Darlene Kelly-Stewart (MPI Ottawa Chapter), owner of Stonehouse Sales & Marketing Services, an independent third-party planner in Ottawa, finds that contracting with hotels is becoming more complex by the day. With meetings booked years in advance, many existing contracts don’t take into account the disruption caused by attendees’ increasing use of services such as Airbnb, she finds.
“Say you’ve got 250 on peak—and might perform over that year over year— now you’re lucky if you get to 200 because people are finding alternative places to stay,” Kelly-Stewart says.
That can put a strain on both the planner, who booked the rooms in good faith, and the hotel.
“As much as the hotel and organizer want to come to some sort of agreeable pleasant outcome, it gets to be very aggravating,” she says. “Market forces are impacting you where you didn’t think they would.”
Kelly-Stewart wishes that contracts would include a check-in provisions, where the planner would be able to modify room blocks without penalty by a certain date—set to allow the hotel enough time to put the rooms back on the market. That might also help hotels to avoid leaving a negative feeling with clients charged for attrition.
“You want both people in the contract to be happy they’re in a contract, not resentful they are being overcharged or penalized for the progress we’re making in tech and being able to stay in different places,” she says.
Kelly-Stewart is not alone. One of the key trends to emerge in this quarter’s Meetings Outlook is the increasing complexity of contract negotiations, with 54.9 percent of respondents saying they’re seeing this trend and 22.8 percent saying they focus on new/different issues more than in the past.
Bill Voegeli (MPI Georgia Chapter), president of Association Insights, the Atlanta-area research firm that conducted the survey, says a significant contributing factor has been the home sharing services such as Airbnb and sites such as Trivago that allow travelers to shop around for the best-priced hotel rooms, sometimes in the same hotel where an event is taking place.
Instead of booking within the room block, guests are trying these alternative options, which is leaving some planners and organizers in the position of not being able to keep their commitments to hotels.
That’s not the only factor contributing to the complexity. In what 67 percent of respondents describe as a seller’s market, sought-after venues and destinations are being a bit firmer on contract provisions and clauses related to F&B and attrition.
“It’s harder for the planner to get their way on meeting their budget,” Voegeli says. As one U.S. planner, who requested anonymity, put it, “Hotel rates are out of this world.”
Mergers between hotels have heightened the situation.
“This has made it so that in some destinations planners have a harder time getting competitors to work against each other because they are no longer competitors,” Voegeli says.
Don’t miss the entire Meetings Outlook report for this quarter. Meetings Outlook is developed in partnership with MGM Resorts and supported in partnership with IMEX Group.
