Next, multiply this estimated total event expenditure by 10
to 20 percent to project potential savings in the first year. When presented with the facts, executives can’t help but acknowledge the value of SMM.
FULL STEAM AHEAD Once you get approval to move forward, where do you start? For many small- and medium-sized companies and associations, hotels represent the largest portion of meeting and event expen- ditures (45 percent), which is why gaining visibility and control of hotel costs should be your first step. Of course, there are other elements to consider; but rooms for sleeping and meeting are some of the most common areas of launch for SMM. If the project’s scope seems overwhelming at first, start
by tracking the expenditures already under your control. Even having data on a limited number of meetings can begin to paint the picture of potential savings. Next, reach out to others in the organization, starting with those who are proven experts in hotel contracting. Ask them to support your SMM initiative by reviewing and negotiating a limited number of contracts for others in the organization. If your company or association has a high volume of meet-
ing and event contracts, it makes sense to tackle the riskiest first. You can do this by determining a dollar amount over which a specialist will step in. For some organizations, this might be anything over $25,000 or $50,000 for a single event. As the program matures, you can adjust the threshold to cover a higher or lower volume of contracts going to the experts. Once you have your experts onboard, ask them to help you
develop a standard checklist so that all negotiators will address the same requirements and possibilities for every contract. This should include a list of must-have concessions and nice-to-have concessions. A must-have concession might be a rebooking clause, one that allows the company to rebook within a specific time period, without penalty, if it has to cancel a meeting. A nice-to-have concession might be the presidential suite charged at the same block rate as the other rooms. Finally, check with your legal department to ensure that terms used in the contracts—such as force majeure, cancellation, and arbitration—align with association or corporate requirements. The data from this centralized process will easily reveal who is doing the planning within the organization, how many meetings are being planned overall, which hotels are getting the business, how much is being paid out, and eventually how much has been saved through leveraged purchases and expert contract negotiations.
FACTS ON FILE From the first you need a system for organizing the data. Where to start? A standard practice for many companies utilizing SMM is to keep a savings sheet with each contract so the negotiator can track all concessions and the savings associated with them.
www.elitemeetings.com
Be sure to fill in the worksheet during negotiations—why waste time having to go back and recreate the data? Soon you will have a nice collection of figures that shows the savings meet- ing-by-meeting, month-by-month, and quarter-by-quarter. Ul- timately, you will end up with annual statistics that will boost enthusiasm for the project dramatically. Keep it simple. Write down the first room rate quoted
by a hotel and then compare that to the rate finally agreed upon. The difference between the two rates, multiplied by the number of room nights, is the total savings on accommoda- tions. For example, if the original room rate was $200 a night, and you negotiated down to $175 for 100 rooms, the savings would be $25 a night, times 100 nights, equals $2,500. On top of that, you may have reduced the meeting-room
rental from $2,000 to $500 for each day of a two-day meet- ing. That would result in a savings of $1,500 a day, times two, equals $3,000. Maybe you got the presidential suite for your
When presented with the facts, executives can’t help but acknowledge the value of SMM.
CEO for two nights at $450 a night rather than the usual rate of $900 a night, resulting in another $900 in savings. Just these three items add up to a savings of $6,400. More than likely you will have several more line items of concessions, which will compound the savings. Remember to keep it simple. The less complex the savings sheet, the more likely you and others are to use it. And remember: As the program builds momentum, be sure to communicate the savings achieved and oth- er successes throughout the organization; don’t hide the data in a drawer! When people see their changes actually making a difference, they will redouble their efforts to support the initiative and build compliance. After all, what’s good for the organization is good for everyone involved.
Betsy Bondurant, CMM, CTE, has more than 30 years of experience in hotel sales, meetings and events, and travel and trade show management, including 12 years of direct in- volvement in strategic meetings management. In 2007, she left the corporate meeting world to start Bondurant Consult- ing, a company that provides everything from educational content for client events to full design and implementation of SMM programs for corporations and associations. For more information, go to
www.bondurantconsulting.com, or e-mail
betsy@bondurantconsulting.com.
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