Moving a Meeting

Moving Online

A number of companies and associations that have canceled in-person meetings are using virtual alternatives to provide education and networking opportunities.

One such group is the American Society of Newspaper Editors, which this year canceled its annual convention (scheduled for April at the Fairmont Chicago) for only the second time since World War II and instead promised to hold a series of hour-long webcasts throughout the year.

The switch was made in anticipation of low turnout in Chicago, says Scott Bosley, executive director of ASNE. The move will be costly to the association, he admits, because the convention is a significant source of revenue, and web­casts will be complimentary for ASNE members. In addition, the group owes the hotel a cancellation penalty, which Bosley is trying to negotiate down. One difficulty is that ASNE doesn't hold any other large meetings, so offering replacement bookings isn't possible, at least not within the time frame acceptable to the hotel, he explains.

"This won't lead us away from having a convention again," Bosley notes, adding that plans are on for the 2010 event. Meanwhile, he says, building an increased web presence has become part of the association's permanent mission. -- T.I.

Along with outright cancellations, the number of relocated meetings has spiked this year. According to a recent M&C survey ("Pressured to Cancel," April), 40 percent of planner respondents have changed venues, cities or both for scheduled meetings simply "to appear more frugal." And this doesn't take into account those who have moved meetings for other reasons. In some cases, new projects have been halted, displacing meetings booked in the preopening phase. Corporate groups have moved to save money or avoid unwanted publicity. And with associations facing dwindling attendance, some are shifting to smaller, more cost-effective venues.

"We've certainly seen a fairly significant degree of movement specifically related to perception issues more than anything else," says Mark Sergot, vice president of global sales for Fairmont Hotels & Resorts.

Sergot estimates he's received as many as 10 phone calls in the past several months that sound like the one he got in March: A law firm, which was six weeks away from holding a three-night, 500-person meeting at one of Fairmont's Mexican resorts, wanted to move to an urban hotel because "they didn't want partners to be subjected to unnecessary criticism" as had become de rigueur for corporate meetings at posh golf resorts, he says.

Sergot negotiated a deal for the group to relocate to the Fairmont Chicago. In return for a much smaller cancellation fee than was written into the contract, the group agreed to book the next year's annual meeting at the Mexican resort, along with several regional meetings throughout the rest of 2009. Sergot says the regional meetings won't make up for the lost business entirely, but they will give the property "financial relief in the short term."

He adds, "The most important thing, not only for hotel salespeople but planners, too, is to keep an open mind and approach it as an opportunity to solve a problem with a comprehensive approach. The times we are in are so unusual, people need to rally around and do what's right for everybody."

Planners and hoteliers who have been on either side of transplanted meetings say the process tests their negotiation and communication skills, as well as time- and risk-management abilities. And many planners admit the experience has led them to reconsider how they plan for any meeting.

Renovation delays
As executive director of the Southeastern Commission for the Study of Religion, Dr. Conrad Ostwalt (also chair of the Department of Philosophy and Religion at Appalachian State University in Boone, N.C.) was responsible for organizing SECSOR's 2009 annual meeting, held in March for 300 people.

On a Friday morning in late February, two weeks before the conference, Ostwalt received a call from Wes Collins, the sales director at his meeting venue, the Sheraton Chapel Hill Hotel, informing him that the hotel's renovation had been delayed, and the property no longer could accommodate the group. But Collins already had identified an alternate venue, another Sheraton, that had space and had agreed to honor Ostwalt's original contract. On its face, the new Sheraton was an upgrade. Ostwalt's group never could have afforded the hotel under normal circumstances.

There was just one small problem. "We had to move cities," Ostwalt recalls. The new facility, the Sheraton Greensboro Hotel at Four Seasons, was about an hour's drive from Chapel Hill and even further from Raleigh-Durham International Airport, where some attendees were due to arrive. "I didn't know how it would affect attendance," Ostwalt says. "I pictured people backing out en masse."

Ostwalt estimates his group incurred $1,000 to $1,200 in unplanned ground transportation costs to shuttle attendees to Greensboro ­-- the Sheraton Chapel Hill offered to pay $500 -- but otherwise the conference was not adversely affected by the move. "To their credit, they found a hotel and did some of the legwork," Ostwalt says of Collins and his team. "They didn't abandon me." But he describes the last-minute move as "unconscionable" and believes the hotel should have covered all of his extra expenses.

For his part, Collins claims the hotel notified Ostwalt within 24 hours of learning of the delay, which was related to a stalled supply shipment to a subcontractor. And even then, there was internal disagreement about whether the Sheraton Chapel Hill could host the group. "It was not a unanimous ‘no,' " Collins says. "We may have been able to keep the client here, but they would not have been happy. I made the decision to relocate them."
 

Contract review
Ostwalt's experience could have been worse. In his contract, he never addressed the possibility that the hotel would be unable to uphold its end of the deal. The sales team at the original Sheraton was under no obligation to help Ostwalt relocate or pay for any portion of the group's extra expenses, and if the Greensboro Sheraton hadn't honored Ostwalt's contracted rates, his group could have been on the hook for far more money. Worse, Ostwalt could have been on his own to relocate the entire meeting in 14 days.

Like many planners who have moved meetings due to uncontrollable circumstances, Ostwalt now says he wishes he'd had a clause in his contract that held the hotel responsible for extra expenses due to an involuntary move. Even Collins, who warns that it's impossible to enumerate every possible scenario in contracts, admits that "from a planner's perspective, I would have a clause" covering renovation delays.

Attorney Joshua L. Grimes, of Grimes Law Offices LLC in Philadelphia and Washington, D.C., which serves the association and hospitality industries, says all groups should have contract provisions that lay out how a hotel will compensate a group if the venue is unable to accommodate the meeting. And there are other strategies for dealing with the possibility of an economically motivated move.

For renovation delays, a "cancellation by hotel" clause mirrors the clause that holds groups responsible if they back out of a contract, Grimes explains. He advises planners to define exactly what services and physical spaces they require, so that if renovations haven't been completed -- if a restaurant or spa needed by the group is still under construction, for example, even if meeting space and guest rooms are finished -- the group won't be stuck without those amenities. Spelling out how a cancellation or relocation process will unfold and detailing remedies for damages suffered by either party is preferable to relying on tacit understandings about how the situation will be handled, Grimes argues.

When a group initiates the move, that generally is considered "cancellation for convenience" or "cancellation without cause," Grimes explains, and groups must pay cancellation fees unless hotels agree to alternate arrangements. However, he says, some of his clients have successfully negotiated "excuse of performance" clauses, which specify when groups can back out of contracts. Grimes says it's possible to negotiate such a provision if a precipitous drop in the economy makes the meeting inadvisable. He explains, "That works in two situations: when you have a very good piece of business and are a regular customer with a lot of history, or if you're a good piece of business meeting in an off time."

Grimes adds that religious groups sometimes negotiate a "morals clause," which stipulates if something unexpected happens in the destination that offends the morals of the group, the meeting will be allowed to move with limited or no penalty.

Excuse of performances clauses are tough to negotiate, Grimes admits, and hotels always want "out clauses" to be mutual decisions, but compromises can be reached.

In general, Grimes advises planners to envision circumstances under which their groups will want or need to back out of their contracts, and address those issues in writing. If a group needs fast Internet, for instance, and discovers slow connections upon arrival, a clause covering technical specifications could help the group relocate without paying the hotel cancellation fees. Problems arise when planners and venues want to change the rules of the game after contracts have been signed. "Just expecting a hotel to say, ‘OK, the contract says you have to pay 100 percent damages, but now we'll write that off because you asked us,' is not realistic in today's economy," Grimes says.

The kindness of hotels
Most hotel salespeople, like Fairmont's Mark Sergot, will help groups relocate regardless of what's in the contract ­-- and, in many cases, regardless of why the meeting needs to be moved. They simply view long-term relationships with clients as too important to jeopardize.

Cory Chambers was the director of sales and marketing at the New Orleans Marriott on Canal Street when Hurricane Katrina wiped out 40 percent of the hotel's future booked meetings in 2005. The next year, planners for a group scheduled to host a 2009 citywide meeting at the Marriott told Chambers they wanted to move because they thought the meeting could be more successful financially elsewhere, even if they had to pay the Marriott a cancellation fee, which was nominal because the meeting was still three years away.

"It was a bitter pill to swallow," Chambers says, and initially, talks were contentious. But Chambers helped the group land at a Marriott in Atlanta, which had the same owner as the New Orleans hotel. "We kept Marriott whole," he says. Now, as director of sales and marketing for the JW Marriott Indianapolis, set to open in 2011, Chambers says that group might book with him again, thanks to way he handled things in New Orleans.

This past February, the Society of Petroleum Engineers implemented a new strategy to place meetings close to major petroleum operations to reduce or eliminate travel costs for attendees. In the process, some scheduled meetings had to be relocated, according to Stephen Graham, a Richardson, Texas-based managing director for the international association. Graham says because SPE runs so many meetings, "we have good relationships with many hotel companies, who give us a little more flexibility." In some cases, SPE verbally agreed to book future dates at properties the firm was abandoning and avoided paying cancellation fees as stipulated in its contracts.

But as hotels suffer in a down economy, some will be more aggressive about protecting and collecting cancellation fees. Case in point: In January, Stacy Weber, event and meeting manager for Seattle-based Moss Adams LLP, an accounting and consulting firm, received word from a hotel in Southern California (which she declined to identify) notifying her of renovation delays and asking that she move her five-day, 300-room-night meeting from July to August. Weber, who had a renovation clause in her contract, could have walked away and forced the hotel to pay relocation costs. But she decided to accommodate the property and rebook.

Within weeks of signing her new contract, however, the economy declined further, and the size of Weber's program shrank to half of what she had projected. She thus faced likely attrition penalties of $45,000 or a cancellation fee of $90,000. The hotel was unbending. "They basically said, ‘This is the contract; deal with it,' " Weber recalls. "I was getting nowhere."

Weber sought help from Venture2 Hospitality Services, the Seattle-based conference management company she had used for site selection. "They got the hotel to say if we hold the meeting as planned in August, they will waive attrition. But if we cancel and postpone until the summer of 2010, we still owe $90,000," Weber says. To avoid the cancellation fee, the group will go ahead with the August meeting, she notes -- far from an ideal outcome for Moss Adams but unavoidable, in Weber's opinion. "It's truly a victim of the economy," she says.

Lessons learned
Reassess. Any relocation situation is an opportunity for planners to re-examine the scale of the meeting. Had Weber sensed the weakness of the economy, she could have reduced her room block and cut back on F&B commitments in her second contract. Ostwalt negotiated with his new hotel to waive attrition penalties when missing guarantees became more likely because of the relocation. The National Business Aviation Association, by incorporating the first annual Light Business Airplane Conference -- originally scheduled for San Diego last April -- into the association's annual meeting this fall in Orlando, adapted to new market conditions, which could support only a scaled-down version of the event.

Communicate. The key to a smooth transplant is timely and honest dialogue. "The second anyone knows something is in jeopardy, you have to communicate," Chambers says. Be up front about the situation and what contingencies are possible, he adds. In the case of renovations or new construction, planners should request frequent progress reports.

The Longaberger Co., a basket and home accessories firm based in Newark, Ohio, faced a different communications crisis in January 2008 when a water-main break flooded parts of the Greater Columbus Convention Center, just before the company was set to launch its 1,200-person Longaberger Leadership Meeting for top consultants. Initial news reports erroneously speculated that the building could collapse, and Tom Matthews, a spokesperson for Longaberger, had to reassure attendees that the meeting was still on, even before planners found an alternate venue. He sent out e-mail blasts and posted updates online, handed out flyers to hotel front desks for guests checking in and trotted out in front of news cameras to spread the word on TV. Matthews did the same when planners decided that only a few sessions needed to be moved and the rest could remain at the convention center.

Lighten up. The flooding did cause damage to merchandise, displays and other materials that Longaberger had loaded into the convention center. The experience led Michelle Burckhard, the company's director of events, to reduce how much material she brought to future meetings. Now, she finds herself saying "Maybe we don't need it" more often. "And we never leave anything on the floor," she adds.

Keep it cool. "Stay calm and stay professional," Burckhard advises planners. "Everyone takes their cues from you. There's no sense talking about what's happened. We as planners need to look forward and think about how to pull this off." It's easier for planners to remain calm, she notes, when they can rely on strong relationships with suppliers in times of need.

Take note. Erika Powell, meeting planner for Global Knowledge, a Cary, N.C.-based provider of IT and business training courses all over the world, keeps a detailed history of her experiences at various hotels as a site-selection resource for future events. "We remember which facilities went above and beyond," she says. For example, Powell recorded positive comments last year about a hotel in Anaheim, Calif., that was accommodating to one of her groups after she was forced to move from her original hotel due to Internet problems.

Be fair. Few people speak about relocated meetings as win-win situations, because typically neither party gets exactly what they want. Concise contracts can help, but "the key is in not having to resort to these formalities if there is any better way of resolving the situation," says Edgar Hirt, president of the International Association of Congress Centres and managing director of the Congress Center Hamburg in Germany. "The easiest solution is to rebook the event in another time slot, if possible, sometimes accompanied by incentives that make it worthwhile for the client."

In the end, Hirt adds, "the best measure of performance is if everyone feels they have been dealt with fairly, and [venues] are seen to have gone the extra mile to help out the client."