August 01, 1998
Meetings & Conventions: Planner's Portfolio August 1998 Current Issue

Association Strategies


In Search of a Reasonable Hotel Block

Nine things planners should know about room rates

Recently, our association's board considered a motion to pay for meeting space at our national bridge tournaments as a means to reduce our guest room rates. These tournaments last 10 days and generally attract an older crowd, some retired and on limited income, so our volunteer board knows that value/discounted room rates are a key factor in luring attendees. While helping out our players this way sounded good, the board didn't understand that paying for meeting space doesn't necessarily mean lower room rates. But that is not to say association planners can't get good rates. Here are nine ways to improve the odds of cutting a favorable deal.

1. Consider off-season or holiday dates. In some cities, rates are lower in the sweltering summer months - and priced out of sight in January when the snowbirds come to soak up winter warmth. Also, many associations hold their annual conventions in September and October; demand drives prices up during these peak months. Find out when crush time is for the destination you're considering before you choose a date. Also, meeting over a holiday when other groups are staying home can bring room rates down. I'm not just talking about Christmas - value dates can be found on President's Day and other lesser holidays.

2. Stay the weekend. Transient business from individual travelers is plentiful during the week, so rates are generally higher for a midweek meeting than for one held Friday through Monday.

3. Don't assume big groups get the best breaks. In wholesale purchasing, the more you buy, the lower the price. That's not always the case with meetings. If a hotel typically runs 65 percent occupancy, it has 35 percent of its rooms leftover. Many methods are used to sell those rooms - like weekend specials. Luckily for groups, hotels often are willing to sell those "extra" rooms at lower rates to bring up their occupancy. So in some cases, the fewer rooms you need, the lower the rate. For short-term planning, if the hotel has wide-open dates, larger blocks may be more attractive.

4. Consider everything you'll be spending. A hotel may reduce the room rates if the group generates a high volume of catering business, for instance. The price can drop in resorts and casinos if the guests have a designated amount of free time to use other services. Also, don't forget the "in conjunction with" business generated by your exhibitors, which adds to a group's catering volume and can lower room rates even further.

5. Build loyalties. Repeat business with a hotel or chain can lead to better deals. Work with the national sales manager to determine the long-term value of your business and arrange multiyear agreements.

6. Be wary of planning too far out. Booking group business three or more years in advance may increase the room rate, because hotels are removing their inventory (rooms) from the shelves at a set price, taking the risk that they won't find a more profitable piece of business for those dates. By buying the business closer in, a planner might be able to reduce the rate, since the hotel will have a shorter time frame in which to sell those rooms. The downside: You are taking on increased risk, since fewer appropriate sites will have space available.

7. Limit your concessions and comps. The fewer complimentary and discounted rooms your association uses, the lower your rate is likely to be.

8. Rethink your meeting space needs. If your group's room block is small but meeting space needs are extensive, room rates may be higher, and you'll probably be charged for the meeting space. If a hotel regularly gets local business during the time of the meeting - say wedding receptions on June weekends - you may be able to reduce room rates by not using the prime ballroom. The rate also might be lower if you book the hotel's maximum block (as high as 90 percent of rooms but more likely 70 to 80 percent), and the meeting space will probably be free.

9. Be reasonable. A hotel's cost of doing business requires it achieve an average daily rate (ADR). Put simply, for every room that is sold at $100, the hotel must sell two at $175 to reach an ADR of $150. Also, large convention hotels, by their size and location alone, must demand higher rates than roadside hotels on less prime real estate.

Nancy W. Foy, CMP, is the director of meeting services for the Memphis, Tenn.-based American Contract Bridge League.

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