As Meetings Return, Planner Voices Concern

David M. Brudney, ISHC, a nationally recognized spokesman for hotels and a veteran with four decades of experience, is the principal of David Brudney & Assoc. of Carlsbad, CA

David M. Brudney, ISHC, November 2010

More on this return of meeting demand … Readers responded favorably to my last column when I wrote demand is back, group bookings are up and the window for bookings is getting longer.

HotelNewsNow.com's Patrick Mayock's recent series about group recovery served as additional validation, pointing out the improvement in group demand in 2010: 5 million more roomnights sold during March than February "with promising monthly upward bumps through June and strong numbers throughout the summer, according to STR."

Mayock's survey of major hotel companies confirmed a strong improvement in weekday demand and a considerable jump in year-to-date bookings "driven by a return of corporate meetings."

Bob Gilbert, CEO of HSMAI, restated a quote of his from summer: "Looking ahead, bookings for corporate meetings are up 5.2% for the first two quarters of 2011." Gilbert articulated then what other industry observers believe intuitively: "Meetings have to happen," he said. "It was just a matter of time."

A Voice of Caution

A strong voice of caution, however, came in a response to my column from a highly regarded, well-respected meetings industry icon.

Expressing real concern and a warning to all hoteliers who may be "licking their chops" in anticipation of a banner year in 2011 was meeting planning guru Joan Eisenstodt, moderator of Meetings Focus Forum and principal of Eisenstodt Associates, LLC, in Washington, D.C.

Eisenstodt, who has influenced thousands of meeting planners through her extensive teaching, mentoring and speaking, contends unemployment numbers might remain high well into 2011. That alone will impact corporate meeting bookings in particular.

She envisions more cancellations during 2011-and those meetings that remain booked will suffer lower attendance and room block attrition.

This is especially true for association conventions and meetings. A recessionary trend might continue with attendees more likely to bypass the host hotel in favor of those "around the block" that offer lower room rates, according to Eisenstodt, who is also a former moderator of MiForum, which boasts 1,800 meeting planner participants.

Another concern voiced by Eisenstodt that is particularly apt for large conventions booked at municipal convention centers: Cash-poor cities are cutting back and even eliminating critical-for-attendee-event public services. Will new tax increases cover necessary municipal emergency services?

Nationwide, nearly nine in 10 municipalities are in worse shape than in 2009, according to a survey by the National League of Cities reported in the Los Angeles Times. "About 79% of cities are cutting personnel."

Going forward, hotel sales professionals would be wise to take note of Eisenstodt's warnings. I recommend:

• Become mindful of the residual effect on group bookings from a more prolonged recovery and high unemployment.
• Be prepared to address those concerns even when and if meeting planners choose not to do so.
• Be prepared for any likelihood that group bookings made now might be subject to cancellations or, at the least, room-block attrition, more so with the association and professional society groups.
• Rate transparency: Monitor pricing for rooms within your neighborhood over dates of groups booked in the future, and develop appropriate strategies to protect your room blocks.
• Do your homework to get up to date on any and all municipal cutbacks on emergency and standard services so you can be better informed. Speak more intelligently, staying on top of all issues facing meeting planners today.

The Airlines Soaring High

A positive note to add to the discussion: The airlines industry appears to be back in the black for the first time since 2007, and "demand for air travel, both business and leisure, began to bounce back in the last few months," according to the Los Angeles Times. The airline companies are running more efficiently as well. The nation's airplanes flew on average 87% full in July, the highest level in a decade, according to the Bureau of Transportation Statistics.

"In September, the total miles flown by passengers on United States carriers was up 7% and passenger revenue up 19% compared with the same period last year," the Times said. Robert Herbst, an independent airline analyst cited in the newspaper's report, added the single biggest factor in the industry's improved financial picture is demand has increased but capacity has remained flat. "They are basically selling every seat," he said.

This airline industry news bodes well for all hoteliers with hopes for a strong return in demand.

I will be addressing the collaborative relationships between planner and hotel in my columns to follow. Meanwhile, your feedback is most welcome.

About David Brudney & Associates

David M. Brudney, ISHC, is a veteran hospitality sales and marketing professional concluding his fourth decade of service to the hospitality industry. Brudney advises lodging owners, lenders, asset managers and operators on hotel sales and marketing "best practices" and conducts reviews of hospitality (as well as other industry) sales and marketing operations throughout the U.S. and overseas. The principal of David Brudney & Associates of Carlsbad, CA, a sales and marketing consulting firm specializing in the hospitality industry since 1979, Brudney is a frequent lecturer, instructor and speaker. He is a charter member of International Society of Hospitality Consultants. Previously, Brudney held hospitality sales and marketing positions with Hyatt, Westin and Marriott.

Contact:  David M. Brudney, ISHC, Principal
David Brudney & Associates
Carlsbad, CA 92009
Phone:  760-476-0830
Fax:  760-476-0860
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