With occupancy low and rooms to fill, hotels and conference centers are getting very creative in luring group business. Attention getters range from "name your price" promotions to discounts that dip lower if the Dow nosedives.
Following is a look at some of the boldest offers out there -- and whether they're actually translating to more business on the books.
Name your price
One of the more eye-opening recent promotions was the Chicago-based Summit Executive Centre's "Pay What You Think" program, which ran for the month of March. According to managing director Louise A. Silberman, CMM, the venue received numerous phone calls from shocked clients.
"They would say things like, 'I can't believe you're doing this, what a clever idea!" and "I wish I had a March meeting to book. Can I name my own rate for a meeting in April, May, June?' " recalls Silberman. Ultimately, the offer has been more successful in creating dialogue than actually generating business. "That kind of success is hard to measure, but it's priceless," Silberman notes.
Interestingly, not everyone who phoned in took advantage of the offer. One of the facility's repeat clients, for example, was happy with the standard group rate but enthused about the idea of naming a price. "I took it as a compliment, a tribute to the strong working relationship we have with the client," Silberman says. "I have always been fair, sometimes to the peril of good business. But in the long run, I feel it always pays off."
The venue did land some business that month thanks to the promotion, albeit at a lower profit margin. Prices named by clients ranged from $62 to $137 person, with an average price of around $75. Because the standard rate is $179, that amounted to a 58 percent discount. "We did not have to turn anyone down," she explains. "They were all respectful offers." Occupancy increased about 15 percent during the month of March, though the numbers remained rather "dismal," Silberman says. Moreover, at least five planners booked events during the months following the program. "They said they called because they remembered the creativity of the promotion. It was definitely beneficial from a PR standpoint."
Silberman is considering running the deal again, but not until next year. "I would not want to dilute the value of our normal full-day package rate," she says.
Top service, guaranteed
Worried about service levels? The Broadmoor resort in Colorado Springs, Colo., has done away with that concern. As of mid-March, the property guarantees that groups will experience "superior value in service, facilities and quality" or the entire master account will be waived.
"We're trying to highlight how we're running our business differently," says John Washko, the Broadmoor's vice president of sales and marketing. At other properties, he says, "discounts might not guarantee value, because it might mean less staff. We've actually increased our staff training, and we continue to do infrastructure and normal maintenance on the property."
The promise appears to be paying off. Several proposals have gone out after just two weeks following its launch, and The Broadmoor has been asked to bid on a few programs as a direct result of the guarantee, says Washko.
Following the Dow
A few hotels have used the precarious state of the financial world as their inspiration for creative marketing tactics. At the Hamilton Park Hotel & Conference Center in Florham Park, N.J., the team's solution was to let the ups and downs of the economy, quantified by the Dow Jones Industrial Average, determine the savings given to planners. The hotel sent out yo-yos to prospective clients as a marketing tool, calling it "Your answer to the ups and downs of planning a meeting."
"We were trying to look at some type of formula: If things get better, this happens, and if things get worse, this happens. What better barometer than the Dow?" explains Steve Migliara, the hotel's director of sales and marketing.
Here's how it works: Depending on where the Dow closes on the last day of the meeting, planners receive discounts of up to 30 percent off the master account. Given the Dow's poor performance throughout the months of February and March -- which hotel managers had not entirely anticipated -- savings to planners hovered around that mark.
Planners have been pleased with the offer, and the hotel has decided to extend it to Aug. 8. Migliara characterizes the amount of business from the promotion as "substantial" and says Hamilton Park has forged new relationships with possible future clients as a result. "We believe it will come back to us tenfold," he says.
In a similar move, the Warwick Denver Hotel devised a promotional package for meetings up until April 30 of this year, with discounts pegged to the percentage decline of the Dow the day prior to the meeting. If the Dow made positive gains, the hotel threw in complimentary morning and afternoon refreshment breaks. The promotion helped put two new groups on the books, which saved 11 percent and 13.7 percent, respectively, on their total food and beverage costs. However, what was more popular, according to hotel general manager Scott Ostrander, was a separate meeting package not linked to the Dow that gave planners a choice of various discounts in addition to a 5 percent credit towards a booking consumed by December 2010, for every $5,000 spent.
Whatever the creative offer, bottom-line cost is the ultimate deciding factor for many meeting planners. "I have not booked business because of a specific incentive, but I've chosen one venue over another because of a better overall financial package, with discounts and lower room rates," says Erin Tench, CMM, CMP, president of Washington, D.C.-based Hyland Events.
Tami Gilbertson, CMP, president-elect of Meeting Professionals International's Wisconsin chapter, and manager of events and promotions for Madison, Wis.-based WPS Health Insurance agrees. "I look for incentives with value that can be tracked on a spreadsheet, which I use to report back to our executives and demonstrate the cost savings." Value presented in a tangible form helps her employers understand exactly how she was able to negotiate the savings, thereby justifying the meeting as well as demonstrating her negotiating skills.
But when a meeting is on shaky ground, attrition relief becomes more important. Notes Karen Waggoner, CMP, executive director of the Hawaii Writers Conference, "It reduces the risk and potential liability in these economic times. It may be the difference in deciding to hold the meeting at all." -- K.H.