Across both the meeting industry and, more broadly, the business travel industry, the economy’s return from the recession is having an unwelcome consequence: skyrocketing flight and hotel costs that are overrunning meeting budgets.
After shortening meetings, changing up activities and reevaluating who travels and how often, this year planners are turning to meeting destinations above all else as the new place to create savings in their budgets. By curating up-and-coming incentive destinations, working more closely with airline schedules and keeping internal meetings closer to home whenever possible, financial and insurance meeting planners are finding new ways to stretch their dollars while continuing to create meetings that delight attendees.
“The days of frivolous meeting spend ended a few years ago,” says Karen Alfonso, director of meetings and events for Hartford, Connecticut-based The Hartford. “It’s all about the budgets lately. Many budgets have been cut 10 to 20 percent this year, while, at the same time, costs have increased. Our priorities include doing more with less, being smarter with our meeting spend and finding creative ways to save.”
In finance and insurance firms, it’s hard to do “the same old” for incentives. Often a key differentiating factor between companies, high-quality incentives are a key motivational tool for employees who directly drive the company bottom line.
While many planners are finding themselves restricted to locations in the U.S. or greater North America, changing the focus of the trip from pure relaxation to active rejuvenation has opened up new possibilities for destinations that will both surprise the veterans who have already visited every Florida beach with you and motivate younger employees looking for the next thrill rush.
“Currently, we are only hosting domestic incentives,” explains Alfonso. “We tend to rotate East and West. Last year we were in Newport Coast, California, and this year we were in Sea Island, Georgia. Next year we will be in Park City, Utah. We’re making sure that there are plenty of outdoor activities in our venues, because we are seeing that attendees are very active and enjoy much more sports-related recreation. This year, we hosted a resort-style triathlon featuring hiking, biking and kayaking in one activity, and this was our most popular activity. Our attendees are more active than ever, though golf, of course, is always a priority.”
“Many budgets have been cut 10 to 20 percent this year, while, at the same time, costs have increased. Our priorities include doing more with less, being smarter with our meeting spend and finding creative ways to save.” — Karen Alfonso
Rhonda Moritz, marketing events planner for Syracuse, New York-based Cadaret, Grant & Co. Inc., is also largely staying in the U.S. with her incentives, but finding that up-and-coming domestic destinations offer a superior price-quality ratio that’s both budget- and attendee-friendly, while offering the active recreation opportunities that increasingly appeal to attendees. “We just went to Austin, Texas, because it’s such an upcoming great place to showcase different things,” she says. “We wanted to try to venture a little bit west of the Mississippi, but not overboard, so we decided to try Texas. We’ve investigated everything from Houston to San Antonio to Dallas to Austin, and when the Hyatt Regency at Lost Pines Austin opened a few years ago, we jumped on that, because it was a brand new property and a great name.
“The resort is 20 to 25 minutes out of town. It’s not a downtown resort, but the airport is right in the middle. It’s right along the Colorado River, which was a great experience in terms of someplace different, more rugged, but brand new with a great brand name. It had all of those advantages right from the start. We did normal things like horseback riding and trap shooting, but we also do high impact for folks that love extreme adventure. We did some rock-climbing, river-rafting and kayaking, and for medium impact, a lot of programming in downtown Austin. We also had some tours for low-impact folks, because when they get to a destination they want to explore, but some just want to sit by the beach or the pool, and that’s fine. They won it. It’s their incentive.
“A lot of companies including ours are noticing changing demographics,” Moritz continues. “But even attendees who are older and have been on 30 incentives haven’t experienced that type of resort because they’re used to Florida and East Coast properties. We want to give them the experience they won’t have anywhere else or that they won’t have on their own, and Austin was great for that, because a lot of people recognize it for its eclectic personality.”
If you have the freedom to go a little farther afield but not a lot of space in your budget, investing time to investigate the feasibility of developing destinations can still give you an edge on providing an experience attendees wouldn’t have thought to do on their own.
“Our incentives really range, from about 20 people to 2,000, so the destination depends a bit on the size of the group,” explains an insurance company meeting planner who prefers to remain anonymous. “For our smaller groups, we’ve recently done Panama, and we have a summer one coming up in Calgary, Canada. Usually someone higher from inside the company has been there or heard about it and thought it was an enticing destination. The initial recommendation comes from someone higher in the company, and then I need to check it out. For the ones that are outside the U.S., I predominantly use a recommendation from a DMC and then do my own research from there.
“With Panama, we chose it because of the tie with the Panama Canal, but the destination itself is a little undeveloped,” says the planner. “They don’t have everything that Jamaica or Mexico could offer in terms of availability and selection, but they’re really accommodating and there are a lot of interesting activities available like going through the jungle or taking a boat cruise through the canal. Attendees might not think about it on their own. Perception is a hump that you have to get over. When you do the legwork on your own, you see that while it’s not a hot spot as a destination, you can actually stay outside the city at the beach at an all-inclusive. All-inclusive is important for us, because it helps control the budget.”
As one of the leaders in the all-inclusive segment, Sandals Resorts’ Luxury Meetings & Incentives Collection offers groups a comprehensive, all-inclusive program called Luxury Included. The collection is comprised of 15 resort locations in Jamaica, St. Lucia, The Bahamas, Antigua, Granada, Barbados and Turks & Caicos. Sandals’ Discovery Dining program allows attendees to choose from up to 15 gourmet restaurants at each property, and wines from Napa and premium brands of liquor are also included. Another budget-friendly advantage of meeting at Sandals Resorts is that most activities are also included, such as unlimited golf (excluding Sandals Emerald Bay), waterskiing, wakeboarding and scuba diving. In fact, Sandals claims to offer “more quality inclusions than any other resort on the planet.” Sandals even offers a convenient “Event Cost Estimate” calculator on its website that enables planners to get a ballpark estimate for hosting their event at any of the Sandals properties as they begin the planning process.
As flights take over a larger chunk of budgets, particularly in the case of incentives, planners are beginning to look at their destinations with a more proactive approach to airlift. “Flight prices are going back up; it seems like we have to get over that mindset that everything is in the $200 range,” says the planner. “In our case, we’re not a hub of any sort, so you’re going to have to connect somewhere which makes things pricier. While this is a challenge personally, I can imagine that if you’re coming out of Newark or Chicago or Minneapolis, you’re spoiled for choice right now.
“It’s beginning to change how we chose our incentive destinations,” the planner explains. “The last thing you want is to have a 10-hour flight, whether it’s for fun or business. We usually have one or two people from each state, and though we obviously don’t operate in every state, it still gives us 20 states to work with. It’s pushing us toward less remote destinations. We’ll choose a standard hub rather than go to a smaller city that doesn’t have the exact flight times we need. With the airlines (merging), this is a big issue. It seems like there’s less and less flight availability. You can only leave and return a few times a day.”
“You have to consider travel,” Moritz agrees. “You have smaller cities that have stopovers, and the flights are not as cooperative as they would be from Newark or Philadelphia, where in most cases you can do direct flights because those cities and Atlanta are the connector cities for major airlines. For our incentive, we only have them Thursday to Sunday, and we want to maximize their time, so we don’t want to go too far where it’s an eight-hour travel day there and home.
“That’s why you have to do research early,” she explains. “I’m looking at 2016. I can’t get the flights yet, but I can look at the schedules for April 2015 and see there are only three flights per day and they leave at 5:45 a.m. and get there at 3 o’clock in the afternoon and go through Chattanooga, Tennessee. When we put together a presentation for company executives, we can say, ‘We like the property. It’s got a great deal, but here are the cons: this price, this distance from the airport.’ If we know the transfer is going to be two hours, it’s not worth our time, even if it’s a great opportunity to get guests places they haven’t been.”
Because flight prices and schedules are making many destinations less feasible for incentives, many planners are turning to cruises as a way to take attendees to several diverse destinations and types of activities in one trip with just one flight to a hub airport with a cruise port, such as Miami or New York. And cruise lines are adapting to accommodate. For example, Celebrity Cruises offers attendees free gratuities, free beverage packages or up to $300 per stateroom to spend on board. Planners are given membership to the Captain’s Club loyalty program.
There is one silver lining to the high prices coming out of the main domestic airlines now that they’ve consolidated — Northwest Airlines with Delta, Continental with United, and now US Airways with American Airlines. Reliable smaller airlines with networks developed enough to include both business and leisure destinations are offering planners good options both in terms of price and schedule. “We were in Austin last year, and it’s been working out well because those smaller cities are getting those smaller airlines that are friendlier for going to the destinations we go to now,” says Moritz. “Eleven years ago when I started with the firm, these airlines weren’t there or weren’t going where we need to go. You were at the mercy of Continental or Delta in terms of schedule, number of flights and layovers, the things we look carefully at.”
While planners naturally have to find attractive destinations for incentives, small internal meetings are less about the destination’s attractions and more about its convenience for attendees. Increasingly, rather than choose a central place to gather employees from around the country, planners are keeping meetings close to headquarters or regional offices as much as possible and organizing more meetings in more locations to keep travel time and cost to a minimum.
“Meetings of fewer than 100 attendees are being especially scrutinized,” says Alfonso. “The first priority is to try to host the meeting in one of our offices rather than hold it offsite. Last year, we were already condensing meetings and packing more in during the duration of the event, and we are not really seeing any other changes in the format compared to last year, though we are also trying to find efficiencies by bundling meetings together in order to leverage our spend by sharing AV, production and guest-speaker costs, and combining meals. Needless to say, meeting planners are working harder than ever to find cost efficiencies.”
“We do a lot of things locally,” the anonymous planner agrees. “The really small ones we try to keep in the area, close by, both because we have lower costs in our area and because it’s close to where a lot of corporate people would come to work, and the people coming in are manager level or below, so it’s easier for them to drive in. But we have noticed we are adding more meetings, which is a good thing.”
Moritz is in the process of a test year to evaluate a new way of completely restructuring the locations of her small meetings. “For our small meetings, people do travel. We used to have them in two locations: the home office in Syracuse and the smaller regional office in New Jersey where I’m based,” she says. “We’d invite financial advisors from the surrounding area codes. For Syracuse, we’d do New York excluding Long Island and Westchester, and also offer meeting details to northern Pennsylvania. And for New Jersey, we had a wider range: New Jersey, lower New York state, eastern Pennsylvania and even sometimes Delaware and Maryland. We’d centralize the event in the north central part of the state.
“This year, we found a new way to tailor to some of the advisors that were further away than the immediate area,” Moritz continues. “We used to invite folks from Buffalo, Rochester and Albany, and it’s a hard drive to get to Syracuse during the day and take all that time out of the office, so we decided to split it and get a better concentration. We now have one in Rochester that could pull from Buffalo, which would be 3½ hours to Syracuse, but we could also invite them to Syracuse if they couldn’t make it to Rochester. We also added one in Long Island to draw New York City and Long Island, and one in Philadelphia which would add central and southern New Jersey.
“It’s a test year,” Moritz explains. “We’re trying to figure out how to make those programs as productive as possible for advisors. We can’t hit everyone with two big programs, so what may have drawn 40–60 people before, may only draw 20–30 this time, but it might be people who couldn’t make the other meetings before. As a result, I’d say our budget had probably increased slightly, but we’ve tried very hard to be creative with locations and venues. For the meetings that we have, the objective is not to be a destination. With financial advisors, their time is precious, and we don’t want to take them out for too long, since their objective is to sell and be available to clients. But it is important that we do get them out of the office for select meetings.
“Instead of using all hotels, we’re starting to use additional conference centers,” Moritz says. “With Philadelphia, I knew we wouldn’t be in the city center, so we used the university conference center at Villanova. School was out, and I was hoping to get a good deal with them, which we did, and it’s something other than a hotel with four walls. It’s a great room with all natural light.”
Ideal for a small meeting, especially for those who want to stay close to home, Blue Harbor Resort & Spa, is conveniently located two hours north of Chicago in Sheboygan, Wisconsin, on the shoreline of Lake Michigan. The resort has 182 guest suites that range in size from 500 sf to more than 1,900 sf, as well as 64 two-bedroom and four-bedroom villas. Blue Harbor boasts more than 16,800 sf of meeting and convention space, a 54,000-sf indoor entertainment area, retail shops, confectionery café and more. The resort has three full-service restaurants, an onsite wine and tapas bar and the award-winning Reflections Spa at Blue Harbor Resort and Spa.
Another great spot for a small meeting is Cape Cod’s 120-room Wequassett Resort and Golf Club, which completed a new waterfront renovation of 10,000 additional sf of flexible space. Meeting spaces range from intimate to large including the Cape Villa meeting rooms, which can hold groups of 10–30 and the Pavilion Ballroom for up to 320 guests.
In recent years, insurance and financial meeting planning has been rocked by several key changes. “Meetings have evolved and are now shorter in duration, use a condensed meeting agenda and usually contain a CSR event for a community giving-back aspect,” says Alfonso. “Meals are healthier and attendees are much more active than in previous years.”
Unfortunately for planners, the evolution continues, largely due to constraints imposed by the rebounding travel industry. But the creativity and resourcefulness planners have cultivated is serving them well to face the current challenges and prepare for what is coming down the line next. “Meeting planners are savvy consumers and are working harder than ever,” she says. I&FMM