t’s the newer clients that express the most shock over the massive “market correction” that has begun to emerge in the meetings industry, said Tamela Blalock, CMP, MTA, manager of consulting services for Washington, D.C.–based meeting-planning firm
Courtesy Associates. Four years after the stock markets crashed and the national economy plunged into recession, meetings demand is on an upswing and the concessions that hoteliers and vendors offered in a desperate bid for business during the downturn have evaporated.
Some hoteliers are now pushing back on contracts
signed in 2010 and 2011, looking to renegotiate the rock- bottom rates they offered to customers, Blalock said. At the same time, clients are demanding to reopen the long-term contracts they signed at the peak of the economic boom in 2008 — hoping to gain some of the discounts still left in the market. “It’s a difficult conversation on both sides,” Blalock said.
“The suppliers want to focus on rate and be more strategic about getting the best value for their space. The buyers got a taste of how things can be discounted or packaged — and when they see the rates for 2013 and beyond, they think they are getting a huge mark-up.” With demand and rates headed back up to pre-recession levels, Blalock said, the negotiating climate is operating in a
“new normal.” “As tough as things were for a few years there, there was
actually some good that came out of it,” said Amy Allen, direc- tor of marketing for Caesars Entertainment. “From our side, we really got better at selling and marketing our products, at building strong and lasting relationships with our customers, and at learning to do more with less. From the client perspec- tive, they’ve had the opportunity to get more strategic with their meetings programs, ensure they’re more successful and drive the greatest possible return, and they’ve gotten better at measuring those things.”
74 PCMA CONVENE SEPTEMBER 2012
THE CURRENT CLIMATE North American markets next year will see “slow and steady” growth in hotel rates and travel costs, according to Carlson Wagonlit Travel’s 2013 Travel Price Forecast (convn.org/ CWT-13). Average daily rate (ADR) likely will increase by 3.2 percent throughout 2013, and the average cost for a meeting attendee per day will increase by 4.8 percent, accompanied by an average 6-percent increase in group size. Advance book- ings for 2013 are “already strong,” according to the report, and booking windows have increased a slight 5 percent as organizations feel more confident about the future. Hoteliers said they are feeling the impact of the improving
economy. Group business is “looking great” for 2013, Allen said, across all of Caesars Entertainment’s properties in Las Vegas, Atlantic City, and Lake Tahoe. “We’ve seen lead vol- umes increasing along with new bookings, and, as everyone probably knows, ADRs are increasing as well,” she said. “That being said, there are always some great opportunities for planners who can be flexible with their dates or even with the properties they’re willing to look at.” But planners will have to work a little harder for the
concessions and deals they found during the downturn, said Mary Ryan, convention sales manager for the Kansas City Convention & Visitors Association. Indeed, according to Washington, D.C.–based attorney Stephen Guth, bargains for planners will “dry up.” Hotels are beginning to experience