Too little, too late:
Christina Condos of
Questex Media Group
has experienced the tense,
last-minute scramble for housing.
A few weeks before the AIIM On
Demand Conference & Exposition, show organizer Christina Condos
realized she needed an additional 1,000 hotel rooms. That kind of
news isn’t always a crisis, except that Philadelphia, where the
event would be held, was encroaching on full occupancy over those
dates. Ironically, Condos’ company had decreased the block by 1,300
rooms just months before, fearing massive attrition penalties.
“There was a concern that there would be too many rooms,”
explains Condos, group director for technology events at Questex
Media Group in Newton, Mass. “Then we made a major push for people
to book their rooms and realized we might not have enough.”
In today’s booming hospitality climate, finding enough hotel
rooms for meetings in top-tier cities has become increasingly
difficult, especially as meeting attendance begins to return to
pre-2000 levels. To make matters worse, attrition fears routinely
cause planners to play it safe and “underblock.” In other words,
they set aside too few rooms, making a last-minute scramble almost
inevitable.
Multiple factors contributed to the room shortage at the AIIM
On Demand show, geared toward the digital printing and enterprise
content management industries. First, because this year was the
show’s first in Philadelphia after a long run in New York City,
Condos’ predecessor had blocked a conservative 2,400 rooms, rather
than the 3,700 booked in years past. Second, it was difficult to
gauge how many exhibitors would need hotel rooms in the new city.
Attendees had been good about registering in advance, but
exhibitors often were unpredictable about how many hotel rooms they
would need and whether they would book within the block. Third, the
show took place in May, a prime month for both conferences and
leisure travelers, making it a tight squeeze in the first
place.
When the room shortage became evident, the Philadelphia
Convention and Visitors Bureau worked with Condos to call just
about every hotel in the city, searching for empty rooms over those
dates. They eventually scrounged up the needed rooms, a dozen at a
time.
“The city went all out for us,” says a relieved Condos. “We
were able to satisfy most of the people who needed rooms.”
Some attendees ended up as far away as the airport, and Condos’
staff did as much as they could, given no transportation budget, to
assuage their grievances. Some hotels offered to provide
transportation, though at most properties, attendees were on their
own.
Condos’ consolation is that next year, housing will run much
more smoothly. “We have a better understanding of what our needs
are, so we’ll be in much better shape for next year,” she says.
PAYING THE PRICE
For those who have been hit with attrition and lived to tell the tale, fears of repercussions from underblocking pale in comparison with those hefty penalties. Nancy Todd, right, manager of conference management and vendor relations for the Washington, D.C.-based American Chemical Society, has faced attrition bills numerous times. Each time, she has worked with her national hotel sales reps to lessen the charges.
Extenuating circumstances were to blame for the shortfall at ACS’ biannual meeting in New Orleans in spring 2003. The conference began on the first day of the Iraq War, and many companies would not allow their employees to travel. Attendance was down all around, but only one hotel charged Todd attrition. Todd cut it down to a manageable amount by booking an upcoming training meeting there.
In fact, the protocol of booking a future meeting at a hotel that charges attrition has become so common, says Todd, “It became funny. Some of the younger members of the staff, when asked, ‘Do you understand what attrition is?’ said, ‘That’s when you give them another meeting.’”
Todd still blocks conservatively, reserving only enough rooms to get the free meeting space. So far, it hasn’t presented any problems.
“The complaint we get from attendees is they can’t afford our hotel, rather than they can’t find a room,” she says. -- J.V.
Attrition fears backfire
“Meeting planners have become too conservative in their room
blocking, because of attrition factors,” states Michael Foster,
vice president of sales for Wyndham Jade, a third-party housing
provider based in Plano, Texas. However, recent fears about booking
around the block have given way to the opposite problem: too many
attendees booking within the block.
“Two years ago, you could get a room on Expedia at $70, where
the rate for a convention might be $100,” says Foster. “It’s a
level playing field now, because the hotels have guaranteed the
lowest rate.” That translates to a surge of attendees booking
inside the block, he adds.
It would be a boon if planners were expecting this reversal,
but instead, they underestimate their blocks and end up with
attendees who can’t find housing. “If they can’t get a room, they
might make a decision to skip the event,” says Foster.
If that happens, the planner is blamed, notes Jack Ferguson,
vice president of sales and marketing for the Philadelphia
Convention and Visitors Bureau. “When the attendee or exhibitor
calls the meeting planners and asks to get in,” says Ferguson,
“it’s hard for the planner to say, ‘I was covering myself; I was
concerned about attrition.’ So what? Attendees don’t care.”
Tina Stark, director of housing and registration sales at the
Housing Connection, a housing provider based in Salt Lake City,
agrees that for the past year to 18 months, “underblocking is the
name of the game.”
She adds, “Planners are being cautious because they’ve gotten
burned in another city, so they underblock. That creates another
problem. It took the attrition problem and turned it around.”
Stark recently worked with one meeting planner who underblocked
by 500 rooms to ensure that she wouldn’t have to pay attrition.
They found enough rooms at the last minute, but the situation could
have been disastrous.
“It can result in poor customer service, and your attendees are
going to be mad,” says Stark. “You have to hope that the hotel can
accommodate you at the last minute.”
It creates hassle for more than just the meeting-goer, Stark
adds. If the block doesn’t reflect the actual number of attendees,
the meeting’s value to the hotel ultimately proves less than its
potential, and planners could find it difficult to negotiate a low
room rate or book an appropriately sized block the next year. In
the case of a citywide, planners might not be able to receive the
full rebates contracted for when it comes to items like
transportation and convention center rental.
Of course, hotels are well aware of the situation. Fred Shea,
vice president of sales for Chicago-based Hyatt Hotels Corp., says
he has fielded an increasing number of calls from frantic planners
who can’t find enough rooms. “I have talked to a few groups that
are beginning to experience this, because they did exactly what was
recommended to them a couple of years ago.” However, Shea adds,
“it’s probably a better problem to have than the one we had two
years ago,” when attrition really was the issue.
At the Westin New York at Times Square, Karen Colliton Thomson,
director of sales and marketing, also has seen a rise in
underblocking, especially in the spring and fall, busy seasons for
New York City. As she puts it, “I don’t know whether it’s the
planner consciously saying, ‘I know I need 50 rooms, but I’m going
to tell them 40 so I won’t get hit on attrition,’ or if it’s, ‘I
thought I needed 40, but my program was so popular that I ended up
needing 10 more.’”
Thomson sees a number of potential consequences to
underestimating the room block, some palatable and others quite
worrisome. Ideally, she says, the hotel will have extra rooms and
be amenable to offering them at the convention rate or something
comparable. The hotel also might have rooms available, but the rate
might have gone up substantially from when the convention was
booked, or the only available rooms might be in a more expensive
room category.
In the case of the Westin New York at Times Square, meetings
booked three years ago, when the hotel was opening, often were
granted very low rates; when those meeting planners are looking for
extra rooms today, they might be paying an additional $100 per
room.
If no rooms are available, Thomson will call around to other
Starwood properties in Manhattan that might be willing to offer the
convention rate to overflow attendees. If those hotels are full,
her team will then begin to search for rooms starting
geographically outward from the hotel. “There have been times where
I’ve said, ‘Good news! I got you 20 rooms in Weehawken, N.J. Let me
introduce you to the New York Waterway” (ferry service).
Such scenarios can shock planners, but Thomson implores them
not to let it sour the meeting or the relationship. “It’s tough,
because up until this point we’ve been going along swimmingly with
the meeting planner,” she says. “But we are a profit-making
organization, and I’m not going to apologize for that. We’re not
the Little Sisters of the Poor.”
BATTLING BAD HABITS
With some citywides, the room crunch is not just a last-minute worry; rather, the housing situation is a tight squeeze from the beginning, and it takes a fight to maintain the integrity of the block. Ken Romeo, right, vice president of operations for Minneapolis-based Cygnus Expositions, has been grappling to find an adequate room supply for the Firehouse Expo, held each summer in Baltimore for more than 15,000 attendees.
“The city is in a sellout situation when we’re there,” says Romeo. “In addition to our block, there’s a lot of transient business in the city at that time of year.”
The problem is, attendees and exhibitors are too eager to get rooms. Many book their hotel stays before the room block is available and, unsure of where their co-workers will stay, sometimes they reserve rooms at multiple hotels or blocks of rooms for fellow firefighters. Some then book within the official block, too, to get a better rate. Then they cancel their superfluous rooms after the cutoff date for adjusting the block.
The result is chaos. When attendees want to book through the official housing provider (in this case, Wyndham Jade, based in Plano, Texas), it appears that the city is completely full, because of the double-booked rooms. When vacancies finally pop up, it’s too late.
Yet another problem: Before Cygnus began reserving a citywide housing block, travel agencies used to book their own blocks for attendees of the show. Some agents still do that, which competes with the block Romeo holds. “We’re dealing with historical patterns,” he says. “It’s a challenge to change that.”
Though very little can be done to stem attendees’ and travel agents’ pernicious habits, Romeo has fought to maintain the integrity of his block. In hotel contracts, he includes a “cancel and replace” clause, which allows the Firehouse Expo to redistribute rooms that are canceled at the last minute, rather than returning them to the hotel. This keeps late cancellations from starving the show of rooms.
Each year, Romeo surveys all attendees and exhibitors to find out where they stayed and uses the results to figure out which hotels to block in the future. -- J.V.
Full cities
Underblocking becomes most problematic when the city hosting your
meeting is full. Sometimes it becomes near-impossible to find even
one room.
Take the case of Rita DeCassia, incentives executive at H&A
America Corp. in New York City. She was planning an incentive
program with just 14 rooms, held in Chicago early this summer. She
kept up with the client’s changing wishes in terms of number of
rooms and dates, but at the last minute, one attendee wanted a room
for the day before the meeting. The hotel didn’t have an extra
room, so DeCassia started calling around to find one. As it turned
out, the city was chock-full due to a citywide convention in
town.
“I had to call about 35 hotels to look for an individual
reservation,” DeCassia recounts. The only room she could find
before giving up was at the Best Western near the airport.
Unfortunately, there’s no obvious lesson to be learned, except
to be extra-careful about managing the room block when a city will
likely be full.
“If you’re in Chicago in January, you might underblock. But if
you’re in prime locations at prime dates, you may want to trim it a
little bit but not as far,” explains Hyatt’s Fred Shea. “The bigger
problem is if the city is sold out. Then you’re losing attendees
because they can’t get a room.”
In cities such as New York City, San Diego and Washington,
D.C., Shea adds, it’s better not to underblock at all, or, if your
company cannot risk incurring attrition fees, consider avoiding
these cities entirely.
Hurricane Katrina has tightened up the slack even further.
About 30,000 hotel rooms were put out of commission, according to
Bjorn Hanson, a consultant with PricewaterhouseCoopers’ Hospitality
and Leisure practice. Until the Gulf Coast recovers, he says,
displaced meetings and other travel will make free rooms even more
scarce in core convention markets. Additionally, hotels in the
affected region that are still open must absorb the demand from the
closed hotels, not to mention emergency workers, volunteers and
evacuees. So the Gulf Coast will have very few rooms to spare, for
whatever meetings remain in the area.
“There was a great reduction in supply, and there may not be a
decrease at all in demand,” says Hanson.
Getting it right
The trouble planners are having with securing enough rooms
underscores just how difficult it is to estimate correctly the size
of the block.
For example, in 2001, the annual meeting of the Chicago-based
American Hospital Association, at the Manchester Grand Hyatt in San
Diego, saw a shortage of attendees. The association had just taken
over the meeting from an outside production company, and the
contract they were working with had overestimated the number of
attendees.
To avoid paying the resultant attrition bill, Bob Donovan, vice
president, meetings and travel services, and Kim Baker, director,
meetings and travel services, rebooked at that property for the
2005 meeting, held July 28 to 30. This time, however, they had
trouble finding enough rooms. Attendance rose a startling 30
percent, and combined with a citywide convention over those dates,
the hotel had run out of rooms.
“Within a short period of time, we looked at it from both ends
of the periscope,” says Donovan.
Donovan and Baker called up their national sales reps for the
surrounding hotels and eked out 60 rooms at each of three
properties, all close enough to avoid having to bring in buses.
VIPs who booked late were still ensured rooms at the Hyatt.
The planners didn’t hear any complaints from those attendees
who had to book at the other hotels. After all, they had registered
late.
For next year, Donovan and Baker have upped the block. Also,
the hotel provided them with a week-by-week booking summary for
comparing bookings before next year’s meeting.
However, the central lesson to be taken from this reversal,
according to Donovan, is that estimating the size of the block is
“still pretty much of a crapshoot.” But he agrees that, compared to
paying attrition fees, “while we struggled to get overflow hotels,
we think that’s less of a problem. It’s nicer to be scrambling for
hotel rooms than trying to beat up people to come.”
Donovan also thinks this experience will influence attendee
behavior. “I assume people will book earlier next year,” he
says.
Perfecting the block
The underblocking trend doesn’t have to spell disaster as long as
it’s monitored. Keep in mind the following to avoid an 11th-hour
debacle.
Scrutinize your history. Attendance nationwide is picking up,
according to Michael Foster, so don’t be afraid to increase the
size of your block. “We’ve had to add additional rooms in the
existing blocks for the majority of this year’s conventions,” he
says.
Be honest. “Be real frank about what your
needs are,” advises the Westin New York’s Karen Colliton Thomson.
“Say, ‘Here’s my deal, here’s my history,’ so we can block out
together what is intelligent, as opposed to playing the attrition
game. Because we want you to be right on the money as well.”
Know thy enemies. Ask the convention bureau
what conventions and festivals are in town over your meeting’s
dates, suggests Jack Ferguson. If you’re competing for rooms with a
citywide convention and major arts festival, know that the city
will be packed to the gills.
Weigh your options. Despite the dangers of
underblocking, paying attrition damages is almost universally
considered worse. John Foster, Esq., CHME, attorney and counselor
at law at Foster, Jensen & Gulley LLC in Atlanta, recommends
comparing the financial liability between having to pay attrition
vs. having to pay higher room rates or having to bus the
unfortunate attendees to the meeting hotel.
Wed housing and registration. If possible,
require attendees to book housing when they register. This not only
avoids attrition, it alerts planners to a tight housing situation
earlier in the process.
Contract for overflow. When contracting with
the hotel, ask an adjacent hotel to set aside overflow rooms; you
might even purchase some F&B to lower the rate. Don’t guarantee
these rooms unless you need them, but ask for the right of first
refusal, which means that if the hotel salespeople want to sell the
rooms from under you, you have the option of guaranteeing them
first. Also, says John Foster, if the hotel won’t offer an overflow
block without a sure commitment, that speaks volumes about how full
the hotel expects to be.
Guess right. Both underblocking and attrition
issues can be avoided entirely if you can estimate correctly how
many attendees will show up. “It takes good conversations from both
the buyer and seller and an honest approach,” says Leigh Wintz,
CAE, executive director of Soroptimist International of the
Americas, based in Philadelphia, and chair-elect of the
Chicago-based Professional Convention Management Association. “Make
your best guess, and talk about why you’ve put this number in the
contract.”
That said, Wintz underblocks by a little just to be safe. “Any
professional planner worth their salt underblocks,” she says. “For
me as a not-for-profit, I’m going to underblock because the idea of
paying attrition is terrible.
“If you as an attendee can’t get a room in the block, go to
Hotels.com and find someplace else to stay,” Wintz adds. And if
they still can’t find a room, she would respond, “Why didn’t you
book six months ago?”
Give fair warning. On the registration
website, warn attendees that reservations cannot be guaranteed
after the cutoff date, and that rates are likely to jump as the
convention dates near. If the block fills and rates go up, inform
registrants, “The convention rate has sold out, but we have rooms
available at a slightly higher rate.” The implicit suggestion that
it’s no one’s fault helps keep attendees from growing irate.
Maintain contact. Nightmares can be averted
through frequent contact with the hotel or convention bureau, says
Paul Rantilla, vice president of global sales for Quincy,
Mass.-based Passkey, a group reservations management system. Using
a system like Passkey will alert planners when rooms are running
short, before it’s too late to find more.
Act fast. Shea suggests watching pickup very
closely, paying attention to the pace of bookings. “You’d be
surprised how well these patterns hold up,” he says. If, week to
week, it’s varying a lot from previous years, check availability at
surrounding hotels, check prices on the Internet and adjust the
block if things are looking tight. “The sooner you address this
problem, the better off you are,” says Shea.
Be wary of attrition. When inflating the room
block right before the cutoff date, consider this scenario. A hotel
offers 50 extra rooms at the last minute to your group, though at a
higher rate. Your group uses only 40 of those rooms. Make sure up
front that the hotel will not charge you attrition based on the
higher rate. “One party to a contract can’t make the other party’s
performance more difficult and then insist on enforcing it,”
advises John Foster. “Going up on the rate may deter people from
staying there.”
Look last-minute. Since there’s no penalty for
canceling an individual reservation, attendees might book a year in
advance at two different properties, and pick one a few weeks
before the event, says Michael Foster of Wyndham Jade. For any
truly last-minute reservations, double-check with the hotels. Those
that were previously full might suddenly have a chunk of open
rooms.