For hotels, business is brisk. Demand is high and supply is low. The leisure and business traveler market is so robust that many hotels are lowering the number of rooms they are making available for group business.

Convene wanted to know if independent or third-party planners are finding many hotels switching on the "no vacancy" sign when they come calling. Here is what seven independent/third-party planners had to say.

Convene: Are you finding it difficult to get the greatest possible block for your group due to the fact that hotels are lowering their group commitments?

Pam Lackland, CMP
Regional Vice President
ConferenceDirect

The group block commitment isn't the main issue; it's finding space at all. The searches that I've been conducting for clients lately have involved going from three to five cities to even find a hotel with the rates and the space that they need, rather than finding several easily in one destination. This makes my job much more time consuming and it's more difficult to produce the desired results for my clients. In fact, I've just completed two such searches: one that went from Washington, D.C., to Arlington, Va., to Alexandria Va. … I finally found a hotel in Annapolis, Md. - and only one at that. Another went from Boston to New York City to Philadelphia and I finally found some in Baltimore. So all in all, site searches, contract site searches, and contract negotiations are taking far longer and with many more leads sent out.

Steve Carey
President
Blink Communications

As an independent conference production company, we have not had to deal with current room accommodations/block issues.

Gregg Talley, CAE
President (and his team)
Talley Management Group Inc. (TMG)

I have felt the effects when I go to first-tier cities with my smaller groups. Another issue results from their higher ratio of meeting space to guest rooms. It is difficult to get a desirable rate, but the block isn't really a problem. We have had to look at splitting blocks between properties, which works great for some clients but not so well for others.

Brad Weaber
Executive Vice President and Chief Customer Officer
Conferon Global Services

Based on our relationships with our partners and the volume that we produce on behalf of all of our clients, we are not finding this to be a challenge to date. In speaking with many of our hotel partners, we find that while they need to have more of a market mix at their properties to maximize average daily rates, this has not been a material issue to date. The more vexing issue is that of meetings that are performing above historical averages [but are hard pressed to find] additional inventory in some of the major cities due to compression from the pickup in transient and business travel.

Michelle Beniak, Independent Planner

Getting the greatest possible block for a group is becoming more difficult. Hotels have focused on the larger groups. However, my experience is that you may have a better chance of getting what you ask for in terms of block commitments from the hotels, depending upon the area of the country and the property.

Russell Kraus, CMP, Meetings in General

There are very strong indications that we are currently in a supplier's market, however I have been fortunate to place my clients' meetings in properties that could accommodate their entire block. This hasn't been without some challenges as many of my clients' first choice of cities are quite popular and availability for the preferred dates is sometimes an issue. Fortunately, I have been able to convince the majority of my clients the value of date, pattern, and location flexibility and this is reflected in the Requests for Proposals that are sent out.

Catherine Anderson-Brown, CMP
Partner, CAB & Associates

As an independent planner, my experience recently has been quite favorable in my negotiations with hotel properties. I have never had a problem in receiving an adequate block for my clients. But I do not manage extremely large meetings anymore and another reason may be that my contracted groups have become a bit smaller (around 300/500) than previously.

Convene: What strategies have worked for you in this regard?

Lackland: You must be willing to negotiate space versus sleeping rooms and compromise on the meeting room setups, as well as on the rates and meeting room rental, to obtain what your client needs and wants. There is a lot of "advising" of clients on the rooms-to-space ratio which plays an important role in finding a site for a meeting, now even more than ever before.

Talley: The best solution I've found is to go to second-tier cities or book smaller properties where they can have the whole property to themselves. For one group, I worry that this will no longer be effective as their program expands and their membership has very little potential for growth; translating into a static attendee turnout. I also try to keep the committees aware of the hotel-friendly pattern their meeting has every time they decide they want to change their meeting days. It is important we know our clients; what we can be flexible on and what we need to hold our ground on.

Weaber: If a planner knows the value of their meeting and is able to showcase that full value to the facilities and also has the ability to be flexible in arrival/departure patterns, there are still some value opportunities available in some of the major tier cities. Additionally, secondary markets still have many opportunities for value and with the developments that took place in many of these cities over the past several years, they look great!

Beniak: Scheduling meetings at non-peak seasons, and changing the venues and areas of the country to hold meetings are two strategies that I use to help get the greatest room block possible.

Kraus: I utilize all of the support resources available, such as national hotel sales representatives, convention bureaus, and hinton + grusich to assist me in distributing my RFPs and finding suitable locations for the client to consider.

Anderson-Brown: I negotiate hard but fairly with the hotel and other suppliers for a win/win situation. I negotiate all aspects of the meeting, guest rooms, AV, amenities, meals and menus, and meeting rooms. All of my meetings, conventions, and trade shows are held in one large hotel.

Convene: Do you feel that as an independent or third-party planner, you have more leverage than association planners who may only plan one big annual meeting?

Lackland: Yes, definitely - and in particular with the hotel chains where we have national sales contacts who are very familiar with the amount of business that ConferenceDirect produces. We will book around $250 million in room nights revenue in 2006, so this obviously gives us "clout" and enables us to negotiate better rates, more meeting space for our clients, and client-favored contractual clauses, since this is a huge amount of revenue that we are generating. However, with independent hotels, it's not quite as easy since the volume issue doesn't play as important a factor in their decision-making process.

Carey: Where our services have greater leverage than in-house association planners is in our ability to "bundle" several clients, whereby booking them as a package at hotels. By offering venues the volume of two to four meetings in one year (or four to eight over successive years), we can bargain for the best rates and services, at terms associations going it alone on a one-year basis wouldn't be able to achieve.

Rates and budgetary issues are critical to our clients. Most are nonprofit organizations that hold somewhat smaller meetings when compared to other groups and corporations. Through the power of "bundling," we can ensure that these associations receive the same attention and service afforded to larger groups - at a great price.

Talley: I do feel I have more buying power for my groups due to the high volume of business TMG brings to all of the chains. For the smaller groups, I think this gets me responses from more properties than it would if I were soliciting on my own. I don't feel I have more leverage than a larger group would, I just feel that I have a more broadened reach than I did before. By having the "buying power" we have been able to use that in our negotiations to obtain what is needed for our clients. Letting venues know that we may be coming back again soon or have interest for another client helps us obtain what is needed.

Beniak: Independent planners may have more leverage than association planners based on the number of events the independent or third-party planner represents. While association planners typically hold one big annual meeting with an occasional local meeting, their room blocks are typically larger than most [independent] planners' clientele. Having multiple groups/meetings allows independent and third-party planners the opportunity to bring additional types of groups to the hotels. This is especially true if the groups prefer the same type of hotels and area of the country.

Kraus: The fact that I have numerous clients and numerous meetings held throughout the calendar year has been beneficial in my dealing with major hotels chains and some CVBs.

Anderson-Brown: I've never thought that independents have more leverage but they may if they are doing 10 or more meetings per year.

Convene: Are there other challenges that you are facing in the current climate?

Lackland: Yes, it is truly a seller's market now and this will probably remain as such for three to five years, or indefinitely since the hotel chains are not building any "big box" hotels at this point, except in Orlando and Vegas. So the demand is outpacing the supply of hotel rooms and meeting space in mostly all areas, even the second-tier cities. Recently, I just conducted another site search, which went from Nashville to Memphis, and I couldn't find the space over the preferred dates. We are now looking at Myrtle Beach. Meeting room rental is also becoming less and less negotiable. Gone are the days when you could have the rental waived 95 percent of the time. The old supply and demand rule is certainly in play and is projected to remain that way for some time.

Talley: The cost of Internet access is still steep in most hotels and as most groups turn to networking options for sessions and presentations, the costs are getting incredibly high. It feels stifling. While hotels market their connectivity, the cost is almost prohibitive for a small group trying to grow.

Yes, rates are going up, availability is going down, and the time to make decisions has shortened tremendously. Seems as though there is always another group on your heels for the rooms/space. This makes negotiating much harder as the hotels have the control and we are finding some "take it or leave it" situations.

Beniak: It is difficult to be taken seriously when you have groups of 50 or less with sleeping rooms. Many of the hotels enforce stricter attrition and offer no amenities to the smaller groups that normally could be negotiated with a larger group.

Kraus: Another challenge being dealt with regularly is the control rev par managers have on the decision-making process at some hotels.

Anderson-Brown: The major challenge is that prices that are being driven up mostly because of fuel prices. Consequently everyone is raising their prices because their costs are higher, from hotels to air travel … and most suppliers to the industry. Therefore, to make any profit, attendees have to pay higher registration fees.