Trish Haudricourt calls it "a personal challenge," but it sounds more like meeting planner hell: Thirty days before Harley-Davidson's big-gest meeting of the year - the new product rollout for 5,000 dealers - Harley's manager of meeting and travel services is a whopping $300,000 over budget. It's not her fault, mind you - with her budget frozen at last year's figure, Haudricourt simply cannot find a way to create a meeting of acceptable quality with that amount, given that this year's meeting is both a half-day longer and in a far more expensive destination.
"We negotiated the best we could, and we scaled back whatever we could, and we're still over by that much, mostly due to transportation and food and beverage," she sighs. "I'm out of options. I have to make my case to the boss."
Fortunately, her boss listened. "She decided that the whole sales and marketing team will take a look at where they can borrow from other project budgets. It's a good solution, because this event is so important," Haudricourt says.
All's well that ends well, but you may not be so lucky. If you're one of the countless planners who, thanks to the tanking economy, must now create events with the same - or even less - money than last year, you need to know how to get by without making your event look like it's been gutted. Here's what some experienced planners are doing in the maddening quest to stretch meeting dollars as far as they can go.
Dropping the Hammer
Despite the strength of the economy over the past seven years, it's not as if most planners had carte blanche with their organizations' checkbooks. "I think planners have been budget savvy for some time," says Richard Harper, vice president of sales for the MGM Grand Hotel & Casino in Las Vegas. "Throughout the 1990s, they were conscious of balancing the priorities of keeping on budget and meeting their management's expectations. Customers have always come to us saying, 'I have X dollars to spend - show me how I can get the most bang for my buck.' "
But the difference this time around is that planners, in order to keep to their budgets, are being forced to cut into the quality of their meetings. So the biggest challenge is to find ways to keep attendees from noticing any compromise in quality.
Unfortunately, some changes are impossible to conceal. Joanne Folz, a 16-year veteran of Estee Lauder's planning department who now works as an independent, says Estee Lauder throughout 1999 and 2000 cut back on the number of meetings, and reduced the length of some of its biggest events more than once. "We had educational meetings that initially took place over five days, then four, then three, then two and a half," she says.
As for her current corporate clients, Folz notes that they're changing their airline policies to take advantage of the lowest fares, whether it be through using more Saturday-night stays, renegotiating their airline contracts to waive Saturday-night stays based on volume, or flying people in at whatever times the airfare is cheapest rather than whenever is convenient for conducting business. "People will fly in that morning to save on a hotel room," she says. "Until recently, companies were more sensitive to employees than to make them come into a meeting tired. That's changed."
Laurie Costa, director of national accounts for Downtown New York Marriott Hotels, adds, "In the last four months, we've had a lot of double occupancy for meetings, which I really haven't seen in many years," What's more, once these tired and privacy-starved attendees shuffle into the meeting room, they are often sitting through presentations that lack the sophistication they once had. "We've told our speakers to adapt their seminars for slide shows or overhead projection, because we right now cannot provide LCD projection for them," says Janet Bar-David, director of meeting services for the American Healthcare Institute, in Easton, Massachusetts. "It's a devastating change for us, but we have no choice. One projector can cost almost 800 bucks a day."
And when the meetings end for the day, recreational opportunities are not being offered as abundantly as they were 12 or 18 months ago. "Spa services are getting cut back quite a bit because they are high-ticket items," says Marc Kent, a director for independent planning firm Meeting Services, based in Mamaroneck, New York. "Golf outings we still continue with, and tennis too, as they are both important to business. We just make sure they are kept under reasonable cost control. But we won't resort to doing beach olympics. Yes, it's cheap, but it's a bad idea. Physical injuries and people losing face are entirely possible." On the other hand, he now plans more outings that involve both attendees and spouses. This way, people spend more time with their spouses while the firm reduces its cost for creating separate spouse programs.
Aside from those high-profile meeting elements, there are many other areas where planners must finagle, cajole, and simply get creative in order to make the numbers agree. The good news is that there are many ways to cut costs without having attendees notice a change in meeting quality.
Harley-Davidson's Haudricourt has used every negotiation tactic she could think of to stretch her budget, and has largely succeeded. First, she says, "We emphasize the totality of our business with a property to get discounts, to lower their profit margins in each area." For her annual winter dealer education conference, she has entered into a four-year contract with the Opryland properties. The 3,500-person event will go to the Orlando, Florida, property in early 2002 and 2004, while the 2003 and 2005 events will use the Grapevine, Texas, property.
The MGM Grand's Harper knows firsthand that "everybody is looking for value through volume-business discounts." He says that 70 percent of his meetings business in 2001 comes from repeating groups.
After gaining leverage with a long-term deal, Haudricourt then seeks to lock in rates for the major meeting elements. "We start well over a year before the event to negotiate for either a freeze or a small percentage increase over room rates and food and beverage prices at that moment," she says. "Our group histories are very important to this process." With such an agreement, both sides gain: The property knows exactly how much revenue it will derive, and the planner can budget with certainty. "We start by offering a percentage increase for each area, and negotiations go from there."
From the supplier side, Harper notes that "fixed percentage increases twelve months out are common, and we are amenable to them. But though most of our clients want to freeze room rates and catering prices, they don't talk much about spa and audiovisual prices," which is a bit surprising.
Far from being content with her progress, Haudricourt persisted and found another wrinkle to bolster her savings. "Opryland's Orlando property has its grand opening in early February of next year, but we'll be there over the third week in January," she says. "We're the third group in on the soft opening," which is something hotels and resorts welcome, since it lets them generate revenue before every detail at the property is perfected for the general public.
Harper adds that properties that aren't brand-new can also offer built-in value on many items that a group would otherwise have to pay for. Like other Vegas properties, "MGM Grand has a lot of the fun and entertainment infrastructure right here," he says. "So you don't have to spend money for that - or to create themes, decor, or props - if you don't want to."
Sweating the Small Stuff
When it comes to the nitty-gritty elements of meetings, there are an amazing number of ways to surreptitiously scale down quality. With a fistful of dollars to work with in the past few years, "We planners had a tendency to try to outdo ourselves and make ourselves look good," says Kent. "But now, when we get a reduced budget and show the client how we are going to adapt to it, the client asks, 'Will it look good?' Our reply is that the event can still be 95 percent of what it would have been had we spent a lot more."
For instance, with cocktail receptions, Kent cracks that "beluga is out, lumpfish is in, and we no longer have six lobsters smiling at each other over a huge piece of ice." Folz concurs with that sentiment: "We were doing these huge seafood displays not two years ago," she says. "Now we don't display anything. Instead, we have hors d'oeuvres passed around on trays," which means that less food is consumed, and less food is wasted, but attendees are still satisfied. "That change alone is a big money-saver," she adds.
Kent also makes sure to find out if the property has a regular happy hour in its bar or lounge that his reception can piggyback. "For a very small amount of money, a hotel can duplicate its happy-hour menu for the larger group," he says. Further, what's often billed as the cocktail "hour" prior to dinner is increasingly being squeezed to 30 or 45 minutes; traditionally longer receptions may even get chopped by a full hour.
Not surprisingly, alcohol policies are changing as well. "I've had bar bills that were simply embarrassing in the past few years, and that element really got slashed this time," says Folz. The open-bar reception that serves quality liquor is becoming a rarity these days; Kent uses only well wine and liquor, and Folz has had events that offer wine and beer only. "We still have people who prefer the higher-priced liquor, and we urge the waitstaff to succumb to those wishes on occasion," Kent adds. "We don't expect to see that on the bill, considering the amount of money we're spending with them. And if they must, the hosts can pour lightly."
For sit-down meals, organizations are moving away from elaborate design elements for items such as table settings. Many groups now use a table-topper rather than a full-length drape, and centerpieces consisting either of fresh-cut flowers that are in season locally or potted plants that can be reused. "We brought in plants as centerpieces for breakfast and lunch," says Folz, "and the only people who noticed said they thought we were just creating a theme."
Marriott's Costa is finding that groups won't even use a separate room for luncheons. "They want it only if a room becomes available at the last minute; they're not willing to pay the rental fee for more space."
As for the food itself, "We never order or pay off the published menu," Haudricourt says. "We ask the chef to create dishes not on the regular menu, and we can see a four- to five-dollar discount per plate. It's actually a win-win, because I think chefs like to be more creative. Get in good with the convention services person and the chef, and they'll want to help you." At a recent Harley-Davidson event, lunch was scrapped in favor of brunch, and rather than serving tenderloin steak as the central dish, the chef offered a petite filet.
And for big presentations these days, many planners are not hauling in new, custom-built staging. Instead, companies are storing stage elements they've used for past events, and simply altering peripheral elements to create a different look. Some planners also explore the host property's storerooms and choose from that selection of props, which eliminates shipping costs as well.
After all the negotiating is completed, the event takes place, and the bill arrives, Kent throws out one last offer many properties simply can't refuse. "We'll say, 'I can pay this entire bill before we leave the premises - cash on the barrelhead," he confides. "That way, they won't have to chase us for 60 or 90 days while we go through the usual payment process." The trade-off? "We also tell them exactly what that money would have yielded us if we held it for 60 or 90 days. So it's their choice: If they deduct that same amount from the bill, we'll cut them a guaranteed check on the spot. This makes the salesperson look like a hero to his financial people." And though it may not sound as if the benefit is worth the effort to persuade your executives to allow this tactic, "The savings on a one-million-dollar meeting when we discount our interest is significant," Kent adds.
When All Else Fails . . .
Clearly, planners at this moment face an enormous challenge to deliver a high-quality experience and send the right message to attendees - all on a budget that, in many cases, isn't even adjusted for inflation. So if you've exhausted all your creative ideas for saving money and the ends still won't meet, what's your last resort? "Get into your executives as early as you can and say, 'We've done the best we could, and here's the evidence to back that up. But to keep all the elements in there that you want, we need some more cash,' " Haudricourt advises. "Hopefully, they know you wouldn't come to them unless you really had to. At that point, all you can do is hope they understand."