[ Conferon Perspective: Simple Solutions ]Simple Solutions
for a Complex Problem

by Bruce Harris and
Brad Weaber
Among the never-ending list problems that confront meeting professionals, few are more vexing than shrinking room pickups. Imagine the frustration of a meeting manager who discovers, after a convention, that pickup was 30 percent to 40 percent below the contracted block... despite the fact that attendance hit an all-time high! By the same token, few things frustrate a hotel sales manager and front office manager more than an inaccurate forecast of guest rooms actualized. The problem is everyone's problem.

Why be concerned with pickup, some might ask, if attendance surpasses goals? For one thing, it costs money in "lost" comp room nights. And, in a worst-case scenario, it can trigger increasingly severe attrition penalties which are dollars that eat away at the foundation of your association's operating revenues.

Among meeting managers, it's common practice to point the finger at housing bureaus. But the problem will not go away until we focus on the real culprits. Housing bureaus, while certainly not perfect, are not the sources of the problem. The source, instead, is a multiheaded monster that includes hotels, exhibitors, show management, attendees, travel agents and the beloved "800" number. (See accompanying box.)

While there is no single answer, we are offering new ideas on how to "go beyond" the giant step that was taken two years ago with the publication of the PCMA White Paper on Citywide Housing. Cheryl Nordstedt of the American Academy of Dermatology, who chaired the committee, documented her association's success (Convene, April 1992) in overselling the hotels' room blocks.

This practice does not condone "walking" guests; instead, it recognizes the challenges faced by convention hotels, many of which regularly experience a 15-percent to 25-percent "no-show" factor on rooms booked by the 30-day cutoff. As a result, it's no surprise that hotels are forced to "overbook" if they want any chance of being profitable.

To maximize pickup, meeting sponsors should attempt to "partner" with hotels to allow the group a percentage of the planned "oversell." For example, if the group block is 500 rooms and the hotel's projected oversell is 15 percent (75 rooms), the group might negotiate to be allowed to accept reservations amounting to an extra 10 percent of its block (550 rooms).

By developing a "partnership" that allows the sponsor to manage the block until the cutoff date, meeting sponsors will gain greater control over changes caused by cancellations or substitutions. That alone will increase the yield on room pick-up. This process alone would allow more members of your group to go to their first- or second-choice hotels and would significantly decrease your chance of having no-shows.

There are a number of other procedures that also need to be implemented. For example, it should be agreed that the names of all "sub" groups meeting in the hotel over the convention dates be submitted for your review. If you can attribute any of them to your convention, the rooms should be credited to your block and counted toward the comp policy. (While the White Paper disagrees, we feel that the acid test of comp credit lies in the premise that were it not for the association meeting and the time and dollars expended to publicize the event, the rooms would not have been booked in the first place.)

The Six Sources of Shrinking Room Pickup

Hotels:
Do not allow for replacements for cancellation... unless they need the business;

Do not allow changes or substitutions... unless they need the business;

Permit "sub groups" to book outside the block; and

Do not attempt to qualify if individual reservations are part of the group. (Note: There are many hotels that do an excellent job in partnering on these issues – unfortunately many don't.)

Exhibitors:
Will not use a system that restricts their block or takes away their comps:

Block more rooms than they need and release rooms inside the cutoff date; and

Reduce number of comp rooms for the association when they book outside the block.

Show Management:
Doesn't update reservation literature, thereby promoting hotels that are already sold out:

Does not get information to attendees in a timely fashion;

Does not institute contractual booking policies relating to overbooking, substitution, returning canceled rooms, etc.; and

Has ineffective exhibitor housing policies.

Attendees:
Use corporate rate and don't identify convention attending; and

Search on their own for preferred hotel and don't cancel first reservation.

Travel Agents:
If a group is not commissionable (because someone else has booked the business), some will intentionally go outside the block, regardless of rate, in order to protect their commission.

Hotel Central Reservation
Systems (800#'s):
Sometimes offer lower rates than the housing bureau; and

Reservation agents are restricted to booking groups of nine rooms or less. So an exhibitor needing 30 rooms books three groups of nine... and one of three. None of these rooms are credited to the sponsoring group.
Another potentially more serious problem occurs when "corporate" members of an association receive a rate better than the "group rate" because of "volume" contracts. These rooms never show up in the block; even worse, the "preferred" rate can make the planner look bad to association management and members.

Exhibitors typically are most associations' largest source of meeting income. Shouldn't they be entitled to better treatment? One solution that has worked with some housing bureaus and private housing services is to designate a special exhibitor housing manager. But regardless of which housing system you use, develop a solid plan to bring exhibitor housing back into the block. Your plan may include:

  • Securing additional perks in hotels for exhibitors who commit large room blocks. These perks could consist of a comp suite, a comp bar in a hospitality suite, upgrades to concierge floors, free or discounted meals in hotel restaurants or some other benefit for booking reservations through the association's block. (This is the carrot to entice exhibitors back into your block. Most hotels will provide these perks at no cost.)
  • Send meeting announcements to exhibitors first... but stipulate that they must send their exhibit space deposit before booking any guest room.
  • Set aside a large block at the primary hotels for exhibitors for a limited time (say two months). Once filled or the time period has elapsed, additional exhibitor personnel can join attendees on a first-come, first-served basis;
  • Require non-refundable deposits, 45 days out on all rooms they reserve. Last, but certainly not least, in the housing puzzle is the attendee. One statistic that's constant is that the further away a hotel is from the convention center, the higher the no-show percentage. That probably will never change. But meeting managers need to give attendees ownership over where they sleep.
  • Here's why: A high percentage of attendees assigned to their fourth choice or lower will circumvent the housing system to obtain a room in a "preferred" or more convenient hotel. Then, to compound the problem, they will fail to cancel the reservation assigned by the bureau, thus causing "no-shows." Talk about double jeopardy!

As an alternative, limit choices on your reservation form to three. If, when the reservation is returned, none of the three are available, refax the form listing only hotels that still indicate availability. This "reselection" increases the likelihood that the attendee will honor the reservation. And isn't that, after all, really the only way to maximize pickup?
Bruce Harris is president of Conferon, the nation's largest independent meeting planning firm. Brad Weaber is the senior account executive in the company's Washington, D.C. office.

First published in: Convene Magazine, March 1995