The World of Hotel Meeting Contracts Needs a Reality Check
ABC’s The Bachelor and The Bachelorette has been matchmaking for 15 years. In the business world, a similar reality show is happening with hotel meeting contracts and Corporate America.
But, who has the rose? Who are the bachelors, and who are the bachelorettes?
Hotels desire a relationship with Corporate America. In this strong economy, corporate meetings are increasing, so it’s apparent that U.S. businesses want a relationship with the hotels too.
Meeting Matchmaking Challenge
With hotels and companies both longing for each other, it seems dating relationships would result in quick marriages. But, Corporate America has commitment issues, and hotels want fast decisions.
Corporate America thinks they are the rich, handsome bachelor. They are reluctant to commit to a hotel for an incentive trip that operates in another 18 months or for the business meeting that is still 2-3 quarters away. Corporate America works with a quarter-to-quarter mindset, especially public companies. They maintain a short-term focus on current challenges. Corporate America thinks they play the role of ABC’s Bachelor who holds the rose (their meeting business) and has numerous lovely ladies (hotels) who will quickly accept their proposal. In today’s business world reality show, the corporate bachelors resist making a permanent commitment in the form of a hotel contract.
On The Bachelorette, the tables turn, and the lady holds the rose. In today’s marketplace, the hotel is the powerful bachelorette. Hotels are enjoying high occupancy, high ADRs (average daily rates), and high demand for both group and leisure travel. Hotels are whooed with lots of dating offers from business suitors. For example, a Grand Cayman resort declined to bid on a medium-size incentive travel program saying, “we have proposals to 10 different companies for those same dates, and we stop proposing at 10.”
Corporate America Needs to Commit
So, we have a dilemma. Corporate America is slow in its decision making, and hotels need fast decisions. Buyers often have big egos because they have the money and assume sellers will be glad to take their money. Hotels today are different. In addition to high demand from corporate groups, revenue managers know that, with leisure travel strong too, the rooms can sell later at higher rates to transient business travelers or vacationers.
While businesses might be the bachelor (lower case) because they hold the ring (their meeting budget), they are not The Bachelor who gets to make the final decision. The hotel holds the power today; she gets to hand out the final rose.
Sourcing Quandary for Meeting Agencies
Incentive and meeting agencies are event matchmakers. We strive to match corporate groups with suitable hotels. Sourcing teams do the research, send eRFPs, review proposals, and present their recommendations. Then, many companies promise to decide quickly, but a higher priority stalls their decision. The room block or meeting space is sold to another party, and agencies must incur added time and labor costs to redo their work. Drop us a line to see how Brightspot can help be the catalyst that brings your meeting to the perfect hotel without the wasted overhead.
Moral to this story: the bachelor must overcome their commitment issues, or all the pretty options will be snapped up.