competition can react with low rates and discounts on pretty much everything, but that still doesn’t improve your competitive position with the venue. What we are getting around to is that clients still need to make sure that they are selecting the right destination and the right hotel that meets their needs because the value of the conference is still very important to them.
If you get a great deal but you can’t deliver the right conference, it really won’t matter at the end of the day. The overall convention market has become very competitive without question because of it.
Kay Cochran
Director of sales and marketing
Hyatt Regency Huntington Beach Resort & Spa
Corporate planners are booking much shorter-term meetings that are tending to be more regionally based. As the size and length of the meetings have shrunk, so have the budgets. Businesses are concerned with perception, so planners are having to be very cautious with site selection as well as cost. There is less focus on meeting extras such as recreation, team building activities and food and beverage. Planners are looking for the best value for their programs and are less concerned about the facility or amenities that are being booked.
George Munz
Marketing director
Ritz-Carlton, Laguna Niguel
The ways people make their buying decisions or even decide to have a meeting have changed dramatically. Before the meeting planner even gets to us now, they’re making big decisions about the necessity of the meeting. They are deciding: Is it three meetings versus one meeting and a conference call? Is it a big national sales meeting or do we want to postpone that and do some smaller regional meetings?
All these factors come into play before it even gets to us now. Just like the individual traveler, corporate meeting planners are only doing the meetings that are the most important because of budget concerns.
Furthering the change, most companies have been fighting the perception that if you’re having a meeting at the Ritz-Carlton, it’s somehow extravagant or unnecessary. We feel if it works and you can get additional work done, great. If you’re entertaining your customers, rewarding your employees or having a fun little meeting, we’re here to help you do it in a responsible way. Anything to excess is the problem.
Dan Fitzgerald
Sales and marketing director
Hilton Orange County/Costa Mesa
We have seen the booking window tighten for corporate meetings because they’re waiting to the very last minute to have to commit those dollars. In some cases they’ll book a week out,so we can’t even forecast more than a month in advance. Also, we’ve had a few planners contact us about renegotiating current contracts and we look at them on a case-by-case basis. Most of the time we don’t renegotiate because we made the best offer at the time based on the merits of the business, but not necessarily based on the market conditions. The corporate market has just dried up for us as demand has fallen off the face of the Earth. As a result of the drop off in corporate meeting work, the hotel has deployed our corporate people to go after other markets. We’re looking into the associations market, social gathering market and the ones that are a little more resilient to the economy.
Thomas Morton
Convention center, sports and entertainment executive director
City of Anaheim
It’s just more short-term. The bottom line is that people have been on hold for such a long amount of time. Now it’s “OK, let’s go and let’s get this meeting that we have been holding off and put it together.” The time frame that may have been 18 months to two years to plan a big event or corporate gathering is now six months to 12 months.
Brad Logsdon
Director of sales and marketing
Hilton Anaheim
Meeting planners now more than ever are looking for ways to conduct a tradeoff with hotels. Five years ago when companies were running strong, the risk of them having to cancel a meeting or only taking up 50% of their (room) block was not high. People weren’t that hesitant to sign contracts,the standard hotel contract hasn’t changed much in 20 years,that had cancellation fees and performance damages that required companies to pay for 80% of reserved rooms at the group rate.
With the times being tough, a lot of companies’ meeting planners are saying, “I have some short-term business for you that will take place in the next year, but I need the hotel to assume some of that risk with us.” They are willing to give you a meeting, but don’t and can’t be locked in to a dollar amount. Now if something unforeseen happens, the meeting planners are not left holding the bag and having to pay the hotel $25,000 to $100,000 in cancellation and performance damages.
That’s the biggest thing that’s different. People have started to sign contracts again, but it’s definitely with a sense of wanting the hotel to assume some of the risk for short-term business. If they are calling us for 2012 or 2013 with that same type of approach, we’re not being as open or receptive about that because who knows what it’s going to be like in 2012 or 2013.
Ken Buksa
General manager
Sheraton Anaheim Hotel
Groups are about 25% to 30% smaller than we have seen in the past and everyone is looking for a deal. Any type of corporate meeting basically came to a standstill for our hotel and the business is almost nonexistence compared to prior years. Meeting planners are looking to renegotiate contracts signed months or years ago and they don’t want any responsibility for fallout if the meeting falls through. Even with discounts and perk giveaways, the corporate meeting market has been very difficult for us. Especially with the larger hotels struggl-ing to fill up their rooms and offering meeting rates that smaller hotels like ours have trouble matching. Like everyone else, they are doing it to try to survive, but they are damaging the market for the rest of us.
Steve Pufpaf
Director of sales and marketing
Anaheim Marriott Hotel
Meetings are still taking place and we are still engaging with the customer. The actual closure window is much longer so a lot of our groups are looking around when they put the (request for proposal) out and they are taking much longer to make a decision. Once groups are definite and nailed down, it’s pretty status quo for us on the planning side. Everyone is looking to leverage their partnerships with their hotels and making sure we’re being financially responsible in terms of the program that we are executing or that we’re hosting. It’s all good since it keeps everybody sharp.
Mindy Abel
Senior vice president of convention sales
Anaheim/Orange County Visitor & Convention Bureau
Meetings are still happening,they are just more conservative in their approach and location. Businesses are being much more fiscally conservative. They are picking locations that are more meeting focused versus what might be perceived as not being meeting-focused. Everyone is aware of spending well and spending smart in this current market. Perception and value are what meeting planners are looking at when they look to have an event these days. The meetings have also become smaller. People are still doing business. Although we have seen a fall-off in room blocks, I expect that’s not an indication that groups are down but that people are shopping for the deals.
