How to trim budgets, reevaluate programs, add value -- and ultimately come out ahead.Recession. Economic downturn. Depression. Buzzwords like these have permeated the media and our industry recently, scaring many companies into retreat when it comes to holding meetings and incentives for fear of public backlash. However, it is even more important in times like these that sales, profits, and employee morale get an extra boost.
Meetings industry professionals around the world must reevaluate their program content, budget, and value in order to retain their meetings.
"We believe that business meetings and their purpose are a necessary part of our company strategy, but of course we always adhere to a budget," says Robyn Harper, supervisor of sales promotions for State Auto Insurance Companies. "It is important that we partner with suppliers that can achieve our business objectives while keeping both of these factors in mind."
Fortunately, there are several ways to accomplish business objectives without sacrificing your program or its quality.
1. Timing Is EverythingProperties will offer more favorable rates if you select a pattern that does not interfere with the revenue they count on from non-group travel. For example, a Sunday-to-Friday pattern at a resort could be less expensive than a Thursday-to-Sunday pattern. This is because such properties will achieve high occupancy over a weekend from leisure travelers, but need a boost in their midweek occupancy rates. Conversely, an urban hotel may be busier during the week with business travelers and therefore offer better deals on weekends. A property's most desirable patterns and rates could vary based on type of property, location, and other factors.
It is always a good practice to ask what pattern could afford you the best value. If you can consider moving to alternate days of the week you may find that the savings you receive from the room cost alone may be enough to operate the rest of your program without any further reductions.
In addition, consider when the shoulder season of the destination is. If you can travel at a time of the year that is off-peak, you will find greater flexibility in the availability of rooms and function space, as well as willingness to negotiate pricing.
"Our hotels are all very flexible in working with planners to earn their business," says Kim Smith of Hilton Hotels. Depending on the destination and the season, companies can capitalize on some very creative terms and competitive pricing in the marketplace.
2. Negotiate Up FrontWithin the midst of this financial crisis there is opportunity. Choose suppliers that are working hard to retain and earn business. There are plenty who are ready and willing to work with you. To maximize your purchasing power, think through what contract terms are important and request them from the start. An RFP with clear and quantifiable parameters will enable those reviewing the RFP to respond to your requests more quicklyleading to a more efficient process for all involved. Once you set the tone, your business partners will understand your expectations and, more times than not, meet them, saving time and money.
3. Look for Value"Last-minute deals" and "cancellation steals" abound in hospitality marketing materials right now. Seek out those opportunities and capitalize on the values that exist currently.
"The industry has recognized that the consumer is in the driver's seat," says Bob Miller, president and CEO of Excellence In Motivation Inc. (EIM). "We've been able to obtain some unprecedented hotel rates in destinations that meeting planners may not have been able to consider in the past because they just were not cost- competitive. Now is a great time to be purchasing for your next meeting," Miller adds.
4. Scrutinize Program ContentWhen looking at the value of a program, first assess where your money is being spent. If you know you need to reduce expenditures, reconsider enhancements such as room amenities, gifts, extravagant decor, and other extras. Keep only those that directly add value to the participant experience. By weighing the nice-to-haves against the have-to-haves, you will find that the integrity of the attendee experience will remain uncompromised and that few, if any, guests will comment that they didn't receive chocolates in their room, or a gift emblazoned with the corporate logo like they got last year.
Can you combine your incentive reward with a business component, such as a general session or state-of-the-industry meeting that allows your organization to kill two birds with one stone? If you already incorporate business with your incentives or golf with your meetings, consider the timing of your programming to ensure that each day is productive and important to the success of the program. If you have the ability to plan shorter trips with fewer nights away from the office, there could be considerable savings.
5. Give BackResearch tours and group activities that could translate into tax-deductible and potentially cost-saving elements of your program. Many destinations and local vendors are incorporating philanthropic events or activities with an element of community awareness into their service offerings. Make your teambuilding event a win-win activity by helping to build a shelter for the homeless, decorating a bike for a young child in need, or donating your group's time to another worthy cause. Not only are you offering a rewarding and fulfilling experience for your attendees, but positioning your organization as a conscientious one. Occasionally, these activities and experiences won't come at any cost to you because you are volunteering your team's time. Community service is a creative and fulfilling way to save.
If you prefer to focus on the environment, "Go Green" movements are plentiful. Many destinations offer eco-tours and activities that are educational, and environmentally sound, providing your program with a big, memorable experience but a small carbon footprint.
6. Buy on ConsumptionGet what you pay for. Avoid purchasing services, food, beverages, and the like in a package structure unless you have compared the value against buying on consumption or actual usage.
Such packages are based on taking your total participant count multiplied by an average expected usage and cost per item. Often, this formula for calculating consumption is generous, as it does not account for attrition or people who consume less than the average amount. In the instance of a cocktail party, not every guest will drink the estimated three drinks per person, and some will choose not to drink alcoholic beverages at all. Therefore, you are more likely to pay for items that never get consumed and could pay a higher price for what guests do order than if you had elected to pay on consumption.
If you must purchase in a packaged format, always ask your vendor what formula is being used to determine the per-person package cost and be sure you feel it is the best fit for your group's history and demographic. Or negotiate flat, per-person rates for things like coffee breaks and bar tabs so you won't stress out about on-consumption amounts going over budget.
7. Rediscover Your Own BackyardThe United States offers a diverse array of culture, landscape, terrain, weather, and convenience when it comes to planning a program closer to home. Today, guests do not need to fly to their trade show, meeting, or recognition program because there are so many choices within driving distance, right here within the continental U.S. Those who wish to hold a function farther away can do so in a shorter time frame and manage costs by minimizing distance.
Whether it is a city hotel in New York, surrounded by the best Broadway shows; a convention situated close to the Latin sizzle of South Beach in Miami; a teambuilding event against the Western backdrop of a Wyoming dude ranch; or an incentive trip sailing along the California coast during whale migration, the U.S. is a planner's playground. Major cities throughout the country have opened new properties, restaurants, and venues, which all are vying for your business.
If your group longs for international travel, explore the Americas. A wise planner will make the most of his or her budget by holding a program where the U.S. dollar value is favorable, and, right now, Mexico, Canada, and South America can provide a great return on investment based on the currency exchange rate.
And by remaining in the same hemisphere, where time changes are less severe, attendees are far less likely to be hamstrung by jet lag and can hit the ground runningboth during the event and when they return home and head back into the office.
8. Use a CruiseLike all-inclusive resorts, cruises offer similar controls for budget management. Cruise lines today may offer a la carte dining, but, all still provide a main dining venue that is included in the cruise rate. In addition, fitness facilities, pools, and other extracurricular activities are included in the price on most ships. In fact, some cruise lines are completely all-inclusive, covering everything from cigars to private breakfasts on your stateroom balcony.
As with land-based hotels, there are a myriad of cruise options that an experienced incentive house or meeting planner can present based on budget, trip length, destination, and demographics.
9. Pick All-InclusiveIt seems that no matter how hard you try, there are always unanticipated costs during a program operation. These surprises can be a planner's worst nightmarebut it doesn't have to be that way. Booking your group at an all-inclusive resort allows you to outline all of your costs up front because they are included in the room rate.
This gives guests the freedom to leave their rooms without a wallet and not worry about the inconvenience of covering additional charges.
As the budget manager, you can rest easier because your attendees will thoroughly enjoy their stay knowing they can eat, drink, and use the fitness facilities or pool how and when they want, at no extra cost to you. Be sure to ask what is and is not included when researching all-inclusives so that you can make an informed decision.
10. Guarantee Exchange RatesStrike while the iron is hot and work with your business partners to lock in their rates. This could be a particularly beneficial strategy for those with long lead times in their planning process.
If you can make deposits now on goods and services that you are buying for the future, you can prevent budget fluctuation. Many overseas suppliers are willing to agree to this in order to lock in business.
Corporations have recognized that the economy and public perception are now prevailing factors in their decisions of how and when to conduct their business functions. However, a cease-and-desist approach is not the answer. As meeting professionals, our industry has been tasked with justifying expenses and proving ROI now more than ever. The silver lining is that there are ways to address financial and business goals simultaneously, by purchasing smarter and reevaluating your meetings. The companies that weather the storm today will be those that remain flexible in these trying times.
Richelle Taylor has worked in various facets of the meetings/incentive industry for more than 10 years. Currently, she is director of travel operations for Excellence In Motivation Inc., a full-service performance-improvement company in Dayton, Ohio. For more information, visit www.eim-inc.com.Originally published June 1, 2009For more ideas, tips, and tools for better meetings and events,
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