Pharma-Friendly

Mike Aylmer, senior director of sales for KSL Resorts, launched a program to educate staff on the requirements of pharmaceutical meetings.

During the most recent economic downturn, when meetings business slowed to a crawl, the multibillion-dollar pharmaceutical meetings market remained a steady source of income for many hotels. Even as the economy has recovered, savvy hoteliers have realized the wisdom in attracting a share of that lucrative and robust sector.
    In an effort to draw the pharmaceutical market, Mike Aylmer, the Downingtown, Pa.-based senior director of pharmaceutical sales at La Quinta, Calif.-based KSL Resorts, spearheaded a series of roundtables with meeting planners from pharmaceutical companies. He questioned them about their gripes and wish lists regarding their experiences with hotels, and boy, did they have a lot to say.
    Some of their complaints were easily resolved. For example, they hated to arrive at the hotel and have to search for an implement for opening boxes. In response, Aylmer made it a policy to put box cutters, scissors and tape into the meetings office, a simple gesture many properties fail to do.
    Assuaging the planners’ real concerns, however, would require measures far more involved than stocking up on packing supplies. Meeting planners for pharmaceutical companies are subject to a number of forces that most other of their peers don’t face: appallingly short lead times, a need for airtight security and compliance with the PhRMA Code, a set of rules on spending developed in 2002 by the Washington, D.C.-based Pharmaceutical Research and Manufacturers of America.
    Aylmer understood that KSL would need to train nearly everyone at the resorts, from the salespeople to the directors of operations, in working with pharmaceutical meetings.
    “We felt if we showed we’re cognizant of their needs and we’ve trained our properties about what’s going on in the industry, then we’d be able to retain and perhaps grow our business,” Aylmer says.
    To develop a curriculum, Aylmer approached KSL’s training company, Rancho Santa Margarita, Calif.-based Master Connection Associates, which also works with a number of major chains and independent hotels. MCA created a two-day program one day for hotel operations and one for sales, catering and conference services. Even the executive staff would attend for a half day.  
    From April through October of last year, almost all the employees at KSL’s five resorts participated in the Pharmaceutical Expertise Program. Staff were told, for example, to charge individuals for spa services instead of putting the bills on the master account. They also learned which companies are competitors, a simple matter that would give them some important knowledge about this distinct segment of customers.
    Preliminary buzz suggests the program is working: The percentage of KSL’s group business coming from the pharmaceutical market jumped in 2005 from 20 to 25 percent.
    From a planner’s perspective, the resort chain has done a great job, claims Susan Morey, meeting planning and travel associate manager for Altana Pharma U.S., based in Florham Park, N.J. She brought a group of incentive winners to KSL’s Hotel del Coronado in San Diego last spring and was so pleased that she brought a sales meeting there in the fall, and she hopes to return next fall, as well.

PHARMA-PROFICIENT HOTELS

Here are a handful of hotels that handle a particularly high volume of pharma business, according to national sales representatives.



Trump International Sonesta Beach Resort Miami/Sunny Isles

Hiltons of Chicago

Hilton San Francisco

JW Marriott Orlando,
Grande Lakes

JW Marriott Starr Pass Resort,
Tucson, Ariz.

Loews Philadelphia

Loews Vanderbilt Hotel, Nashville

Sonestas of Miami

    Morey beams about KSL’s expertise. She needed 28 breakout rooms for the entire week, and the resort gave them to her without forcing anyone to meet in a converted guest room. They agreed to charge just $1 per bottle of water for her health-conscious attendees, instead of the usual $4. They knew to bring unused medicine samples back to the meeting office at the end of the day, and they were sensitive enough to ask if signage should include Altana’s name.
    “Part of it might simply be KSL and what they strive for,” says Morey, “but from a planner’s standpoint, they understand the urgency of getting it done and getting it done on time.
    “Other properties don’t have that same care,” Morey adds. “I think properties are starting to recognize the value of the pharmaceutical market. It makes my job a ton easier, and they deserve to be rewarded with repeat business.”

Hilton’s expertise
KSL is just one of a number of hotel chains trying to improve interactions with pharmaceutical meeting planners.
    “If hotels are unable to work within pharmaceutical companies’ guidelines, they’re going to lose the business,” notes Dick Zeller, vice president of consolidation business solutions for Maritz McGettigan in Philadelphia. “I think the hotels have done a very good job.”
    Last May, Beverly Hills, Calif.-based Hilton Hotels Corp. formed a pharmaceutical market team headed by Julie Hills, who has sold to the market for nearly 10 years. “We had feedback from numerous areas that we had a great opportunity to grow the market,” explains the Chicago-based Hills, senior director of pharmaceutical sales for Hilton Sales Worldwide. “Also, they had some specialized needs with regard to the pharmaceutical guidelines coming from the government.”
    Hills works with the procurement and sourcing teams for the major pharmaceutical companies, whose meetings usually have specific program needs and dates but a lot of flexibility in terms of the destination. When the national sales department receives a query, they do a quick check of Hiltons and pass the lead along to the best matches. The system was developed specifically for the pharmaceutical market, though now it’s used for other markets as well.
    At the property level, more than 50 specialists work only on pharmaceutical meetings. The number-one topic they must understand is security. Paper left behind in a meeting room is shredded; sometimes planners demand it be shredded in front of them, and sometimes they want it given back to them so they can ship it home.
    The Hilton sales force also knows to expect to work last-minute and with haste. Especially with product launches, the finalized convention résumé often isn’t ready until the day before the event. Compound a short lead time with the very heavy breakout needs pharmaceutical meetings are known for Hills has seen meetings with 200 sessions in a single hotel and the furniture-moving becomes a Herculean task.
    As a rule of thumb, though, Hills teaches her team to listen. “The most common complaint about other chains is, ‘They don’t understand our business,’” she says. “We’re actively soliciting feedback from our pharmaceutical base. It’s an ongoing dialogue.”

Securing the compounds
Boston-based Sonesta Hotels, Resorts and Nile Cruises is too small a company to have a corporate task force for pharmaceutical meetings. Nonetheless, Dale Scharlat, CMP, does her best to know the industry and grow business in that segment. Scharlat, the Millwood, N.Y.-based executive director of regional sales for the Northeast and a nine-year veteran at Sonesta, has become an expert by nature of her region, which includes pharma hotbeds New Jersey and Pennsylvania.
    Scharlat’s golden rule is the noncompete clause; that is, a hotelier cannot book two meetings from competing pharmaceutical companies at the same time. Someone from one company could steal confidential information from the other just by picking up a handout.
    However, that doesn’t mean two pharmaceutical companies can’t be in-house at the same time. It just means Scharlat has to read the RFPs very closely to figure out if the topics overlap, and she has to inform the meeting planners at both companies of the arrangement. “If everyone’s in agreement that the topics don’t conflict, they can live side-by-side,” she says. “But you need to seek approval from both parties.”
    Indeed, it can be extremely nerve-wracking for a planner to find a competitor is meeting in the next room, a nightmare experienced recently by Judy Benaroche Johnson, CMP, president and CEO of Rx Worldwide Meetings Inc., based in Plano, Texas. “We understand hotels have to book other business,” she says, “but they must inform us.”

Judy Benaroche Johnson,
CMP, Rx Worldwide Meetings Inc.

    For a recent conference in Barcelona, Spain, Johnson was told a competing drug company would be meeting across the street at the convention center at the same time, with a small breakfast in the hotel. The “small breakfast,” in fact, was a 200-person extravaganza that closed the hotel’s only restaurant, usurped some of Johnson’s meeting space and threatened to overwhelm her meeting. 
    “Our clients were livid,” Johnson recalls. “We would never hold another meeting there.”
    The hotel paid Johnson thousands of dollars for breaking the contract, but that didn’t solve matters. “They’re willing to give you back a penalty because the business is worth so much,” she explains. “It certainly makes the client happy to get some kind of cash break, but it really is secondary to having any of their information possibly breached.”
    Besides requiring a certain degree of exclusivity, pharmaceutical meetings demand heavy security, especially when proprietary information will be on the agenda. “You don’t want signage,” says Eileen Healy, director of sales at the Northeast national sales office for Loews Hotels, based in New York City. “You don’t want to publish the name of the company throughout the hotel.”
    KSL Resorts has implemented a number of security features for pharmaceutical meetings, including paper shredders in the meeting office and locked meeting/storage rooms that are rekeyed upon request. Above all, KSL’s employees are trained to be sensitive to the integrity of a closed door. “If another sales manager is doing a site and walks through a room where a pharmaceutical company is holding a meeting, that could cause a company not to come back,” notes Mike Aylmer.

Going down to the wire
“There’s only a certain window on how long a pharmaceutical company is going to have the exclusivity of a product before it goes generic,” explains Dick Zeller of Maritz McGettigan. “They want to get it to market as quickly as possible.”

Dick Zeller,
Maritz McGettigan

    Zeller says that’s why pharmaceutical launches so often are planned at the very last minute. The time between when a drug is approved by the Food and Drug Administration to the launch meeting might be as little as a few weeks. “Meeting agendas are subject to change up to and including the group’s arrival on site,” he adds. “Hotels have to almost anticipate that certain things are going to change.”
    “Sometimes you have only three or four weeks to get all this together,” says Loews’ Eileen Healy. “It’s important for us to deliver that quick turnaround time the customer needs. The Loews guideline is within 24 hours, but that goes out the window when the meeting is three weeks away.”
    Judy Johnson asks for even more flexibility for her meetings namely, with the rebooking clause. If approval of a drug is delayed until after the meeting has been planned, it’s important that the meeting can be postponed without a major penalty. “They’re not trying to get out of the contract, just to delay it when the drug’s not ready to market,” she says. “We really look for the hotel to be a little bit understanding.”
    Also, when Johnson guarantees her rooms, she requires that none of her attendees are walked. “When you walk an attendee who’s gotten there late,” she says, “he will miss the opening event. Then he has to be at the meeting at 6:30 or 7 a.m., and the ill will it causes will hurt us.”
    Such demands don’t necessarily make pharmaceutical companies more difficult to work with, says David Monroe, Mableton, Ga.-based director of corporate segment sales and marketing for the medical/pharmaceutical and insurance/financial sectors at Marriott International. The firms generally can pay for what they ask for, and their last-minute ways can become, with experience, relatively predictable.
    “Once hotels know their typical patterns and what their needs are, they’re pretty easy to deal with,” Monroe notes.

Facing new regulations
If doctors are present, pharmaceutical companies have to be very careful to keep the meeting from appearing lavish in any way, or they might find themselves on the front page of the Wall Street Journal. Trouble is, no one is quite sure exactly what is over the top and what is simply fine hospitality. They have been given a number of guidelines, put forth by the FDA, the Office of Inspector General and the Pharmaceutical Research and Manufacturers of America, but nobody really knows how to interpret them. In place of standardized rules, hotels have learned to follow each firm’s own interpretation.
    “Each of these companies has a little different read for what’s important to them,” explains Bob Franklin, director of sales at The Borgata Hotel, Casino & Spa in Atlantic City. “We really listen to them to get a good grasp of their needs.”
    Take the prohibition in the PhRMA Code against holding a meeting for doctors at a resort, a rule created to avoid the perception of bribing the docs to prescribe specific medications.
    “What we found is that statement doesn’t apply to every meeting,” says Mike Aylmer. “Some pharmaceutical meetings are not appropriate for our resorts, but there’s still a good bit of business that is.” KSL benefits from having properties, like the Arizona Biltmore and the Hotel del Coronado, whose colloquial names don’t include the word resort. Even if the word is in the name, though, it’s relatively easy to take it out in the contract, to de-emphasize the leisure aspect.
    “I have some people say, ‘If you can take resort out of the contract, I can get it through my compliance department,’” explains Aylmer.
    The same goes for the Sonesta Beach Resort Key Biscayne, says Dale Scharlat. Everyone knows that a hotel in Key Biscayne is going to be a resort, but she’s often asked to simply call it the “Sonesta Key Biscayne” in the contract.
    At The American Club, a five-diamond property in Kohler, Wis., the resort component is downplayed when doctors are attending a meeting there. “The activities are there and a benefit, but that’s not what we’re focusing on at all,” says Laura Scott, CMP, The American Club’s New York City-based senior sales manager. “The doctors pay for that at their own expense.”
    But Scott admits that in the end, a resort by any other name smells just as wasteful to procurement officers. “They figure it out sooner or later,” she says. “Procurement doesn’t understand resort. They shut down. That’s when you show quantitative data that there’s a benefit to coming here.”
    Keeping up on the interpretations of the rules requires a lot of continuing education. Borgata salespeople, for example, attend seminars about pharmaceutical meetings two or three times per year to learn about the latest nuances.
    Selling to pharma planners, on the other hand, is not as simple as attending a few big trade shows and being done with it. While the planners can be found at meetings industry events, conferences specifically for this segment are generally small and regional.
    Hotels whose staff aren’t able to attend these events might just hold their own. Philadelphia-based Aramark Harrison Lodging hosts multiple vertical consumer events during the year for medical meeting planners. While the planners come for chef’s tables, barbecues and wine tastings, Aramark’s sales staff bones up on the latest developments in the industry.
    Aramark’s vice president of sales, Jeff Weggeman, trains his sales force to cultivate an expertise about the pharmaceutical industry. They subscribe to news alerts from Forbes, Google and Hoovers, among other sources, which makes them as knowledgeable as their clients on many issues. “We become students of our business,” Weggeman says.

PHARMA-FRIENDLY MENUS

Gone are the days of surf ’n turf for all at doctor-attended functions. A number of hotel chains have introduced PhRMA-friendly menus, specifically designed to be over-the-top without raising the red flags of compliance officers or media.Here are a few tempting selections from Ritz-Carlton’s offerings that lack whole lobster tails and caviar but not opulence.

Breakfast
Mango brioche French toast with coconut palm sugar syrup

Caramelized bananas and roasted fruit preserves

Soup/Salad
Red bliss potato salad with smoked bacon and old-grain mustard

Heart of palm and orange salad with watercress

Porcini mushroom cappuccino soup served with porcini flour tuille

Cedar Key crab and lobster bisque en croûte



Entrées
Grilled smoked pork chops, grilled carrot purée, aji amarillo-pineapple mojo (a sauce with yellow hot peppers)

Seared filet mignon with red wine candied shallots, boniato potato gratin, served with cracked peppers and Merlot reduction

Seared mahi-mahi served with coconut-ginger mojo

Wild mushroom-stuffed farm-raised pheasant breast served with root vegetable mash, almond brussels sprouts and truffle jus

Sides
Plantain with balsamic basil glaze

Sticky orange and chipotle-glazed sweet potatoes



Desserts
Caribbean chocolate and pistachio pot de crème
 
Indian River orange, lemon and Key lime-frosted miniature orange tart
with “Cointreau chiboust” (like a soft meringue)

New York-style ivory chocolate cheesecake with five-spice blueberry compote

Passion fruit tiramisu served with marinated mango -- J.V.

Budgetary concerns
Reasonable spending is a major issue for most meetings. However, for many pharmaceutical-sponsored events, keeping the budget down is less about being strapped for cash and more about avoiding the perception of anything lavish.
    “They are so scrutinized on every dollar that is spent, the amount of quantifiable data now required in the proposal stage is staggering,” says Laura Scott. Indeed, she notes, such nitpicking can make it difficult to sell a luxury-class property like The American Club. “It’s hard to point out benefits of the property when you’re dealing with procurement,” she complains.
    But if it’s the bottom line that matters, Scott sticks to the bottom line. She pushes the shoulder season, when it’s a bit too chilly for golf but not cold enough to be unappealing. She also urges meeting planners to consolidate a few regional meetings in the Midwest into one at her property, which saves clients money and brings more business to the hotel.

Food that fits
David Monroe, a 24-year veteran of Marriott, studies this market and develops education on how to be attractive to pharmaceutical companies, then teaches seminars on the subject to Marriott salespeople around the country.
    One of Monroe’s main concerns is keeping meals from going over the top, an issue faced by most pharma planners (see “PhRMA-Friendly Menus,” page 60). Meal functions, especially when physicians are present, are heavily scrutinized, perhaps because they traditionally have been the most lavish elements of pharmaceutical junkets. To reassure meeting planners, Marriott has focused on making meals pharma-friendly.
    “While the pharmaceutical companies may pay the going rate on sleeping rooms, they have to manage the perception and reasonableness of a dinner function,” Monroe explains. “You just can’t pile on a seven-course meal. Doctors are going to very happy with something that looks good and has some taste to it.”
    Last summer, Marriott unveiled menus at 85 hotels that would tempt doctors but not irk compliance officers. (Ritz-Carlton has offered its own versions for two years.) The prices are quoted inclusive of tax and gratuity, making it easy for planners who know exactly how much they’re spending.
    “They’ve really gotten away from the full lobster and big steak,” says Monroe. “I don’t want to say our dinners are dainty, but they focus more on quality than quantity.” Instead of finding a T-bone and lobster, doctors might see a marinated skirt steak or lobster ravioli. The quality is there, just not the red flags.
    In order to simplify the planning of that $2.5 billion mini-industry, the dinner meeting, Renaissance Hotels & Resorts launched a website, www.dinnermeetings.com, this past October. The site allows planners to explore the pricing and book any number of single-meal functions for doctors online. If customer response is favorable, the web service will expand to other Marriott hotel brands.
    Marriott also offers complete meeting packages for pharmaceutical groups, which include sleeping rooms, meeting space, meals, breaks and Internet access, helpful for planners looking to meet a per-person budget.

The next step
So far, KSL’s Pharmaceutical Expertise Program has a promising future. KSL is recommitting funds to the program for 2006, which will enable the training of new employees as well as update those trained last year. Aylmer also plans to educate third-party planners working with pharma clients.
    As of the first of the year, Master Connection Associates has been granted the freedom to take the program to other hotel companies as well. All of its current clients have expressed interest. Cindy Novotny, managing partner at MCA, believes that by the end of 2006 every hotel chain will be up to speed.
    “Everybody will get it and we’ll be on to the next thing,” she says.