Meeting Sites Resource's Robyn Mietkiewicz answers questions from the Meetings Budget & Cost-Savings Strategies webinar.
1. What's the best way to capture ancillary spend and use it effectively?
Let's start with what you control: the business center, AV production, and in some cases, spa and golf. At the conclusion of each meeting, capture all ancillary spend by category, and have this available for your next planning process. When you can break down all Master Account spend by category, you'll have great history to share with the hotel to showcase the overall value of your meeting. Another component is total attendee incidental charges, which can be captured in total and reported back to you from your attendees’ room folios. We're not asking for anyone's name, just total incidentals captured from your meeting. It's a good idea to outline in your contract how you want your Master Account broken out ahead of time.
Now, if spa, golf or activities are on their own, you can ask the hotel for a special discount offer or coupon that can be redeemed by attendees and tracked by the hotel.
2. Hosted receptions have become very expensive. Is there a way to better control costs and demonstrate savings?
Hosted bars can be costly since there is often a lot of waste, especially if people are not paying for their own beverages. A couple of ideas...portion control is important to assure cost efficiency, which should be communicated via BEOs and to the bartenders. Have portion controls for alcohol by the ounce, instead of free pour. I discussed passed hors d oeuvres or a combination of table-set hors d oeuvres. Some groups use drink tickets and are charged only on consumption. Of course, having a sponsor host the event is the best of all worlds. In all cases, it’s good to inventory bars before and after they close.
3. You referenced hotel contract performance clauses based on profit, not revenue. Can you provide more details and the specific benefits?
First, it's important to note that we all want to be good partners with our hoteliers and honor our contract obligations. We have found it effective to calculate performance damages based on profit, not revenue, since this is really in line with what the hotel would make when the meeting actualizes. When damages are based on total revenues, a hotel can make more money if the meeting cancels, since they have no expenses, particularly on things like food and beverage. As an example, hotels average 38 percent gross profit on food and beverage, so it's fair to guarantee the hotel that same amount in the event of non-performance.
4. Can you further explain how a hotel can cater an off-site event and have it go toward your food and beverage minimum?
Many hotels also cater off-site events at select venues so it's good to allow them to bid on your off-site events so the revenues can be assigned to your Master Account. Of course, also get bids from other area caterers so you can compare costs and negotiate savings.
5. Can you please give an example of vertical attrition?
In a hot seller's market, some hotels are putting vertical attrition in their contracts, which means you must guarantee your room block by night, not cumulative for the entire event. You are at risk doing this since you could pick up more than your total contracted rooms, but have one night that is low, and have to pay damages to the hotel. Cumulative attrition allows you to capture all room nights, including pre and post stays.