Government Meeting Planners Rule!October 1, 2016

Rising to the Challenge of a Seller’s Market That Makes a Tough Job Even Tougher By
October 1, 2016

Government Meeting Planners Rule!

Rising to the Challenge of a Seller’s Market That Makes a Tough Job Even Tougher

ACF-2016-1011OctNov-Government_Meetings-860x418aThe stress level for government meeting planners can run high. Whether their event convenes federal or state employees, a political figure of prominence may choose to attend, along with his or her security entourage and special requests from the venue and planning team. Such was the case in 2005 for Maggie McGowan, CGMP, CMP, event coordinator for the Center for Public Management at the University of Oklahoma, when First Lady Laura Bush addressed 3,000 of Oklahoma’s K–3 teachers.

“She came in to do a middle-of-the-day session, and we couldn’t have anyone in the general session room leading up to that because they had to sweep it and have the bomb-sniffing dogs come in,” McGowan recalls. “So we had to rearrange the schedule.” The Center does contract work for various state agencies, and Oklahoma Attorney General Mary Fallin sometimes participates in meetings related to foster care, as she is a proponent of that cause. Similar to the first lady, she brings her own security, requires special entrance/exit arrangements with the hotel, as well as bomb-sniffing dogs for the larger venues.

“When we were in the recession years, government (meetings business) was really helping the hotels. …Now that it is a seller’s market again, we have kind of taken a back seat.”
— Michelle A. Milligan, MSW, LMSW, CGMP 

Site Sourcing Stress

For the average government meeting, however, most of the stress these days probably comes from site sourcing. Unless the meeting site choice is restricted to government facilities, the planner will need to go out and find a hotel or conference center partner that is interested in government meetings business, which can be a difficult task in the current seller’s market. Such meetings must abide by several restrictions that can make the business less than attractive to hoteliers receiving RFPs from corporate groups with more to offer.

“When we were in the recession years, government (meetings business) was really helping the hotels because businesses had cut back significantly on travel and conferences,” notes Michelle A. Milligan, MSW, LMSW, CGMP. Milligan is both deputy administrator/clinic director for the Third Circuit Court, Clinic for Child Study in Detroit, Michigan, and the new national president (since July) of the Society of Government Meeting Professionals (SGMP).

“Now that it is a seller’s market again, we have kind of taken a back seat. Obviously, if they can get twice the room rate than we can afford, then those private industries are going to get preference.” That challenge compounds with a higher workload in some cases, as many of those individuals charged with planning meetings for municipality employees have been faced with more site selection duties. “I think the number of government meetings has been on the rise again,” observes Milligan.

A case in point is National Center Early Childhood Development, Teaching and Learning (NCECDTL), whose training meetings, annual conference and other events are planned by Tecumseh Deloney, CMP, CGMP, senior manager conferences and meetings, with Washington, DC-based Zero to Three. According to Deloney, “We just began year two of a new five-year contract. I came off of a contract we had for 20 years in five-year intervals. When I compare that contract to this new contract, our meetings have increased somewhat. The majority of the meetings that DTL has planned are held in the DC area. However, for some of our 2017 (meetings) we’re going to go to the West Coast, as well as southern (destinations) like Atlanta or Texas. So we are beginning to branch out.”

Of course, there are exceptions to the upward trend, and meeting budgets at some government agencies are actually more constrained than what they have been in the past. For example, meetings for several Oklahoma state agencies (including the Departments of Human Services, Energy and Health) are currently restricted to training events, McGowan notes. “The budget doesn’t allow us to do major conferences at the moment. We had a 30 percent cut this year on top of a 20 percent cut last year. But there is mandatory training that has to get done.”

Spending Restrictions

Planners of state agency meetings must observe both federal- and state-imposed spending restrictions. “There are guidelines the GSA (General Services Administration) puts out, and then each state has its own guidelines. Even each county could have some additional guidelines,” Milligan points out. “They really do monitor how much you spend for conference meals and even the breaks. They also look at per diems for overnight rates. For the state of Michigan, only $75 is an acceptable overnight rate, which is pretty low. And obviously when you’re planning a conference you can usually have a higher rate, but it all depends on what your regulations are.”

Some per diem relief is provided by the latest GSA guidelines, however. “The new rates have reflected moderate lodging per diem increases, and that’s pretty much across the country,” says Milligan. “Usually if the federal government or the GSA raises per diem in particular cities, then states follow suit. They’re never going to be as high as the federal rate, but they may increase it a little bit.” The higher GSA per diem caps, she adds, are meant to help groups afford rising hotel rates, “but the rates are always cheaper than what a business would be able to pay for those same rooms.”

While finding meeting hotels accommodating such rates can be challenging in today’s market, the bidding process itself is fairly straightforward. “When I reach out and send my RFP to hoteliers, I specify ‘government per diem required,’ ” says Deloney. “It’s just like an airline (with regard to seats); they only have so many rooms at a particular rate. It all depends on the revenue manager and how many rooms are allocated at that per diem.” The number of bids to be sought is also regulated. “If it’s over a certain dollar amount, we have to go to a bid process — to at least three suppliers, in some cases five,” says McGowan. “Then once we analyze the bids and can compare everything we choose the best option, not necessarily the cheapest, but the best bang for our buck.”

Apart from per diem caps, government meeting planners also face the restriction of not being able to pay attrition or cancellation fees, which also may be a sticking point in hotel contracting. “As a state agency we cannot pay attrition (or cancellation) because that’s considered paying for services not rendered,” McGowan explains. “It’s in our contract so they have to agree to it upfront. It can make negotiation difficult.”

Neither can many government groups make F&B guarantees, and often have to pay meeting room rental fees as a result. For example, the meeting may be based on a grant contract that specifies that F&B will not be paid for. “There are federal agencies out there issuing grants, and they write into the grant ‘we will not fund food and beverage,’ ” McGowan notes. The NCECDTL does not pay for F&B either, so with the hotel’s F&B revenue needs in mind, Deloney encourages the hotels “to have a per diem menu so that the attendees can eat in their establishment, a grab-and-go such as a continental breakfast and boxed lunch.”

Planner Restrictions

Planners themselves, not only their meetings, are under certain restrictions from the municipalities they serve. They cannot accept gifts over a certain dollar amount, and cannot go on fam trips — at least those that involve lots of “extras” that are not directly relevant to their business at the destination. With regard to gifts from suppliers, “on the federal side the limit is $25 per instance, on the state side it’s $50 a year flat in Oklahoma,” McGowan notes. “So if one of the hotel partners, and they do this all the time, drop us off food, we just put it in the break room and share it with everybody.”

For planners who work as contractors for the government, attending fam trips is up to their discretion. But for planners who are government employees, the trips are subject to federal and state regulation. “On some trips, they just take you to see all the different properties and you’re not getting all the extra items. So a trip like that is OK; you’re really just learning about the properties available,” Milligan explains. “But fam trips become problematic for government employees when, for example, a CVB gets together with local hotels and take you to the opera house, and then you’re staying overnight in the hotel and having these fancy dinners.” Thus, site inspections, which are typically more “strictly business,” are more acceptable. “State departments may allow different dollars in your budget for site inspections. Sometimes you can build those into the contract, and as long as it’s part of the contract, then a site inspection is perfectly fine,” says Milligan.

Negotiation Flexibility

Given the spending caps and the inability to pay attrition/cancellation penalties or attendee F&B, government planners’ negotiation skills are often tested, particularly in today’s seller’s market. Any flexibility that will improve the value proposition for the hotelier must be considered. “What government planners have to do is either plan way out in advance, which can be difficult, because some state governments will not sign things too far out, or be flexible and look at off-peak times,” Milligan advises. “They can also look at lower tier cities depending on how big the conference is.”

McGowan finds that site searching in Oklahoma’s smaller cities and suburban areas can be worthwhile. “Especially now that Oklahoma City has a pro basketball team, we rarely use downtown hotels during basketball season. We will bid to those properties if our client wants us to, but getting a competitive bid from them is hard,” she explains. However, date flexibility increases the chances of success with a property of any tier. “If you pick the right date when there’s nothing going on at the hotel, they’d rather have a meeting they’re not going to make a ton of money on than nothing at all.”

An additional challenge to McGowan’s negotiations is that the state agency training events she plans (ranging from 25-400 participants) tend to use an amount of meeting space that is disproportionate to guest room usage — from the hotel’s viewpoint, at least. “My people like to spread out, and nobody likes to sit right next to somebody else even though they’ve been working together for five years,” she says. “So I like to have more room than technically I need or that the hotel believes I need. Either they can or can’t give it to me, and then we start the negotiation process.” In many cases, government planners will need to bring both date and space flexibility to the table, however.

Business Referrals

They also can offer hoteliers the promise of more business down the line, either from their group or other parties via connections. As to the first possibility, “you have buying power if you are holding numerous conferences on a regular basis and you can do multiyear contracts, which is guaranteed revenue for suppliers,” Milligan observes. As to the second, planners do well to consider any business referrals they can extend to the hotelier, which amounts to leverage in future negotiations. “I’ve had a lot of (attendees) come to me and ask, ‘Would this hotel accept a private party?’ And I say, ‘Absolutely, contact this person,’ ” McGowan relates. “So I get a lot of questions about individual retirement parties, wedding parties and so on. Normally I will send the email between the two, hooking the individual up with the correct salesperson: ‘This is my brother planning a bachelor party for his best friend, he needs four to five rooms on this weekend, can you help him out?’ That way the hotel knows I’m the one who initiated the contact.”

Supplier Relationships

McGowan also recommends SGMP colleagues to her hotel partners, and such industry relations are a major benefit of membership. “Our Society is based on both planners and suppliers, and they develop relationships,” says Milligan. “Oftentimes, because they do have that relationship, they are able to figure out how to reach an agreement that benefits everyone.” And while in a seller’s market many hoteliers are not so needy for planner referrals, any industry-savvy hotel rep knows that the pendulum swings and that needs can change. “When the other industries are not planning meetings as much and using as much hotel space, hotels can tap government members to bring meetings to their location,” Milligan adds.

Many supplier members of SGMP have obtained the Certified Government Meeting Professional (CGMP) designation, offered by the Society. That’s “absolutely” reassuring, says McGowan, “because then we’re all speaking the same language. When the supplier partner understands those government regulations pertaining to attrition, pertaining to per diem and room rate, they understand better where I’m coming from when I say, ‘Hey, this is all I can pay due to the rules.’ ”

Of the SGMP’s 1,800-plus members, 500–600 have their CGMP certification, according to Milligan. Individuals who wish to take the CGMP class and exam must be current members with at least six months in good standing (the requirement may be waived with documentation of at least one year of experience in the hospitality industry). Participants complete three full days of training and take the test on the fourth day. Recertification is required every three years. While there is some overlap in course content with the CMP, that’s mainly on the logistical side of planning, says Milligan. “Where the government part comes into play is on the protocol items, ethics items, GSA regulations and so on.”

Planners who work with or within state government agencies must learn and come to terms with their particular restrictions, which are more stringent in some states than others. “In Texas they can’t travel at all (for meetings), in or out of state,” McGowan relates. “So if the meeting is not in their hometown, they don’t get to go. That restriction has been in place for about five years.” Fortunately, McGowan does not have to deal with that limitation in Oklahoma. “Not yet,” she cautions. AC&F

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