If you’ve heard it once this year, you have now heard it scrutinized at just about every industry networking event imaginable! First was Marriot, then Hilton followed by InterContinental Hotels Group, and more recently Hyatt made the same announcement. The common questions are ‘do you think this is the beginning of the new normal’ and ‘what have you done to make sure you are reaching targets and making revenue?’
As technology leaders in Event Housing Management, we are often asked these same questions. Event planners hotel commissions have been cut from 10% – 7%, and there seems to be a lot of advice from a lot of sources on what to do.
Do NOT Panic – Ok, so things have been shaken up a bit but this happens all the time in the real world. Business models change, fees increase and commissions decrease but instead of panicking we can rather choose to embrace the change and work with it.
Do NOT fight the change – Sometimes change that is forced upon us is exactly what we need to do some inward reflecting. Have you been working with the same fee structures for your services since day 1? This is the perfect time to look at restructuring how you make money, what your fee structure is and what your service offering looks like. You might consider offering your clients the commissions you used to get and move to a fixed fee based on a specific service model such as a fee per reservation or a fee per room night booked. You need to be very specific about the time and efforts that go into your services because when your clients clearly understand your processes they are more likely to pay the asking fees.
Do NOT be a softy – Go in hard when negotiating with your hotels. If you don’t ask you don’t get!
Spend time negotiating comprehensive complimentary policies, push for additional bonuses such as suites, staff comp rooms, complimentary wifi, complimentary parking, 1hr free welcome reception, various upgrades, discounts on AV and banquet menus. Show the hotel the value of the audience you are bringing to their business and negotiate better hotel contracts.
Do NOT watch the audience disappear – It’s time to own the audience. You have to get the monopoly of the audience to flow through your business. Room block management is a science and is key now more than ever. Instead of watching your attendees check in out of the block get to know them on a deeper level. Understand what your audience is telling you!
Show your attendees the value in staying at the official hotels in the official room blocks. Offer them extras that they know they would have to beg for when they book directly with the hotel! Provide your attendees with things they never even thought they could have while staying at X hotel.
Do NOT be shortsighted – There are many many hotels out there that want your business. If you can offer a variety of hotels and room types to suit diverse attendee profiles you are more likely to fill your room block. There are multiple chains and stand-alone properties that are still providing the 10% commissions. If they are equal to or better for the customer, use them!
Do NOT overlook the power of your housing software – Use the reporting systems in your housing software (and if you don’t have comprehensive reports available it’s time to consider better software) Make sure you are using your own housing system instead of relying on the hotels. This will provide you with full control over your inventory, hotels and allow for proper tracking of your commission. You can drive the behavior you are looking for from your guests.
Oh, and did we mention Do NOT Panic? – We will say it again, worry less about commission cuts and more about bringing new business! While others are stressing about how they are going to make up for the commission cuts you can swoop in, take the business and offer better services!