Survey Says: Planners Under Pressure
Responses to Destination Hotels’ most recent meeting planner survey presents a snapshot of the predicament meeting planners find themselves in today: under pressure to control costs at the same time struggling to provide events that meet the high expectations of management.
Denver-based Destination Hotels manages more than 40 luxury and upscale hotels in California, Colorado, 15 other states, and the District of Columbia. It conducted its annual “State of the Industry” survey in October, drawing 295 responses, and released the findings last week (Dec.2).
Asked if their budgets for 2016 were likely to be higher than in 2015, 68.5 percent of respondents said no, they’d either be the same or lower. The pressure on planners comes from the widely-held view that hotel rates are expected to rise significantly in 2016.
In response, respondents identified rate as an increasingly critical factor in determining site selection. Seventy-seven percent said—that on a scale of one to 10—rate ranked either nine or 10 in importance. Consequently, Destination Hotels executives expect to see a jump in the number of planners trading down from luxury to upscale properties next year.
Adding even more pressure on the issue of higher rates, these executives said they expect hotel revenue managers to start cutting back on their group room allotment, instead adding to the number of rooms available for higher-rated transient business and leisure bookings.
The days of planners being able to negotiate discounts on food & beverage events seem to be coming to an end as well. Over 67 percent of respondents named F&B pricing as a critical concern heading into 2016. When it comes to F&B, pricing is now a more pressing issue than the types of options available: only 54.1 percent identified it as a major concern.
For planners intent on trying to get discounted prices on F&B, Destination Hotels executives have one tactic to suggest: a concept known as “menu matching.” The planner chooses meal menus where the chefs can share ingredients with another group’s meals being prepared on the same dates. Or, if that’s not feasible, the planner chooses menus identical—or similar—to what is being served at that time in the hotel’s on-site restaurant.
Either scenario allows the director of F&B to take advantage of bulk purchasing and reduced labor costs, then passing the savings on to the planner.