The meetings marketplace is currently in a major shift from a buyer’s market to a seller’s market in the fifth year of a hotel recovery cycle. On a national average, the hotel industry has seen occupancy levels rise from 54 percent to almost 63 percent since 2009. In many major markets like Las Vegas, Chicago, New York and Washington, D.C., the occupancy rates are much higher. According to PKF Hospitality, RevPAR (revenue per available room) has increased approximately 6 percent per year for the past four years, and the 2014 forecast calls for a RevPAR growth of 6.6 percent.
Additionally, very few new hotels have been built since 2009. Currently, there is less than 1 percent new supply scheduled for 2014, which is well below the 2 percent long-term average. Meanwhile, many hotel sales departments are still operating with reduced staff. What does this mean for the meeting planner? With reduced staff, les availability and fewer new hotels opening, the combination has resulted in increased difficulty finding space for programs.
HOW TO MAKE AN RFP STAND OUT
DATES » List potential dates in order of preference. I would recommend listing three to four sets of dates at a minimum. Can your meeting take place over certain holidays? More and more groups are open to meeting over Mother’s Day or Halloween; hotels usually offer a discount during these times. Also, find out if your group is open to arriving on a Sunday, which is the slowest day of the week. If your group usually meets Mondays through Thursdays, could they consider a different pattern in the future? The more dates and options you give the hotel, the greater chance of finding an available set of dates. Also be open to a multiyear contract. Locking in your dates for the next two or three years can really help your organization, and the rates will probably be lower than waiting to rebook after each annual program.
RATES » If you cannot pay above $200, do not send your RFP to New York City during peak season. Instead, consider meeting in the surrounding areas. For example, in New Jersey there are many great hotels that offer room rates well below New York City’s rates. You can find similar situations by meeting in Oakland instead of San Francisco or Tacoma instead of Seattle. Also be sure to keep good rate history for your group. By listing the group’s room rate range at the top of your RFP, you can save yourself and hoteliers a lot of time.
PLATES » Know your food and beverage spend. Can you bring additional off-site events on-site to sweeten the deal for the hotel? Knowing your group’s ancillary revenue is also important. Does the group run a golf tournament or do they use the spa? Are there ICW (in conjunction with) group events such as sponsor breakfasts, lunches, receptions or dinners that could take place at the hotel? All of these factors are considered when hotel sales departments analyze your group’s revenue potential.
Finally, knowing your decision timeline is increasingly important because hotels often have first-option, second-option and sometimes third-option groups lined up. If you can sign a contract quickly, you have a major advantage when compared with other groups.
Bill Light is a hotel sales and marketing veteran with more than 25 years experience. He has spent the past eight years with Associated Luxury Hotels International, and has also worked for Starwood, Sheraton and Renaissance Hotels