Let’s return to January of 2018. The words ‘Pandemic’, and ‘COVID’ were non-existent in the vocabulary of any event planner globally and ‘social distancing’ was something you only expected from an ex-spouse. The biggest pain point facing our industry was that Marriott had officially announced it would be reducing it’s commissions by 3%, starting March 31, 2018. Other major chains were quick to follow. This immediately sparked conversations within Meetingmax about how we can be ahead of the curve and ensure a sustainable business for us and our clients, if commissions and rebates were one day completely extinct.
Little did we know these early conversations would prove so valuable 2 years later when a global pandemic would literally bring our industry to a grinding halt. We’ve spent the last 10 months working hand-in-hand with our clients and partners and finding ways to weather this storm and we believe now more than ever that it’s time for all organizations to fully review their event housing business models.
For context, traditionally most organizations offering event housing would rely on rebates and commissions post event as their main, or only revenue stream. Everyone knows the headaches that come with this; having to carry the cost of your services without revenue, waiting for hotels to slowly report and pay final earnings, and the dreaded post-event reconciliation process that saw people seeing spreadsheets in their nightmares.
What COVID-19 has shed some light on is the liability that organizations following the above model suffered, and will continue to suffer through unless they are willing to explore alternative business models. We see the future of housing being more revenue up front. This can be achieved through a number of ways, individually or in combination;
1) charging guests a nominal non-refundable fee at the time of booking;
2) building a housing service fee into the cost of registration;
3) charging clients a deposit or fee to offset the cost of housing operations
The above models are some of the new ways we see organizations looking at housing operations moving forward. One thing that has come from the pandemic is an opportunity for organizations to turn housing operations from a service offered, to a revenue generating function of their business, helping to ensure longevity and set us up for any future disruptions.