2016 sets a positive outlook for the meeting and event industry. Organizers are noting an increase in attendance and opportunities. However, with more business comes additional competition for venues, services, and travel. Thus, we begin the shift back to a Sellers’ Market.
A Sellers’ Market along with the some significant consolidation within the hotel industry are game-changers for companies hosting meetings and events. These changes are already affecting the way we plan and budget.
What a Sellers’ Market Means for Meeting Owners
- Increased Venue Pricing
- Carlson Wagonlit Travel (CWT) reported the cost of booking a meeting at a hotel has increased by an average of 4% in North America. While this may not sound like much, a room rate that was $229 is now $238. For a three night, 500 person meeting, that means an increase of $13,500 plus tax.
- Growing Food and Beverage Costs
- The demand for healthier food and beverage options continue to reach new levels. Hotels are now seeing more requests for organic, vegetarian, and gluten-free, as well as locally sourced everything from produce to microbrews. As a result, the cost of food and beverage is on the rise.
- CWT predicts this trend will lead to a 4.5% increase in cost per group guest.
- Increased Lead Times
- High demand has led to limited venue availability and forced planners to start looking earlier. The first quarter of the year is especially competitive as it is peak season for sales kickoff meetings. Depending on the size of your meeting, you’ll want to start looking for a venue, at least, a year out. Remember the larger your event is, the more difficult it will be to find space.
How the Marriott-Starwood Merger Effects the Meeting and Event Industry
Marriott and Starwood are expected to close their transaction mid-2016. Today, Marriott is already the most influential pricing leader in most major cities. By merging with Starwood, they are sure to gain even more pricing power.
Marriott’s success is contributed to them having the best research out of any lodging company, and now they will be gaining all of Starwood’s data. This data will allow them to better predict when meeting planners organize events in major cities, and price accordingly.
Finding the Best Deal
When hotels gain control over pricing, it requires meeting organizers to get creative. For starters, you will want to engage the meeting owner sooner and set their expectations for what it’s going to take to get them the best deal.
- Plan Earlier
- By planning earlier you can reduce the number of companies competing for the same space and give yourself more room for negotiation.
- Know Your Numbers
- Tally total spending with hotel chains to use as leverage for better pricing.
- Flexibility is Key
- Being flexible with your dates and destination will allow meeting organizer the ability to come back with the best deal for your meeting.
Remember, this is a people business. It’s important to know your partners and never be afraid to ask.
Until next time!