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Planner Roundtable

ON THE AGENDA: SELLER’S MARKET What strategies are effective in obtaining value deals from hoteliers today? Leann Coppola, CMP, Customer Experience Specialist, GE Oil & Gas Terry Dougherty, CMP, Director, Benchmarc360°, Inc. Terri Woodin, CMP, Vice President, Marketing & Global Meeting Services, Meeting Sites Resource By George Seli

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or the last several years, hotels have generally enjoyed a reversal of fortune from the weak demand period of the recession. And quite understandably, they have often taken the opportunity to maximize revenue from room rates as well as surcharges and fees, while curtailing their concessions to planners. In a sign of the times, Terry Dougherty, CMP, Director, Benchmarc360°, Inc., observes that the ratio for complimentary guestrooms has gone from 1:35 to only 1:50 in some cases. “But there is negotiating power out there if you have good history and good performance,” she assures, “and I believe the hotels still are willing to negotiate some good concessions.” In the discussion that follows, Dougherty and two industry peers take up the future of the seller’s market and how planners can navigate it in the meantime.

I don’t think the pendulum is going to swing back quickly, but I definitely feel the shift in some markets. Dougherty: I think we’re beginning to see the supply slowly increasing, and the buyers are actually using more upscale select service and limited service hotels, where we’re able to negotiate better contracts for them. So I do think we’re going to slowly begin to see a shift at the end of 2017 into ’18 toward more of a buyer’s market.

FIRST-TIER CITIES WITH OPPORTUNITY

Woodin: We’ve seen much of the new hotel inventory coming on board in the past year and a half. The cities that have the new inventory are the ones that are more available. And you A SHIFT IN MARKET have cities like Houston that CONDITIONS have a high number of new Woodin: In general, if rooms but their you’re going to a first-tier he hotel is not trying to hotel demand has dropped severely city like New York, Boston, take advantage of planners because of the oil crash. or DC, they haven’t had Cities along that oil belt are many new builds and there because demand is up; where we’re seeing the most is very high demand. It is very difficult to find rather, demand is up so they flexibility with rates and concessions. And Houston availability, and of course need to drive their rates.” is an incredible destination; rates are high and concesit’s second only to New York sions are low. However, I —Terri Woodin City in number of corporate did have a lot of signing headquarters. Orlando is bonuses at the end of last also interesting because it’s year because 2016 was always in demand but they the worst performing year have so much supply that you can still find great values there. for the hotel industry since the crash of ‘08 and ‘09. So GMs are on their directors of sales, directors of sales are on their salespeople, and the owners want to know why are we behind. And FINDING VALUE IN SUBURBS AND it always takes a while for revenue management to catch up. So SECOND-TIER CITIES the salespeople are starting to feel the shift and we’re feeling the Woodin: There is a big push when clients first source to consider shift as planners, but revenue management is still driving rates. second-tier cities and the suburbs [of first-tier cities], though they

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Facilities & destinations 2016-2017 Winter

Profile for Facilities Media Group

Facilities & Destinations - Winter 2016-2017  

F&D's Winter edition, includes: Q&A with Atlantic City Convention Center's new GM, Dean Dennis. F&D A-List: Woman CVB Executives. Planne...

Facilities & Destinations - Winter 2016-2017  

F&D's Winter edition, includes: Q&A with Atlantic City Convention Center's new GM, Dean Dennis. F&D A-List: Woman CVB Executives. Planne...