I am currently in the process of booking a conference for 2017. I have updated my request for proposal (RFP) and have begun sending this out to various hotels and convention and visitors bureaus (CVBs). Now I am waiting. In the past few years we have been able to get fantastic rates of $82 per night for this group of 350 people. However, we are living in a different time now.
When the economy had its downturn in 2008 meetings suffered, just like the rest of the nation. Government meeting planners were wondering if they would even have a budget to host a meeting, but we usually came through with a shoestring budget. Everyone was frightened of what kind of funding would be allocated to fund meetings. We consistently wait with baited breath for the legislature to approve our yearly budgets. We always hope that this year will be better than the last.
Hotel were not exempt from the 2008 crash. They were eager for business for about 5-6 years and would drop prices to get us in the door. They have since made a rebound, unlike the government. Currently, hotels are operating beyond where they were in 2007. Basically, the hotel business is revitalized. They haven't seen this much revenue and profit ever! This is absolutely fantastic news for the hotel industry.
Furthermore, because banks were not eager to lend during the downturn we haven't added any new properties. Loans for capital projects were incredibly difficult to find. Banks weren't lending and people weren't traveling. That leads us to our current state. We now have lots of demand, but limited supply. Meetings have started to comeback, but at a much slower pace. The transient market has gone ahead and made up the difference. It now makes up 64% of a hotel's occupancy compared to the 57% in 2005. The meeting market is at just 36% of a hotel's occupancy compared to 43% in 2005. Hotels are simply following the money.
On the other side, it has become more and more difficult for the government meeting planner. Budgets on the government side have not adjusted to the booming hotel market. So now I fear that I won't be able to find a sleeping room rate under $100 anywhere in the state. Understanding the state of the industry will be instrumental as I begin to analyze the proposals that are going to be hitting my inbox soon. I realize that my piece of business, which was heavily sought after over the past few years, is much easier to pass up this time around.
Until the government budgets catch up with what is going on in the industry, I am stuck with limited negotiating power, feverishly trying to make our $100 budget look like $1,000. Wish me luck!
What about other government planners out there? Are you trying to do more with less? Have your budgets caught up to the hotel?
When the economy had its downturn in 2008 meetings suffered, just like the rest of the nation. Government meeting planners were wondering if they would even have a budget to host a meeting, but we usually came through with a shoestring budget. Everyone was frightened of what kind of funding would be allocated to fund meetings. We consistently wait with baited breath for the legislature to approve our yearly budgets. We always hope that this year will be better than the last.
Hotel were not exempt from the 2008 crash. They were eager for business for about 5-6 years and would drop prices to get us in the door. They have since made a rebound, unlike the government. Currently, hotels are operating beyond where they were in 2007. Basically, the hotel business is revitalized. They haven't seen this much revenue and profit ever! This is absolutely fantastic news for the hotel industry.
Furthermore, because banks were not eager to lend during the downturn we haven't added any new properties. Loans for capital projects were incredibly difficult to find. Banks weren't lending and people weren't traveling. That leads us to our current state. We now have lots of demand, but limited supply. Meetings have started to comeback, but at a much slower pace. The transient market has gone ahead and made up the difference. It now makes up 64% of a hotel's occupancy compared to the 57% in 2005. The meeting market is at just 36% of a hotel's occupancy compared to 43% in 2005. Hotels are simply following the money.
On the other side, it has become more and more difficult for the government meeting planner. Budgets on the government side have not adjusted to the booming hotel market. So now I fear that I won't be able to find a sleeping room rate under $100 anywhere in the state. Understanding the state of the industry will be instrumental as I begin to analyze the proposals that are going to be hitting my inbox soon. I realize that my piece of business, which was heavily sought after over the past few years, is much easier to pass up this time around.
Until the government budgets catch up with what is going on in the industry, I am stuck with limited negotiating power, feverishly trying to make our $100 budget look like $1,000. Wish me luck!
What about other government planners out there? Are you trying to do more with less? Have your budgets caught up to the hotel?