Washington, D.C. lobbyists aren’t the only ones trolling the nation’s capital for business. CVB executives at both first-and second-tier cities report that more destination sales people are heading to the capital in hopes of picking up some of the meetings “gold” in Washington streets.
In the wake of the new administration’s bailouts and stimulus spending, they know there is federal meetings business to be booked, even in the midst of a deep recession that has put corporate and other types of business on hold.
Some government planners compare the current buying climate to the era that existed post-9/11.
“After 9/11 everyone in sales went after government business because new agencies and divisions in the Department of Defense were formed and that was the hot ticket back then,” says Chris Middleton, conference/exhibits manager for the Society of Government Meeting Planners. “Hotels were losing right and left. I know because I worked at a hotel for two years.
“Then when things began to pick up, sales people went back to their corporate clients and weren’t so handy with per diem rates. In better times, they typically don’t flex rates, yet government has saved hotels on more than one occasion.”
Melody Kebe, CMP, conference liaison for Defense Information Systems Agency and SGMP board president, says competition is fierce for federal government meetings business, especially military.
“The larger hotel chains are reaching out more and more to the government sector,” she says. “I’ve also received calls from several CVBs asking about our meetings because they know federal governmental agencies will always need to meet, whether we do it face-to-face or by remote.”
State and Local Reductions
The situation is quote different, however, at the state and local government levels.
In Virginia, Michelle J. Hergenrother, CMP and senior group sales manager for the Hampton CVB, says state and local government spending has dropped dramatically, with only about a quarter of annual meetings and conferences going forward. But she adds that hotels are courting the market nevertheless.
“Hotels are going after government business because they seem to be the main market definitely spending money on meetings,” she says. “In better times, many suppliers don’t want the lower rated per diem business, but now everyone wants it. The competition is incredible. Those few events that are still being held due to the importance of the topic have fewer people attending or the conference length being cut in half.”
She adds that federal groups, especially military ones, have not been heavily impacted by the economic downturn. They continue to meet, but their RFPs now frequently require a meetings site be within 90 minutes' drive time of Washington, D.C.
CVBs on the Hunt
CVB and hotel sales executives confirm their current strong interest in government business, especially federal.
Houston CVB Vice President of Sales Ken Middleton says his bureau began eyeing government contracts shortly before last year’s national election and began to ramp up sales efforts. The CVB opened a new D.C. sales office and tasked the staff to focus on short- term government business for Houston.
“The trend over the past five years among bureaus has been to divest themselves of D.C. offices, and we did raise a lot of eyebrows when we opened a new one last year,” he says. “People told us we were insane. But we knew there would be a couple of trillion dollars floating around this city and we want to get our piece of it.”
According to Middleton, the new office represents a major commitment to the Washington, D.C. market, involving five staff members and a hefty price tag.
“In the past month or so, I’ve been in D.C. three times,” he says.
“Inbound flights from Houston to D.C. are often sold out, so we know we have to book transport early. It seems there is a stampede to the capital right now, but we think we got a headstart by starting our rampup last summer.”
Atlanta is among cities that have retained a D.C. sales office. Mark Vaughan, executive vice president of the Atlanta CVB, says a new sales person has been added to the office to focus on groups of less than 2,500 people seeking short-term availability.
“We continue to offer the best packages we can to customers,” he says. “The pie has gotten smaller but the good news is there is still a pie. Government business has always been a key market for us, because we have the Center for Disease Control (CDC) and its bases around our state. So this makes us an attractive government destination and we’ve always had resources deployed to that marketing segment.
“Biomedical continues to a hot segment now and our proximity to CDC helps us with that. Also, anything that revolves around energy, Department of Defense and Homeland Security.”
Vaughan adds that Atlanta is an attractive destination because of its air accessibility, affordability and wide array of hotel price points in close proximity to the Georgia World Congress Center (GWCC).
“We have 12,000 hotel rooms within walking distance to the GWCC, and great cooperation among our hoteliers that separates us from our competition,” he says. “Our bureau works with our hotel community to promote any opportunities they have going on, from complimentary meeting room rental to more reward points, breaks of F&B, WiFi, perks like that.”
Hotel Strategy
Paul Somogyi, director of sales for government and affinity segments for Marriott International, says his company is focused on government accounts as never before. In 2007 Marriott began designating increasing numbers of sales managers to government accounts, and now has a sales force of 31 government sales people, including 18 in Washington, deployed to handle government accounts on a national and global level.
According to Somogyi, the new sales force is “customer centric” rather than “hotel – or property – centric,” in that it provides one-stop customer service for business at hotels throughout the Marriott network.
The new system is superior to relying on hotel sales teams at individual hotels to handle government business, he says.
“We learned many government planners were frustrated with suppliers at property level who typically assign less experienced junior sales associates to their accounts, and we designed a new sales training program that prepares associates to service the sector,” he says.
“In this economic climate, the initiative is really paying off,” he adds. “Our booking pace for group business is up 37 percent over last year. Even our luxury brands JW Marriott and Ritz-Carlton are getting government business where they haven’t previously done so. Some of this has to do with availability. Per diem is more available.”
Advice to Suppliers
Planners on the receiving end of the current courting game advise industry sales people to take a long view for continuing success in any economic climate.
Chris Middleton at SGMP suggests people new to the government sector avail themselves of the organization’s educational resources, designed specifically for suppliers.
“We have tracks about how to pursue the government market regardless of the economic climate,” he says. “We show sales people how to get our business, how to procure contracts and what they will be up against in government.”
Kebe reminds suppliers the lid isn’t off government meetings spending. Even though government groups are still meeting, their planners are taking a hard look at how many staff should attend meetings that require travel.
“We want to make sure we have enough people on hand to support our customers,” she says, “but we are asking for more multi-tasking from our people, things like expanding speaker roles to participate in booth coverage and provide onsite support.”
And there are perception issues to contend with as well, she notes, adding that to place a meeting in a resort destination requires evidence of a content-heavy agenda to avoid the appearance of a boondoggle.
Per diem rates are almost always the tipping point, and destinations which don’t require people to travel across country are preferred, she says.
