In the jargon of the meeting industry, perhaps no other term is used more today — or more inaccurately — than “partners.” Meeting planners and hotel executives invoke it to characterize one another and suggest harmony and synergy. But the truth is that such harmony and synergy do not exist often enough in any sort of enduring way.
John Branciforte, area director of sales and marketing at the Wyndham Grand Orlando Resort Bonnet Creek, acknowledges that underlying reality while politely understating it: “At times, we have an adverse relationship that we don’t need to have.”
That “adverse relationship” has only been exacerbated over the last two years by a swing of the proverbial market pendulum to what both sides describe as a seller’s market.
And it is the very notion that such a thing as a “seller’s market” exists in the hotel industry that is at the root of the larger problem when it comes to seller-buyer relationships and genuine acts of partnership.
Michael Dominguez, senior vice president and chief sales officer at Las Vegas-based MGM Resorts International, cites the frequent invocation of a “seller’s market” as the source of a long-standing and fundamental conflict between meeting planners and hotel salespeople.
“When we talk about why hoteliers and planners are not better partners and we’re not working better together, that notion of a ‘seller’s market’ is one of the biggest reasons why,” Dominguez says. “I wish that our industry, and especially those organizations that shape industry dialogue, would start to understand that we are the only vertical industry that talks about a seller’s market or a buyer’s market vs. the market — in other words, supply and demand, which are the two things that drive all markets. And, by always talking about what kind of market cycle we’re in, we pit ourselves against each other, regardless of which cycle we’re in.”
In other words, he says, the perception is always that one side or the other is taking advantage.
“The meeting industry has become more of a business-to-business environment than a people-to-people environment.”
— David Abers, CMP
Although he believes that the idea of a seller’s market is a dangerous misnomer, he does acknowledge that its perceived existence takes a real toll.
“When we’re in a so-called ‘seller’s market’ cycle, like we are now — meaning high demand and limited supply — when we’re in front of a customer, we tend to be ‘selling’ them instead of taking the time to find out what their pain points are and what they really need,” he says.
That is one area where most hoteliers can improve their overall performance, he adds, by becoming more empathetic rather than being in “sales mode.”
Another element of the current conundrum is what Dominguez calls “the elevator pitch.”
“I’m not a believer in the elevator pitch,” he says. “That’s something I talk about often at industry events. The elevator pitch means that if you’re stuck in the elevator with a meeting planner and you’re riding down 50 floors, by the time you get to the ground level, he or she should know everything about my hotel that I want them to know.
“The challenge with that in today’s world is when those elevator doors open and that person leaves, what do you know about them and their business and what they need? Instead of just telling a planner who I am and what I have to offer, I need to take the time to ask them who they are and what they need and want.”
Another way of looking at that dynamic, he says, is “instead of thinking in terms of what I can sell this meeting planner, I should be asking, ‘How can I help you create better experiences at your meetings?’”
The even larger issue, Dominguez says, is “the concerns or discord that exist now are coming from our inability on both sides to take the time to understand other points of view than our own and to understand what each other’s objectives are.
“And, for meeting planners,” he continues, “their concerns always start with their pain points. But as hoteliers, we don’t start the conversation there often enough. On the other hand, if you do start with that, and the planner tells you his or her biggest pain point is their budget, then it’s going to be very hard for me to tell you that you’re going to have one of the most tech-savvy and successful meetings in one of my hotels next year. But at the same time, I have a responsibility to tell you honestly and candidly what you can accomplish on the budget you have.”
Branciforte concurs with that point. It is particularly frustrating to him that planners often do not understand that prices are dictated by market conditions and a hotel’s operating margins.
“We still see planners who come in and say they want $75 [a gallon] coffee,” he says. “That doesn’t exist anymore. That’s just one example of how many planners have preconceived notions when it comes to costs. So they say in their RFPs: ‘Here’s my budget, and I’m not going to spend more than X.’ But they’re not really looking at what the market data for the destination says. They’re trying to come in and bid room rates that are $50 a night below what the market is getting. And, they think that’s OK.”
Yet another increasingly prominent issue that makes it difficult for hotels and planners to create and maintain meaningful partnerships is what Branciforte calls “time poverty.” That means people on both sides are often too busy to take the time to create and build genuine relationships, as opposed to simply completing transactions.
For example, Dominguez says, a surprising number of meeting planners at small and mid-sized companies plan as many as 50 or more meetings and events each year.
“If someone is planning that many meetings a year, I think it’s going to be very difficult for them to be able to give each one the attention to detail it needs and deserves,” he says. “And, based on what I see as significant differences, in terms of market knowledge, between those who plan very large meetings and those who plan small meetings, time poverty is one of the key differentiators.”
Planners of major meetings, he notes, generally plan only that one event and have substantial support teams that handle individual aspects of the meeting, such as room block management or onsite activities. They also typically have a much longer planning window.
Planners of small meetings, on the other hand, often handle all aspects of the meetings alone. And, they usually juggle multiple meetings that are all being planned in an abbreviated time window. The result: extreme time poverty that damages the overall process of meeting planning and synergistic relationships with hoteliers.
Making matters even more challenging, Branciforte says, is that these days, meeting business is largely conducted via email and electronic RFPs, which include minimal, if any, human contact or real communication.
“My salespeople and I strive to understand who our constituents are and what they’re trying to achieve with their meetings,” Branciforte says. “That’s a lot harder today because of everything being handled electronically. As a hotel salesperson, you have to work harder to extract the information you need because an RFP cannot speak.”
David Abers, CMP, events account manager at independent meeting planning firm ITA Group in West Des Moines, Iowa, agrees.
“The meeting industry has become more of a business-to-business environment than a people-to-people environment,” he says. “I’m more of a people-to-people person. But 90 percent of my business is done by email.”
Veteran third-party planner Lori Kolker, founder and president of Elle K Associates in Rockville, Maryland, also strongly agrees that email has become the bane of the industry. Seventy percent of her meetings are now planned via email.
“I hate that,” Kolker says, who spent seven years in hotel sales before launching Elle K. “I’m very old school. I believe in real communication and real relationships. And, you can’t have those things if you conduct business via email. When I started as a planner 22 years ago, nobody used email in the hotel business. They picked up the phone and called you. Now that kind of communication is basically a thing of the past. That hurts all of us — planners and hotel people.”
For hotel salespeople and meeting planners who truly want to develop genuine partnerships, Branciforte says the important thing is to push beyond the barriers of electronic communication and have actual dialogue by phone or, ideally, face-to-face during a site visit to the destination.
“For that reason, I push my salespeople to find the avenue by which we can get that dialogue going and find out more about what the planner needs and wants. My view is we need that in order to provide a meaningful and detailed response to what is typically a ‘flat’ RFP,” he says.
Kolker applauds Branciforte’s initiative. “I wish more hotel salespeople would pick up the phone and call me instead of trying to do everything by email,” she says. “In the defense of hotels, there are a lot of meeting planners who say, ‘I don’t want to be bothered. Just email me the information I need.’ But I wish they wouldn’t do business that way.”
Equally as detrimental to the overall process as emails and electronic RFPs is the fixation meeting planners have on the holy trinity of meeting metrics: dates, rates and space.
Because so many planners rely on that simple formula for assessing a hotel’s viability, and the initial response is by definition quick and electronic, Branciforte believes the process is now too narrowly defined at the outset.
“If those are the only metrics you’re going by, then you have an initial process that is flat,” he says. “From the hotel side, I think the hardest part of the process now is to get planners to actually engage and go beyond those simple metrics.”
Abers agrees that the dates/rates/space parameter is now “the essence of the process.”
“Quite frankly,” he says, “if we’re doing an RFP and three hotels come back with the dates, rates and space we need, we might go visit those three hotels and talk to people. And, that might become the deciding factor. But as the starting point, it is now just about dates, rates and space.”
Branciforte says a related issue, particularly when it comes to third-party planners, is they increasingly send RFPs to multiple hotels in various destinations, meaning that the hotel is not just competing with other hotels in Orlando, but numerous other properties in Florida
“That really is nothing more than a ‘data collection’ mode, with that data being presented back to their client as a way to start narrowing down the meeting host’s options,” he says. “That makes it increasingly hard for the hotel, frankly, because you’re no longer being treated as a resource. You’re just one of six hotels being considered in each of six different destinations. That, unfortunately, changes the entire process from the very beginning. You’re no longer just competing in your local market. You’re now competing all over the place.”
Abers also concurs with that opinion. “We’re a third-party planning company. So we do a lot of legwork before we even send out RFPs,” he says. “We sit down with our clients ahead of time and go over possible destinations. Then we narrow it down to types of hotels — five-star, four-star, a resort — we send out a limited number of RFPs.”
Finally, as if any other contributing factor were required to make the fostering of “partnerships” any more difficult, there is what is widely perceived by meeting planners as a declining level of experience and professionalism among hotel salespeople since the Great Recession, when many veterans left the industry as it melted down.
“I agree with that perception 100 percent,” Kolker says. “Many hotels have replaced truly professional and knowledgeable salespeople with younger ones who are just order takers. They just send you their bid. They do little or nothing to actually try to help you. Then they say, ‘That’s our offer. Take it or leave it.’
“That is very frustrating because our business should not be conducted like that,” she continues. “The real problem now is that the order takers just throw out information. ‘This is our meeting room rate. This is our food and beverage minimum.’ They make no real effort to understand me and what I need.
“My RFPs are very specific. I spell out exactly what I want and expect, and what the deal-breakers are.”
And, she adds, that damaging dynamic was further enhanced in 2018 by a strong seller’s market.
Abers questions whether lack of experience or professionalism are really the issue, but he agrees with the larger point Kolker makes.
“We do get the salespeople that say, ‘Take it or leave it,’” he says. “That’s really an indirect reaction to the market. If you look back to 2011 or 2012, hotels were extremely flexible in terms of accommodating all of our needs. Now, it is more of a ‘take it or leave it’ approach, and they say, ‘If we don’t have a definite answer by the end of next week, we’re going to sell the room block to somebody else.’”
Abers adds that mentality is increasingly common in the current seller’s market.
As an industry leader whose role stretches far beyond his job as head of sales for MGM Resorts International, Dominguez believes that both hoteliers and meeting planners should aggressively and consistently pursue more meaningful dialogue.
“Each of us needs to understand the objectives and strategy of the other. Planners need to understand that on our side, those things are not always the same. Year by year, they can change, based on market conditions,” he says. “But I find that if both the planner and the hotel can take the time to talk about their business and their needs, and ask each other questions and learn from each other, then you start to have a genuine relationship. Once you have a real relationship, then you can start thinking of each other as real partners.”
Branciforte notes that such issues have become a widespread area of concern and conversation in the industry.
“Everyone, including organizations like MPI, is talking at the same time about these issues,” he says. “And, we’re all kind of saying the same things. I really believe what we — planners and hoteliers and the industry — want is to find a balance based on dialogue.
“But, I go back to my point earlier about electronic RFPs and email communication. When you’re doing business by just pointing and clicking, you’re doing more to derail the whole process then you are to help it.”
When it comes to the notion of real hotel-planner partnerships, Abers proposes a more fundamental solution, which places the onus squarely on the shoulders of hoteliers.
“The main issue is dealing in fairness and appreciating loyalty,” he says. “By that I mean we, as planners, were there for you, as hoteliers, when the market was down. But now the market is trending upward. And, you’re telling us to ‘take it or leave it.’ To me, it’s all about fairness and loyalty. Fairness and loyalty work both ways.” C&IT