Meetings & Conventions: Can you be bought? March
Can you be bought?
When supplier perks become planner payoffs
BY MARIA LENHARTT
housands of frequent flyer miles on the
airline of your choice. A free cross-country roundtrip air ticket.
A complimentary stay for two at a luxury resort, with no tiresome
site inspection or promise of future business attached.
All of these are tempting offers that many hotels and even a few
tourism organizations use to attract meeting business. So what's
the harm? Travel benefits are one of the upsides to the meetings
business, right? And, all things being equal, why not go with the
hotel that rewards your loyalty, right?
For many planners -- and even some ethics experts -- there is no
clear answer. While most everyone would agree that hotel choices
should not be based on personal gain, the issue of whether or not
to accept points or other rewards for simply booking the business
is somewhat murkier. Depending on the situation and viewpoint, one
planner's perk is another planner's bribe.
A MATTER OF MARKETING
Ironically, more hotel companies seem to be coming out with point
programs for meetings at the same time that concern over the ethics
of such programs is growing. The concept is even being adopted by
tourism organizations, among them the St. Paul (Minn.) Convention
& Visitors Bureau and Tourism Switzerland, each of which offer
frequent flyer miles to planners who book meetings in their
But while there may be more point programs in existence these
days, the practice of rewarding business with travel benefits is
hardly new, notes Randy Pennington, an ethics consultant and
president of Pennington Performance Group in Dallas. "What's
changed is that suppliers are much more open about it now -- it's
become institutionalized," he says. "In the past, a hotelier would
just say 'come for a weekend' and that sort of thing. Now there are
While not an advocate of point programs, Pennington thinks
they're an improvement over how incentives were offered in the
past. "The secretive nature of the old system was really bad," he
Why are hotel companies, especially given the advantage they
already hold in the current seller's market, offering these
programs? Hoteliers say they are an effective marketing tool that
helps generate business, particularly when and where they need it
most. Some hotels offer booking incentives only during their slow
seasons, and many of those that offer year-round programs beef them
up with double or triple bonus points at certain times of the year.
And most company-wide programs offer far more points for booking
hotels in less popular locations than they do for those that
already enjoy high occupancies.
"It's really helped us fill some holes," says John Lavin, vice
president of national sales for Doubletree Hotels in Phoenix, in
reference to the company's "Ticket to Success" program, which
awards airline tickets to planners who book 50 or more room nights.
Originally intended to cover only the last quarter of 1997, the
program has been extended until the end of this month.
Similarly pleased with its point program is the St. Paul
Convention & Visitors Bureau, which began its St. Paul Meeting
Miles program in late 1996. The program, which awards frequent
flyer miles on Northwest and KLM, was designed to expire this
month; it has been extended for another two years. Why? The city
credits the program with generating at least 800 room nights
already, according to CVB spokesperson Jean Friedl.
But pressure to keep up with competitors may also be a big
reason behind the offerings. "We probably wouldn't have a program
if it weren't for the fact that Hyatt and Marriott also offer
them," says Brian Stevens, vice president of sales and marketing
for Hilton Hotels Corp., which recently expanded its Meeting
Planner Bonus Program to encompass all corporate and most franchise
properties. However, says Stevens, just three percent of the
meetings booked at Hilton hotels involve the company's point
program for meeting planners. "We have to match what our
competitors are doing and keep things at parity. Sometimes the
competing hotels in a given destination are so alike that mileage
points can be a deciding factor."
That was indeed the experience for a sales manager with a hotel
company that does not have a point program. "I recently lost a
good-size piece of business to a competitor because we don't offer
points for meetings," he remarks. "I don't like point programs
personally, but I'd certainly use them to close deals if I
GIFTS UNDER SCRUTINY
But while programs with booking incentives are growing, so are the
numbers of companies and associations that are placing tight limits
on the gifts or perks that employees can accept from vendors.
"Conflict of interest is a huge concern right now, the interests of
the individual versus those of the corporation," says Dr. William
Brown, president of the Ethics Institute in Sterling, Va., who
helps corporations form ethics policies. "Ethics codes are now
moving from the theoretical to the specific and, as a result, gifts
and perks are coming under scrutiny."
Michael Daigneault, president of the Ethics Resource Center in
Washington, D.C., and a former association meeting planner, agrees
organizations are increasingly worried about conflict of interest
questions surrounding perks and gifts. And he believes point
programs for meetings should be no exception.
"Whether it's frequent flyer miles or cash, anything that is
intended to influence the conduct of the receiver is a bribe," he
says. "If you book a hotel because you're getting frequent flyer
miles, you're in a definite conflict of interest situation."
For many organizations, avoiding the appearance of impropriety
is equally important. "Even if companies don't believe that it's
wrong for employees to accept perks or that the practice influences
business decisions, they are concerned with how it looks to the
outside world," says Brown. "Organizations don't want to be
perceived as being ethically slipshod, so they're doing what they
can to prevent it."
Some meeting planners also are sensitive to how participation in
point programs might be perceived by co-workers, even if their
companies don't prohibit them from reaping the rewards. "My company
doesn't have a policy on accepting non-monetary perks, but we have
our own policy within the meetings department not to accept them,"
says Susan Thompson, corporate meeting planner for McKesson Corp.,
a health-care products supplier based in San Francisco. "While I
know that accepting points wouldn't influence my decision, I also
know that it would raise some eyebrows within the company. I don't
While Thompson is concerned over perception among co-workers,
Tony Pastor, New York City-based site and contract specialist for
McKinsey & Company, a management consulting firm, says he is
troubled by the negative light point programs may be casting over
the entire meetings industry. "In this industry, which has a
history of abuses, the last thing we need is a partner putting out
a system that is so easily misused," he says.
While Pastor has no problem with frequent guest programs where
the person actually staying in the hotel receives points, he "takes
great offense" at hotels that offer points for booking meetings and
even avoids doing business with them at all. "When I see brochures
that say 'now you can earn personal rewards for making a business
decision,' I find that very offensive."
He acknowledges, however, that hotels are not entirely to blame.
"If point programs do work, then part of the problem lies within
the planner community."
On the other hand, Peter Rosenstein, executive director of the
National Association for Gifted Children in Washington, D.C., has
no qualms about accepting frequent flyer miles from hotels when
booking meetings, particularly since he often uses the miles for
business trips made on behalf of the organization. "What I consider
important is not the fact that I'm accepting miles, but that I
don't base my decisions on them," he says. "That's where the
question of ethics comes in."
But Rosenstein does believe that organizations, particularly
those that book a high volume of hotel rooms, should develop
policies on how planner incentives are handled. "It's not a big
issue for my association because we don't have many meetings, but I
can see where points would be very valuable to those who sign
dozens of hotel contracts a year," he says. "I think associations
have to make a conscious decision about whether these points go to
the individual or back to the association -- there could be a lot
at stake."MAKE YOUR OWN
Is it always unethical to
accept frequent flyer miles or other travel benefits as a reward
for booking a meeting? Ethics experts say a lot depends on how the
situation is handled. Here are a few guidelines for ensuring that a
perk does not become a bribe.
Make an internal decision about how you feel about
booking incentives, and be consistent in your actions.Never accept anything under the table. If you work for a
corporation or association, let your supervisor or board members
know what is being offered. If you're an independent planner, let
your clients know.When hotel or mileage points are transferable, let your
organization use them to defray such business costs as transporting
a guest speaker or staff member to the meeting, or donate the
points to charity.If you do accept points for personal use, take an honest
look at whether or not that influenced your booking decision. *
While point programs are roundly denounced by some planners, others
believe the difference between a perk and a bribe has largely to do
with how the individual handles the situation. For some, it's a
matter of being completely open about what you're doing and making
sure all parties with a vested interest know about any booking
incentives that have been accepted.
"I don't see anything wrong with planners accepting incentives,
but it is wrong if you hide what you're doing," says Pennington.
"The key is to be honest about it."
He believes that corporate and association planners should
always keep their organizations informed about any perks on the
table. And while independent planners have more flexibility in
accepting booking incentives than corporate or association
planners, Pennington believes they have a moral obligation to
disclose any such information to their clients.
"When you're getting a fee from a client and an incentive from a
hotel at the same time, that's double dipping," he says. "What I
would do in that case is tell the client, 'Look, I'm getting such
and such for booking this hotel, but because of that I'll reduce
Michael Burns, director of account management for Conferon, a
meeting planning company based in Twinsburg, Ohio, feels strongly
that any points received by planners should clearly be stated in
all hotel contracts, but says this is rarely the case. "The fact
that hotel companies do not disclose the point awards in their
contracts makes this a bribe and encourages secrecy," he says.
"What typically happens is the hotel sends a private contract to
the meeting planner after the meeting is booked that lets them know
what they've earned for booking the meeting. The hotels say this is
okay because it went out after the fact, but, of course, what it
does is entice the planner to keep on booking because of the point
FOR THE GREATER GOOD
While disclosure can mean the difference between a perk or a bribe,
so can the way in which booking incentives are used. Even the most
steadfast opponents of point programs believe donating points to
charity or transferring them to the organization for business use
makes them tolerable.
"While I don't think it's fair to use the points for private
gain, I'm a lot more comfortable with them if they can be
transferred back to the association and used for staff travel or in
a drawing for members," says Burns. "The points rightly belong to
the organization and, especially in the case of an association on a
tight budget, I can see where they could be a real help in
defraying travel costs."
Adds Daigneault of the Ethics Resource Center, points
transferred to the organization are less likely to influence a
planner's decision. However, that doesn't necessarily ensure an
entirely ethical situation, he says. "The question then arises if
it's possible to bribe an institution -- and the answer is
Complicating the issue is the fact that not all points are
transferable. For instance, while Hyatt's point program has
recently been modified to allow the awards to be transferred or
even donated to charity, Hilton's program allows only the planner
enrolled in the program to claim the awards.
Transferable or not, McKinsey & Company's Pastor believes
point plans are targeting individuals, not organizations. "Although
the points can be used for business purposes, I don't think the
hotels intend them as such," he says. "They're promoted as a
personal perk, a way to get a free trip."
Pastor even questions the desirability of the travel benefits
awarded by point programs. "Most hotels are glad to accommodate you
for a site inspection -- without booking a meeting," he notes. "We
all have opportunities to travel for legitimate business reasons.
There's no need to get free miles or room points for business
APPLES TO APPLES?
While all can be considered sales tools, hoteliers, planners and
ethics experts tend to agree that point programs have different
ethical connotations than site inspections and business
entertainment. Elizabeth Erickson, vice president of group sales
for Fairmont Hotel Management L.P. in Chicago, believes there's
nothing wrong with rolling out the red carpet during a site
inspection or taking a client to dinner, but she has doubts about
the integrity of offering frequent flyer miles as a booking
"If I take someone to dinner or to a ball game, that's
relationship building," she says. "But point awards are not about
relationships, they're about putting the customer in an awkward
situation where he's tempted to choose a hotel because of
Daigneault agrees that the relationship element is a
distinguishing factor. "If a hotel sales manager takes a planner
out for a social event, it's a sales evening," he says. "But if the
sales manager just gives the planner the tickets, it's a
He also sees a difference between point programs and site
inspections. "Site inspections are an educational tool, not a gift
or perk," he says. "Of course, if you take one to a place where
you'd never book a meeting, that's not ethical, either."
While Rosenstein acknowledges the difference between business
entertainment and point awards, he also says the difference is
blurry at times. "Frankly, I don't see why it's worse for a hotel
to offer frequent flyer points than a lavish two-bedroom suite
during a site inspection," he says. "In each case, you have to
decide for yourself what's right to accept." *YOURS FOR THE
Despite the seller's
market and growing awareness of business ethics, point programs and
other booking incentives aimed at planners aren't going away. If
anything, they're growing in number and sophistication.
Regal Hotels International cuts right to
the chase with its Regal Dividends program, extended through Dec.
30, 1998. Planners earn everything from jewelry and china to exotic
vacations, based on the volume of meetings they book. A meeting
generating $200,000 qualifies the planner for a $10,000 travel
certificate; $100,000 to $199,000 in revenues generated earns the
planner a $5,000 certificate, and $50,000 to $99,000 buys a $2,500
certificate. Merchandise awards, for bookings worth $5,000 to
$99,000, include gold watches, diamond bracelets, a crystal bar
service and more.
Hyatt, Hilton and Marriott dole out points for meetings.
Hilton offers a Meeting Planner Bonus Program that
lets participants earn 5,000 frequent flyer miles on a wide choice
of airlines for every meeting booked at a Hilton property. If they
prefer, participants can instead earn HHonors points redeemable for
free stays at Hilton properties; a two-night meeting earns up to
24,000 points, enough for a free weekend night at many Hiltons.
Points are nontransferable.
Hyatt recently doubled the earnings in
its Hyatt Meeting Dividends program, enabling participants to earn
up to 50,000 Gold Passport points per meeting or enough for five
free nights at Hyatt properties. Frequent flyer miles (5,000 per
meeting) also are an option. Along with awarding points based on
room nights, the program also doles out points for catering
charges. All points are transferable, and participants may choose
to make a charitable donation in lieu of receiving
Marriott also offers a point program to
planners but declined to comment or provide information about it
when contacted by M&C. "It exists, but we don't
promote it," said Beth Viero, spokesperson for Marriott
Inter-Continental, which recently
offered frequent flyer miles for winter meetings booked at its
hotels in Chicago, New York City and Washington, D.C., plans to
roll out a new program this spring called Meetings Options that
will include all of its properties in the Americas. When a meeting
is booked at an Inter-Continental hotel, the planner will be
allowed to select from a menu that includes frequent flyer points
as well as complimentary meeting components, such as receptions and
group airport transfers.
Doubletree Hotels is offering a Ticket
to Success program through the end of this month that lets planners
earn free airline tickets on American, United or Alaska when
booking room nights at participating hotels. With 50 rooms booked,
planners receive one ticket; with 100 rooms, they receive two. (As
of press time, the chain had not announced plans to continue the
Hotel companies aren't the only ones putting incentives
on the table. The St. Paul Convention & Visitors
Bureau introduced the St. Paul Meeting Miles program in
1996. Scheduled to expire this month, the program has been extended
through March 31, 2000. Planners who book meetings in St. Paul
receive WorldPerks Miles on Northwest and KLM based on the number
of room nights booked. Awards range from 3,000 miles for every 25
to 50 room nights, to 25,000 miles for more than 500 room
New from Switzerland Tourism, the
country's national tourism organization, is the Switzerland
Conference and Incentive Club. Described as a destination loyalty
program for planners, it offers club members a range of benefits,
including mileage points on Swissair and Delta for every room night
booked in Switzerland. * M.L.
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