Accommodating deals
July, 2009

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Hotels are adding value to attract and retain key clients

 By Lucie Grys

Despite news of the economic slowdown turning to a more positive note and media reports filtering out that the worst may be behind us, competition among hotels to secure corporate meetings and convention business is still ongoing.

According to industry experts, the key to drawing and retaining key convention business is creating value added incentives and offering optimal customer service.

“Meeting and convention business is critical to everything we do,” says Tony Pollard, president of the Hotel Association of Canada.

Most hotels work with a ratio system when it comes to booking conventions. The more rooms that are booked, the better the chance to get deals on meeting facilities and food and beverage programs. He notes the best times to negotiate deals is during March Break and the second week in December.

Hotels are finding that adding value rather than reducing their room rates is proving to be an invaluable bonus when securing meeting and convention contracts. “Meeting planners can sell value-added benefits to their clients. As a planner, everything comes down to dollars and cents,” says Pollard, a 20-year industry veteran.

While a hotel may lose revenue on a value added bonus like reduced golf course rates or complimentary parking, they are still filling rooms and might, in turn, get a better return on food and beverage because those rooms are full.

According to Advancing the Issues, a recent survey conducted by Fleishman Hillard for the Hotel Association of Canada, “five percent less business travel is projected for 2009 with the increase in video conference and economic challenges,” notes Pollard. Of the 571 business travelers interviewed, 76 percent noted that free business Internet was a big draw, as were free upgrades and discounts. “Most business travelers expect to pay between $126 and $150 a night and loyalty programs increased dramatically in importance as did reward programs. However, friendly customer service is still key,” he adds.

“In Canada, we have some of the most iconic hotels spanning the east coast to the west coast. There is a significant value proposition to offer our customers to meet at an historic property,” says Mark Sergot, vice-president of Global Sales at Fairmont Hotels.

Sergot is seeing meeting planners looking for value to justify convention business across all sectors. Recently, Fairmont announced a program offering a 10-percent credit to the master account to any clients who book meetings in 2009 and 2010 at Fairmont properties.

“Whether companies chose to apply the 10 percent credit to a future meeting or to offset expenses, the credit is geared to groups concerned with value in today’s environment where dollars and overall spend being a big issue,” Sergot notes.

Fairmont Hotels has gone a step further to retain key business and for those planners and companies who commit beyond a one-year cycle and sign agreements to hold meetings at other Fairmont properties across Canada. Fairmont will give back a 3-percent credit to room revenue for a two-year contract, 5-percent credit for a three-year contract and a 10-percent room credit for a four-year contract.

“It all comes down to understanding what it’s going to take to book a hotel and what the client’s needs are. Every client has very specific needs and it’s our job to create specific solutions,” says Sergot. “We want people to walk away from a meeting with a sense of accomplishment.”

Kostas Christopoulos, director of marketing at Four Seasons Vancouver agrees that you have to offer competitive incentives to bring in the business. “Vancouver is a very competitive market and we promote a value-added package in our “My Meeting” program. Depending on how many rooms are booked, clients can chose a system of rewards that includes everything from room upgrades, food and beverage, value added audio/visual packages, up to 20 percent attrition and other comps.

“Our focus is not on the price but on the value. When people book events at the Four Season, they know we will deliver,” says Christopoulos.

Of particular note is Four Seasons’ openness to be flexible with people’s budgets. Christopoulos remarks that there are a lot of last minute bookings and budget changes. Meeting planners’ decision-making cycles are different and the process for budget approvals is also different than it was before the economic downturn. Companies aren’t planning too far in advance, and when they do make a decision to hold an event or a conference, it tends to happen quickly.

To retain key connections and ensure repeat business, Christopoulos notes that customer service and follow up is critical. “Understanding a client’s needs and exceeding their expectations is all part of the job.”

Krista Cameron, director of sales and marketing at Destination St. John’s, the Convention and Visitor’s Bureau for Eastern Newfoundland, says, “We’re not feeling the recession at all. The city is sold out and convention business has been booming in 2009. Our statistics show record attendance.”
 
The draw for visitors and meeting planners to St. John’s is the fact that the city is a unique destination that a lot of people have never been to. Able to accommodate up to 3,000 people, meeting planners are now looking to St. John’s as an extremely viable option.

“Our convention season has grown from June to September to mid-April to mid-November because of demand. We are just being ourselves and largely through word of mouth, our business has grown,” Cameron says. “All conference organizers say over and over again that it is the friendliness of the people of St. John’s that is a huge draw.”

Due to St. John’s exclusive location, many convention visitors bring their families, which is a big economic benefit for the province.

“Our sales teams build loyalty but it’s really the experience that people have when they visit that draws them back. I’ve yet to meet someone that didn’t want to return,” she says.

“There are two ways to look at drawing and retaining business to your hotels,” says Frank Dirocco, National Sales Director for Delta Hotels. With 16 years of service with Delta Hotels, he knows what works. “You can use incentive programs like Aeroplan miles and other promotions, which are successful. Or, our philosophy at Delta is to work with customers on long-term strategies across the country with a series of open meetings. This creates loyalty and we build on success.”

A major push at Delta is creating emotional connections with customers and working straight from the heart.

“We are very relationship driven and we try to earn their exclusivity if we can. We look at their calendar of events and meetings and match the right facilities with the right meeting,” says Dirocco. “From a national sales perspective, no one saw that the economic slowdown was going to hit as hard as it has and we are trying to be proactive. We go back to customers and ask how we can help with their plans and budgets.”

Among the top requests from customers is the ability to be flexible with contracts. On the corporate side, planners are asking for a lot of flexibility and Delta Hotels is adding more value-added incentives.

“Pricing is very competitive and all the brands out there are offering the sky. Delta has done an excellent job retaining business because we offer good value for the product,” says Dirocco. “Our Meeting Maestros program creates a culture that is all about impressing. We wow them with the site inspection and our response time is guaranteed to 24 hours. Sometimes that’s all it takes to show willingness and a desire to do business. Acknowledgement is crucial.”

InterContinental Hotels and Resorts boasts a points and rewards program as an incentive for meeting planners. By booking a qualified meeting until the end of the year, meeting planners can earn up to one million bonus points to be redeemed for meeting credits ranging from $250 to $1,000. Points can also be redeemed for free nights, airline miles, retail gift certificates and more. And now, there is an extra incentive for meeting planners where they can earn double the Priority Club Meeting points between now and the end of the year. Priority Club Meeting points never expire, can be redeemed worldwide at more than 3,800 facilities and there are no unsettling black out dates.

With stiff competition for business across the board, hotels must be innovative and adaptable when it comes to securing meeting and convention business. Through excellence in customer service, flexibility with contracts and offering incentives like points or credits to a master account, meeting planners have a bounty of options available to them.

Knowing that salespeople are open and willing to negotiate and custom design a program to fit every need and budget proves that there’s no excuse to postpone a sales event, an annual general meeting or a training seminar despite the slow economic recovery.

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