Betting on Meetings

While Las Vegas has been clobbered by the economy and a presidential put-down, smaller gaming properties find ways to keep meetings on the books.

While no meeting hotel or resort that relies on meetings, incentives, conferences, and events has had a good year, many of the non-Vegas gaming properties spread across the United States from Connecticut and Florida, to St. Louis, to Lake Tahoe, have found that with a little creativity, hard work, and a willingness to search out different groups than they have courted in the past, 2009 has not been a disaster. To say nothing of 2010. During discussions with the sales directors or general managers of four gaming properties last month, one thing became very clear: This segment of the hospitality industry doesn't intend to give up on the MICE market without a fight.

PARTICIPANTS:

Harrah's Lake Tahoe and Harveys Lake Tahoe
Steve Lowe, regional director of sales of Harrah's for Northern Nevada
Lake Tahoe, NV

Mohegan Sun
Chris Perry, vice president, hotel sales and marketing
Uncasville, CT

Lumiere Place Casino & Hotels
Todd George, vice president and general manager
St. Louis, MO

Seminole Hard Rock Hotel & Casino Hollywood, FL
Mark Tascione, director of sales and catering
Hollywood, FL

Q&A:

Successful Meetings: How has 2009's meeting and incentive business been? And what is the outlook for 2010?

Chris Perry: The thing about our property is that we are very regional. It really is the Northeast, upper New England, Washington DC, and not really that far west—just eastern Chicago. And we draw mainly from Massachusetts, Connecticut, New Jersey, and New York. A lot of our business is financial, insurance, and banking, which are the hardest hit industries.

This year, we witnessed—as many [properties] did—a number of cancellations and groups that didn't rebook, as well as attrition situations. [Convention planners] are struggling to keep their attendees.

But we were able to offset the occupancy by being aggressive, and a little ahead of the game in other segments, particularly gaming, which ate up the losses that we had in both group and the non-gaming or transient segments. Our occupancy from that point remained strong, but our revenue for the hotel is down.

Steve Lowe: Historically, Harrah's and Harveys in Lake Tahoe have been considered strong incentive destinations. Certainly, we do regional meetings, and we do a lot of corporate stuff. The economic slowdown and, more importantly, the actions of the administration in Washington and the AIG scandal that made business groups think of "resort," "spa," and "golf" as dirty words, have certainly impacted us from a meeting standpoint. Lots of companies are freezing travel, lots of companies are not coming to resorts or to golf and ski destinations.

We have changed our strategy a little bit, which has paid off. We are now looking at businesses that we deem economically solvent and that are traveling, and we are staying away from the traditional companies, such as automotive, builders, and finance, which we had worked with a lot on incentives.

We are doing a lot more meetings, a lot more associations. We are finding the healthcare industry is still spending money and franchisors are spending money—we have a large Jack in the Box program coming in now. With the economy slowing down, a lot of fast food businesses are doing quite well.

We've had a pretty strong first quarter. Group-wise, we actually were flat to '08. We had a few softer months, but by shifting our emphasis, we've actually been doing quite well.

Mark Tascione: We have been quite fortunate. Since we opened the hotel, our group business has been repeat customers, and they continue to rebook. They are not spending as much on [things like] decor; they are making do with the bare minimum. But we are pretty well booked through 2010. We had a financial company in June. They booked a 500-person event with 300 rooms per night for three nights, and they booked it two months out. That was a surprise. We've had [a European automaker's] financial arm, small union groups, corporations. There are fewer attendees—they tend to be executive level when in the past these same companies brought lower management. But it's promising; business bookings have picked up in the last four months.

Todd George: For us, and all of St. Louis, we go with the national economy. Still, the convention and visitors bureau has done a phenomenal job. And, our property being relatively new—the casino opened in December, 2007 and the hotel in February 2008—we get the benefit of [first-time] trials.

Being in the Midwest; we do see some seasonality, and we've seen a noticeable uptick in the summer. St. Louis offers a lot in the summer—baseball, the Arch, parks, and museums. And St. Louis has the 2009 All-Star Game, which took place in mid-July and brought in a lot of business.

We've been getting weddings, reunions, pharma companies, SMERF, doctors, bar review—we've been able to adjust the property to the groups that come. You have to take what's out there.

SM: Are companies booking or just talking about it?

Perry: [For 2010], from a group standpoint, our pace is off. But we are seeing, all of a sudden, an influx of large groups that are looking to book within a 12-month period. They want to book, but the reality is, they're shopping; they know the advantages they have right now. They are also trying to finalize budgets to make sure they get the go-ahead. [Lead times] just keep shrinking and shrinking.

Lowe: We are looking at the companies that were spending a lot of money before—now they want the same program with a lower budget. That makes our sales people a lot more creative.

Instead of being a victim of the economy, do something about it. Expand your paradigms, look at your business, triage your databases, get out there and find out how you are going to provide a price-value program, so it doesn't have to be all dictated by price. What is the value we are able to offer customers that are willing to spend money in our area? You have to start being extremely creative when you look at your food and beverage, and all of your hotel processes.

George: People are looking for great value and getting the most from their dollar. We have a couple of major financial clients. They really scrutinize every charge—negotiations take much longer. But that makes it a more fiscally responsible meeting, and that plays well for everyone.

In general, we're seeing longer due diligence; [potential clients] are getting competitive bids and committing later.

We can package meeting space and rooms, and focus on providing quality. People who, in the past, might have gone to Las Vegas will give us a try. We can make it so groups that might only spend a few days in a more expensive destination can stay here for a week.

SM: When President Obama called out companies that were going to Las Vegas for meetings, there was a rush of cancellations. As a gaming property, did that affect you?

George: It's tough to connect to the President's remarks. In challenging economic times, you need to be creative.

Tascione: We had quite a few cancellations, our January and February were our worst in history. But those clients that canceled have all rebooked within 10 months of their original programs. We lost business in 2009, but we got them to rebook further out, and they rebooked for 2010. We imposed no penalty for rebooking, but deposits are nonrefundable if they cancel again.

It's all business now, not a lot of play. In the past, it was four days of meetings and some play: fishing in the Everglades or an extra dinner reception.

Lowe: I don't know if it was that statement directly ... what hurt us more is perception. AIG probably hurt us more than anything. Sending their channel sales partners on an incentive, having just been bailed out, and then spending this money, and then the way the press twisted it, really did hurt us.

The hotels and the resort industry have not gone out there and told people what we truly do. So when crisis does happen, a lot of people don't quite understand what this meeting stuff means. When they say it's a boondoggle, is that true? What is the value of face-to-face meetings? What is the value of brainstorming, or a think tank retreat? It's our responsibility to be a lot more proactive about educating the general public as to the value of a meeting, the value of an incentive. A lot of people don't know that incentives are actually paid for by the participants—by them selling and by their job performance.

Perry: I agree with Steve's comments, but I will say, I think the industry's response has been aggressive in terms of showing they're upset with some of the comments that came out of the government, and how it hurt. In terms of perception ... nobody wanted to wind up on the evening news.

I think being here in Connecticut, between Boston and New York, we were a little less exposed to what Vegas went through. In terms of the property, we are a little different in how we are set up. When you come here for a meeting, you walk out of a hotel room and right into the meeting space; you don't walk through our casino, which makes us unique.

I don't think we lost a tremendous amount of business from the perception standpoint. We lost more business because companies canceled their meetings due to financial reasons.

SM: How do you respond to this?

Lowe: We also have to start training our sales people to get back to basics, get back to relationships. For so long, we had the luxury of rates, dates, and space. Now it's time to start talking and truly selling.

I don't think our industry has listened to customers in, probably, the last 10 years, because we've had a real boom and we were fortunate. Some hotels—and many in Las Vegas were a good example—order-filled for the last 15-20 years. They haven't sold a thing, because the demand was so great. Now it's time to truly look at that and say, "What is of value to you, the customer? Is it just the room rate, or is it other things: Location, accessibility, creativity, the food and beverage?" Really start talking to them about their needs, rather than just running to the rates, dates, and space.

SM: Groups today could have a lot of different generations participating. How do you deal with the Gen Xers and the Millennials?

Lowe: The Gen Xers, as we know, are hedonists. That group is hard to figure out. They are not loyal to much of anything and they are looking for the next career, the next buzz, the next adventure. You have to be on your toes with them, even in putting your programs together.

The Boomers are still spending their money, but you have to be able to work on the generational piece with the Gen Xers and the Millennials. And understand them. Before you start regurgitating your brochure, understand who you are talking to—Boomer, Gen Xer, Millennial—and then design programs accordingly to that audience. That's a whole other piece that we, as sales teams, better start looking at.

Perry: The key to the whole thing is the loyalty issue. I find that to be the biggest struggle. That group that Steve is talking about is easily swayed, and it's hard to hold on to them. You can do things perfectly, blow them away, but they quickly forget. They are on to the next thing, where 15 years ago that was not the case; you had a group, they loved you for life, and they came back. People that are selling on our behalf have to understand how to handle that market and hit the right buttons in order to keep them here.

SM: We're all hearing about the importance of green meetings. What are you seeing with your clients? How important are green initiatives, and how are you addressing the green issue?

George: We're hearing that more and more and doing more and more. [Potential clients] are asking, "How do you address this, do you recycle?" Being a good corporate citizen is very important to us, from environmental issues to sponsoring community events in the downtown [St. Louis] area.

Perry: We have all the elements here at Mohegan Sun with green efforts. First of all, we have Native American ownership.

But I'll tell you, we have probably never lost a piece of business because of it, nor gained a piece of business. [Green meetings] have tremendous value, but the topic itself is being blown all out of proportion.

Lowe: I agree; I think it's media hype. I have been to many green sessions; it's like jumping on the Hallmark moment. This isn't going to be solved in 30 seconds; it's not about running out and buying the next green widget. Because, first of all, who is going to pay for it? Customers don't want to.

Tascione: It was a big issue in the beginning, but now it is slowing down. That's economy-related; [planners] are looking for the best deal. We are not seeing as many [requests for proposals] requiring it.

But certification was a huge issue. We got our second Palm from the state of Florida. We had groups saying, if you do not get certified, we can't come. It was a mandate from corporate. They won't even order bottled water—which is a huge loss [of revenue]—and some are now asking for recycling bins.

SM: Closing thoughts?

Lowe: I'll go back to where I started: Stop being victims and do something about it. We need to stop freezing travel for perception reasons and get back to business in order to make money in this economy.

Perry: Some of the worst decisions are because of fear in the marketplace. You saw some companies cancel meetings at some of these resorts, paying huge cancellation fees, and they hold the same meetings somewhere else. It's just wasting that money.

Originally published Aug. 1, 2009

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