Group Rates: A Crisis for All

The scenario goes like this: the meeting / conference / reunion / tournament planner, after weeks of research, site visits and negotiations, books their group event the hotel or resort which is best able to meet their needs. They take a sigh of relief, comforted that the space and date is now confirmed, and then begin pondering the other details. They've moved on to setting the agenda, soliciting attendees, and arranging off-site events. Still months away from the arrival date, they haven't talked to the hotel in a while. The planner thinks everything is fine and intends to work out menu and room setup details a few weeks in advance - not yet.

Then, a couple months go by and now we are about 6 to 8 weeks out from arrival and the calls start coming in...one or two, then three or four more, complaints about the group rate being higher than the hotels regular rate. Why?!?

Here's what happened: attendees who are making their travel arrangements have called the host hotel for group rates. But, they are trying to minimize their costs (who isn't these days), so they also go online to check other nearby hotels' rates. They are thinking, "I can find something cheaper, nearby - I'll have a rental car anyway - so why not save a few bucks." A few clicks later, their thought is, "huh? that doesn't make sense?". They've found a room at the same hotel, same dates, for cheaper online. Momentarily they wonder why, but that wonder quickly changes to excitement that they've scored a deal and they quickly confirm that great rate. After the confirmation number pops up, they call the planner and mockingly compliment them on the "group discount" they negotiated. Now the meeting planner is just plain angry and their next call is to, guess who, that hotel sales person they haven't talked to in six months.

What happens next is the million dollar question. The hotel or resort has all sorts of options depending on the nature of the group, history, future potential business opportunities, contractual details and perhaps most unpredictable - the judgment of the sales manager and/or higher ups. Some hotels will quickly fold, reducing the group rate to match or slightly beat the online rate. Others will offer some completely legitimate explanation or completely illegitimate excuse. Nonetheless, at this point the client is ticked, as is the sales person, because there are bumps in the road at a point when the planner wants to be focused on other details and the sales manager wants nothing less than to offer concessions after the contract is inked.

If this sounds like a dilemma you have a faced (from either side of the table) plan on attending the Virginia Association of Hospitality Sales & Marketing Professionals seminar and networking event this Thursday, June 4th, in Richmond. Details and registration form at http://www.vahsmp.org. Or, just follow this blog and I'll post some best practices after the event.