by Elizabeth Zielinski, CMM | July 24, 2014

When I first became a meeting professional in the late 1980s, the hotel industry was just entering a slow economic market where buyers enjoyed a position of greater influence than in previous years. After a few years in my position, I had gained the autonomy to make certain decisions regarding site selection and contract negotiation, and I did that with the luxury of time and choices that a true buyers’ market can offer. I learned a lot, but it didn’t prepare me for doing business after the economic shift that redirected the marketplace in favor of sellers in the mid-1990s. When that happened, I had to adjust my practices regarding prioritization of needs in an agreement, and in negotiating a fair and equitable deal for both parties. I’m sure many of my experienced colleagues have similar memories.
In 2014, we are about five years past the most recent economic downturn that affected hotels and meetings, which began in 2009. While hotels aren’t completely back to their 2008 boom level, most indicators place them close enough to say that we are clearly in a sellers’ market when it comes to purchasing products and services from hotels. And while five years might not seem like a long time over the length of a career, it’s plenty of time for someone relatively new to the meetings industry to be experiencing these economic conditions for the first time. I thought I would share some of the things I learned when I had to make a similar transition early in my own career.
Solid cancellation clauses are more important now than ever. This is not because groups are more likely to cancel their meetings, but because hotels are more likely to cancel their booked groups in favor of a more lucrative piece of business. It’s not a common practice, but it does happen. There are times when it’s more financially attractive for a hotel to pay the cancellation costs to one group, in exchange for the potential profit offered by another. It’s important that your booking agreements clearly define all of the losses your group would incur if this should happen, and those go beyond direct costs. Consult an attorney experienced in hospitality contracts for more specific recommendations.
Attrition will always be an important issue for planners. That's still true, but it should be approached differently. Hotels are likely to attract more transient business, which might suggest that their attrition demands will be lower. But these market influences negatively affect groups more than hotels, because rising hotel rates will drive more guests to book their accommodations through one of the discount options, such as Priceline or Hotwire. On the other hand, additional rooms at the group rate are unlikely to be available if a planner goes too low on their reserved block. The key in this situation is to rely carefully on historical data and determine trends. If you don’t have that recorded, in some cases the host hotel for previous meetings can provide that information. If no historical data exists, such as with a new program, then provide lots of backup options at nearby facilities that attendees can book if the block fills up early.
Time is of the essence. Planners have to be more attentive than ever to the terms offered by a hotel regarding first options to hold space, and when they expire. In a buyers’ market, it’s safer to assume that if you miss a response deadline by a day or two, your preferred space and dates will still be available. What often happens in a sellers’ market is that the space is gone immediately after it is no longer on hold in a computer system, and time doesn’t always allow for you to get notification of your lost booking opportunity. Pay careful attention to deadlines and respond as requested.
There are many more changes that newer planners will experience for the first time as market conditions ebb and flow. But these I have mentioned are part of every booking agreement made, and are good starting points to changing your perspective to the new normal.
I would love to hear from experienced planners with more tips about adapting planning habits to current market conditions. What did you learn when you faced a changing marketplace for the first time? Please comment below, via email to, or find me on Twitter @E_Zielinski.