Taking a Chance? How Planners Reap the Rewards of Selecting New and Renovated PropertiesJanuary 1, 2013

January 1, 2013

Taking a Chance? How Planners Reap the Rewards of Selecting New and Renovated Properties

Spectacular views of the Las Vegas Strip from this brand new MGM Grand Skyline Terrace Suite make for an exceptional experience. Credit: MGM Resorts International

Spectacular views of the Las Vegas Strip from this brand new MGM Grand Skyline Terrace Suite make for an exceptional experience. Credit: MGM Resorts International

Hotels and resorts nationwide are taking advantage of the resilient economy to spruce up properties in order to keep pace with competitors and attract budget-conscious planners seeking value.

New properties offer value for planners who carefully assess the pros and cons of booking meetings at hotels still under construction. “They are anxious to get rooms filled and get staffs working,” says Gary Pearson, director of corporate meetings and events at Aon Service Corporation, a Chicago-based insurance services firm. “It’s a seller’s market, but if you can get into a new place that is trying to feel its way around as to what its rate structure will be, you may be able to come up with a bargain.”

Pearson planned a two-day sales meeting for about 260 Aon employees at a brand new hotel in Las Vegas. He considered other properties before making a site visit to the hotel. He left the property impressed with everything that it offered, including meeting space for general sessions and breakouts.

The hotel assured Pearson that it would be ready before his meeting date, and he obtained a deal that provided good value. “New hotels are willing to accept a lower rate for a temporary period in order to get groups in and get the word out about the property. Once they do that, we see patterns where rates start to increase,” Pearson says.

But don’t expect every brand-new hotel to offer a rate break to fill rooms. According to Pearson, “Some new properties may offer good deals and others may not. Sometimes you might feel the rates are higher than they should be for a new hotel. It will vary depending on which hotel you deal with, how big the group is and other factors.”

Pearson believes it’s important for planners to always include a time cushion when booking meetings at new and renovated hotels. “You have to play it smartly,” he says. “I will schedule the meeting at least two months after construction is supposed to end. It might be more, depending on the destination, weather and other factors,” says Pearson, who oversees planning for about 300 meetings a year ranging in size from 10 to more than 700 people.

A time cushion helps protect planners against the risk of extended construction deadlines. “I have had meetings in hotels that said renovations would be completed by a certain time but they weren’t, and we incurred some ‘interesting’ situations,” Pearson says. “Delays happen due to situations that hotels can or can’t control. It’s bad if your group walks in and they are still renovating rooms, and your people have to step around things in the hallways. You want a finished product when you arrive.”

Outlook for 2013

Finding value among new and renovated properties is more important these days because the pendulum is continuing to swing toward a seller’s market. Experts predict that planners will face higher rates, fewer concessions and tighter booking windows with reduced availability. According to a recent report from PKF Hospitality Research, hotel supply growth will remain under 2 percent as occupancy levels rise, especially among upper-tier properties. Meanwhile, the average room rate will increase more than 4 percent through 2014.

A recent report from Pricewater­houseCoopers concurs. In 2013, room supply is expected to rise 0.8 percent as overall occupancy increases to 61.9 percent while occupancy for “upper upscale hotels” rises above 70 percent, according to PwC. Overall, RevPAR (revenue per available room) will rise by 5.4 percent in 2013.

Seller’s market or not, planners who book new and renovated properties must consider several factors, including attendee expectations, the hotel brand and the quality of the property. Scott Lawson, vice president of sales, Travelmart Inc., a Westlake, OH, meetings, incentives and travel solutions firm, says, “I look at whether it’s a tried-and-true brand, whether it’s one that I have a good working relationship with, and whether it’s an independent property or one that I don’t know.”

Familiarity with The Fairmont Scottsdale Princess in Arizona was one reason why Lawson selected the hotel for a meeting as the property was nearing completion of a major renovation. He had held previous meetings at the hotel and enjoyed a good working relationship with the staff.

Working on a short turnaround for a Midwest-based financial company’s sales meeting, Lawson signed a contract in September 2012 for a three-day meeting for 60 salespeople held in December 2012. When Lawson signed the contract, the hotel had begun the final phase of a five-year, $60 million renovation plan scheduled for completion in spring 2013. The project includes the new 53,000-sf Palomino Ballroom and Conference Center, which opened in November 2012, one month before the financial firm’s meeting.

Get It in Writing

Lawson’s contract with the hotel included safeguards to protect the financial firm from risks that construction might not be completed on time. “We included clauses to protect meeting functions from noise,” says Lawson. “We also had a clause requiring them to keep us updated on construction and anything about it that would interfere with the conference. The sales manager was very responsive in that regard. They kept us updated with phone calls and emails.”

Along with the updates, Lawson made a site visit to The Fairmont Scottsdale Princess in November. The Palomino Ballroom and Conference Center still required some finishing touches, but Lawson was confident that the work would be done before the meeting. “It was just about ready to open,” says Lawson. “They weren’t doing substantial work, just things like general painting. When we arrived for the meeting, everything was great. They were very conscious to schedule any remaining work away from meetings. Everything worked well for our attendees.”

It’s important to assure that hotels schedule and position construction work so that attendees don’t see or hear it. That is a key for planners as well as DMCs that hold events on property, says Karen Shackman, president of Shackman Associates, a New York City DMC and events company.

Shackman has held several on-property events at the Waldorf Astoria New York in Manhattan as it undergoes a multimillion-dollar renovation of guest rooms, public spaces, meeting rooms and restaurants. Shackman is also planning onsite functions for an insurance firm that will hold a sales incentive for 250 attendees in the Waldorf Astoria early next year.

She is confident that the insurance group will be largely unaware of the construction. “They do such an amazing job of closing off the construction area that you don’t realize there’s a whole portion of the hotel behind a fake wall that blocks everything off and prevents everybody from accessing the main entrance. They do a great job of repositioning the meeting space and lobby. People who had never been there before didn’t even know the construction was going on,” says Shackman.

Like other meeting professionals, Shackman considers myriad factors when it comes to using new and renovated properties. “No. 1 is how extensive are the renovations. Is it a property-wide renovation that has a big impact on sleeping rooms, where people enter, where they can go in the property and where they sit and eat? In that case, as a planner you have to consider the risk, particularly since construction can have a life of its own and often doesn’t adhere to correct schedules,” says Shackman.

Overcoming Obstacles

But problems may arise even if construction is completed on schedule. Venessa Grant, business development manager for Minneapolis-based Carlson Wagonlit Travel, once faced a post-construction problem upon arriving at a hotel with an incentive group. “There was a large crane on the front driveway. It was a big problem,” says Grant. “We told them that we were promised there would be no construction. Their response was that construction was finished, but they simply hadn’t moved the crane yet because it was down to the wire for them to complete renovations.”

The hotel removed the crane by the end of the next day. In return for the inconvenience, Grant’s group received food and beverage discounts and a complimentary cocktail reception. “We never thought we would see a large crane in front of a hotel in that type of situation. These types of things help us determine what to add to future contracts,” says Grant.
She advises planners to use broad and inclusive language in contracts to provide protection against all construction-related issues. “Be clear that the completion date will not be a moving target. And be very clear on the parameters of any sort of delay that would impact your program. Have language in the contract as to when you will be notified about any delay,” Grant suggests.

On the other hand, groups facing unfinished construction can still have successful meetings. Patrick Sullivan, president, AlliedPRA New York, offers the following example. His DMC was providing services for an incentive group set to stay in a recently opened hotel. Upon the group’s arrival, there were still workers onsite. Guest rooms were ready but only some of the public space was finished.

Sullivan decided to turn the situation into a positive experience. “We gave attendees construction hard hats with their names on them and metal lunch boxes. Inside the boxes were letters from the general manager apologizing for the inconvenience,” says Sullivan. “The letter also named a construction worker and offered prizes for attendees who met him. We made it a game, kind of like a scavenger hunt. Out of 100 attendees, maybe 20 met the worker and claimed prizes. Some people took pictures of the worker.”

Sullivan offers another example of putting a positive spin on incomplete renovations. “Let’s say there is a big ballroom that’s being remodeled. The wallpaper, carpeting, chandeliers and everything else is done except part of the stage. You could hide the work with a big curtain, perhaps with the client’s brand on it,” says Sullivan.
Sometimes an incident beyond the control of the property can impact the construction schedule. When that happens, it’s doubly important to determine whether a property can meet its deadline. One planner went to extra lengths to double-check whether a property undergoing renovation was ready, says Terry Epton CITE, DMCP, president of Hosts Global Alliance.

As Epton explains, a New Orleans hotel was undergoing renovation when Hurricane Isaac hit in 2012. The property required some additional work after the storm. “The property had to do a lot of work quickly because it had a lot of business booked,” says Epton. “A friend with a group coming to the property called and asked me to check on the renovation progress. He wanted a neutral set of eyes to look at things, so I did it as a professional courtesy. I checked it out and everything was okay. The meeting went great.”

Advice for Planners

Epton and other meeting professionals cite the following advantages to holding meetings at new and renovated properties.
Service. “The people at new properties are highly motivated to make their first impressions be great ones,” says Epton. “There is a sense of urgency from the top down. They will do whatever it takes to make things come out great.’

Buzz. “The primary thing about a new or renovated property is the buzz of going to the new hot place in town,” says Epton. Buzz can equal increased attendance depending on other factors, including destination, brand of the property and a group’s attendance history.

Cool technology. Typically new hotels and resorts feature state-of-the-art audio-visual, broadband, Internet, video and HD capabilities. Such amenities are especially important for attendees of financial and insurance companies who want to quickly access the latest information about global economic markets, says Shackman.

Improved meeting experience
. “You are getting a product that is new or like new that impresses your attendees. It’s a pleasant surprise and added motivator, especially for groups that have been to the hotel before and are impressed by the changes. I’ve gotten comments on that,” says Pearson. That’s especially true for extensive renovations that give a property an entirely new look and bigger size, he adds.

Location. Many renovating properties are older ones that were among the first to open in conveniently located downtown areas. These hotels look to renovate as newer competitors open up downtown or in trendy nearby neighborhoods, says Shackman.

New and improved properties can enhance meetings and provide value for planners who carefully assess the benefits and risks. As Epton says, “There are a lot more positives than negatives to being in an improved place where everybody is anxious to get it right and make a great first impression.”

New and Improved and Noteworthy

Following is a roundup of new and renovated hotels:
MGM Grand Las Vegas debuted last fall a $160 million remodel of 3,570 guest rooms and 642 suites in the hotel’s main tower. The newly remodeled rooms incorporate environmentally responsible elements including LED lighting; improved thermostats and solar shades to better manage temperature and guest comfort; and bath amenities that are 100 percent biodegradable. Go to http://www.thegrandrenovation.com for additional information and updates.

In other MGM Resorts International news, the company collaborated with Cisco Systems to create a high-density Wi-Fi system that is the highest-performing wireless LAN in the industry, allowing travelers with multiple wireless devices to enjoy quality Wi-Fi. Advantages of the program include 30 percent faster connectivity, an automatic Wi-Fi connection that eliminates user hassle, and delivery of customized, relevant and timely offers and information that are delivered directly to attendees’ mobile devices.

The Wi-Fi rollout at MGM Resorts destinations in Las Vegas began with Bellagio, MGM Grand, Mandalay Bay and The Mirage, all completed in 2012. Monte Carlo, New York-New York, Luxor and Excalibur will install Wi-Fi in 2013.

In 2013, MGM Grand at Foxwoods in Connecticut is planning the development of a new high-end retail shopping mall as well as a total revamp of the existing retail corridor.

However, the biggest news at Foxwoods, according to Jessica Baran, vice president of resort sales, is that she was brought aboard to “implement a three-point plan aimed at making Foxwoods a major meeting destination resort.” Baran did previous four-year stints at Atlantis in the Bahamas and The Venetian in Las Vegas.

“The first part of the plan is to implement a seamless transition between the sales and conference services department, because there has been a disconnect in the past between booking a group and actually managing that group,” Baran says. “So what we are doing now is making a transition so that the same people are with you from start to finish so that your program is seamless.”

Related to that is a new shared services policy for meetings and events. “That applies to all entities, including third parties. Sometimes hotels say ‘We don’t own that, so we can’t work with you on that.’ So again, we are working to make the entire process seamless for planners. Now that includes vendors, and we are making sure that clients can get the services they need without paying additional fees. And an important part of that is that I am now in charge of both resort sales and conference services, so I am responsible for making sure we achieve the seamless integration of those two departments.”
Finally, Foxwoods and Baran are on a mission to recruit the country’s top meeting sales and service team from A-list properties across the country.

In San Diego, The Westin Gaslamp Quarter completed a $25 million refurbishment. The project included a redesign of all 450 guest rooms, and a refreshment of the hotels 35,000 sf of meeting and event space.

Among major hotel brands, Chi­cago’s Hyatt Regency McCormick Place started in 2012 the renovation of the hotel’s 800-room tower. Phase three will see the renovation of the hotel’s 25,000-sf Hyatt Conference Center. Currently, the property offers 800 guest rooms and 43,000 sf of meeting space.

The Manchester Grand Hyatt San Diego is renovating the entire hotel, including its 1,625 guest rooms, 125,000 sf of meeting space and guest rooms. Completion is scheduled for fall 2013.

The Westin New York Grand Central opened in the former New York Helmsley Hotel after a $75 million renovation. The property features 774 guest rooms and more than 12,000 sf of state-of-the-art meeting space, including an expanded 4,100-sf ballroom.

The Sheraton Tampa East Hotel, formerly a Crowne Plaza property, opened after a $9 million renovation of its 265 guest rooms and 30,000 sf of meeting space.

Sheraton is investing more than $230 million to refurbish four Ha­waii properties — the Sheraton Waikiki, Sheraton Maui Resort & Spa, Sheraton Kauai Resort and Sheraton Kona Resort & Spa at Keauhou Bay.

Among Hilton properties, the Hilton Chicago completed phase one of a four-phase, three-year $150 million renovation project. Phase one included renovation of all 454 guest rooms. The hotel now offers 234,000 sf of event space.
The DoubleTree by Hilton Metropolitan New York City, located in Midtown’s upscale East Side, has renovated its 764 guest rooms and 12,000 sf of meeting space.

In Florida, the 641-room, 34-story InterContinental Miami, located downtown, is undergoing $30 million in upgrades. Improvements include renovated suites, a 19-story “digital canvas” that illuminates the nighttime skyline, and hotel-wide multimedia showcasing Miami’s culture. The hotel features 101,000 sf of meeting, conference and exhibition space.

The Hilton Sandestin Beach Golf Resort & Spa, located in Destin, FL, boasts expanded deck areas overlooking the Gulf, a new beachside restaurant and bar, remodeled meeting spaces and amenities, and much more. The 598-room resort has 32,000 sf of meeting space.

In Central Florida, Rosen Hotels & Resorts’ three Orlando convention properties are renovating and updating as well and now offer free wired and wireless Internet service in all guest rooms and public areas. Rosen Centre Hotel completed a multimillion-dollar makeover of its 1,334 guest rooms, 14 two-bay and three-bay hospitality suites and one of three 2,500-sf Presidential Suites. Rosen Centre Hotel’s 124,000 sf of meeting space includes the new 18,000-sf Executive Ballroom, 35,000-sf Grand Ballroom, a 14,375-sf Junior Ballroom and 24 meeting salons.

Rosen Plaza Hotel, which is adjacent to the 2.1-million-sf Orange County Convention Center, recently renovated all of its 800 guest rooms, 10 hospitality suites and hallways. Rosen Plaza’s more than 60,000 sf of modern meeting space also includes the 26,000-sf Grand Ballroom; 22 meeting rooms; the 12,500-sf Foyer; and the 4,500-sf Regency Salon.

The AAA Four Diamond Rosen Shingle Creek, located less than a mile from the Orange County Convention Center North/South building, boasts 1,500 guest rooms and suites, and 445,000 sf of meeting and event space, including three ballrooms of 95,000 sf, 60,000 sf and 40,000 sf. The hotel also offers 99 meeting rooms, 55,000 sf of breakout meeting space and 250,000 sf of exhibition space. In addition, the hotel offers an 18-hole championship golf course and the 13,000-sf Spa at Shingle Creek.

The Naples Beach Hotel & Golf Club completed a $5 million renovation. The project includes a ballroom with a view of the Gulf of Mexico, prefunction space, Gulf-side meeting rooms and the 12 remaining guest rooms in the resort’s Florida Wing. Upon completion of the renovation by the end of 2012, the hotel will have renovated all 317 guest rooms and suites. The resort offers 34,000 sf of meeting space.

At Universal Orlando, the Loews Royal Pacific Resort, Hard Rock Hotel and Loews Portofino Bay Hotel have renovated a total of more than 80,000 sf of meeting spaces. I&FMM

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