Are hotel F&B costs increasing as well?
As hotel room rates have rebounded in the past
year or so, planners are finding their budgets just won’t cover
everything they once did. To learn how the firming of rates is
impacting meetings and negotiations with hotels, M&C
conducted an online survey of 149 planners in April. Almost all of
the respondents (93 percent) reported they are seeing rates rise;
the average increase is about $16 per night in recent months,
representing a fairly significant change.
Most meeting planners (70 percent) said they are
able to negotiate better hotel room rates only “some of the time.”
And, as more and more people travel and fewer rooms are available,
the majority of planners (62 percent) said it has become harder to
find available room blocks.
According to the survey, this is good news for lower-tier
cities, as three in five planners (60 percent) said they have begun
to choose such destinations some of the time, where the room rates
are not as high. Additionally, about half of those polled (45
percent) said they have begun to choose lower-quality hotels for
the same reason.
It is not surprising, therefore, to learn that 91
percent of planners said they are losing negotiating leverage as
room rates rise and room blocks shrink. To offset rising rates,
planners said they are choosing less expensive food and beverage
items (62 percent), holding shorter meetings (37 percent) and
paring down or eliminating coffee breaks (34 percent).
Another 28 percent of the respondents said they are planning
fewer meal functions, and 26 percent said they have reduced or
eliminated in-room gifts. Fourteen percent said they are having
attendees share rooms.
Art Pfenning is director of M&C Research