In an era when many hotels and resorts are facing unprecedented financial challenges, it’s not surprising if cost-cutting on staffing and services is business as usual these days. Whether it’s fewer people at the front desk, shorter hours for the fitness center or no more little shampoo bottles in the shower, the signs are there.
For meeting planners, charged with providing a smooth, rewarding experience for their organizations and attendees, what are the consequences? While many are finding that their hotel and facility partners are maintaining—sometimes even improving—service levels, industry veterans caution that, now more than ever, planners need to take steps to ensure that there are no unwelcome surprises when attendees show up for the meeting.
Hotel Challenges
Just how deep of a financial impact is the downturn in travel and the U.S. economy having on the hotel industry these days? According to Robert Mandelbaum, director of hospitality research for PKF Consulting in Atlanta, average U.S. hotel profits are expected to have declined by nearly 40 percent in 2009, "the worst we’ve seen in many years."
For hotels faced with such steep declines in revenue, cost-cutting, particularly in the way of staffing, is almost unavoidable, he says.
"The number one expense that any hotel has is with labor—45 cents of every dollar is spent on salaries and benefits," he says. "Staffing is usually the first area that gets cut. Other hotel expenses such as property taxes, insurance and franchise fees are not so easy to reduce."
While Mandelbaum notes that hotels generally make cutbacks first in back-of-the-house areas such as accounting and reservations, "we have seen hotels close restaurants or shorten their hours, shorten room service hours, things like that. Obviously, if these things are important to the group, planners need to check up on them."
Stephen Hennis, president of Hospitium, a Denver-based hotel consultancy that specializes in the luxury market, has a similar observation, adding that it’s hotels at the top end of the market that are facing the biggest challenge in maintaining service levels.
"Hotels are cutting back on staff and closing some restaurants—I’ve been to conferences recently where it’s hard to get into the restaurants," he says. "The planner needs to check into whether the staff levels are there—people may be stretched pretty thin."
On the flip side, he notes that hotels are offering exceptionally good rates and concessions these days, a factor that could outweigh some declines in services. At the same time, however, he cautions that guests are not necessarily willing to take this into account, especially at luxury properties.
"If I’m staying at a high-end hotel, I’m still expecting the same service that you get in a good market, even if I’m paying $200 instead of $500," Hennis says. "I’m not going to forgive them just because times are tough. People are not as forgiving on this as you might think."
Even if hotels are making cutbacks, they are still doing a credible job of keeping the customer satisfied, at least according to the J.D. Power and Associates 2009 North American Hotel Guest Satisfaction Survey.
The 13th annual study, which surveyed 66,000 guests staying at a cross section of hotels between May 2009 and June 2009, indicated that satisfaction levels had remained steady or even improved slightly over the year before in areas that include reservations, check-in/check-out, guest room, food and beverage, and hotel services and facilities.
"Hotels have really been stepping up to the plate, despite staff cutbacks and having less to work with," says Matt Holland, an account manager at J.D. Powers. "In some cases, they’ve been able to use technology to be more efficient in areas such as check-in/check-out."
At the same time, meetings industry attorney Jonathan Howe, partner in Chicago-based Howe & Hutton, says planners need to be aware of the increasingly likely event that a hotel that was running on all cylinders during a site inspection may not be operating at the same level when the meeting actually takes place.
"You might have signed the contract when things were rosy and everyone was enjoying the swell of the economy, but now the trap door has been pulled," he says. "There is plenty to be concerned about."
Where’s the Coffee?
While many of the planners contacted by Meetings West indicated they were satisfied with their recent hotel meeting experiences, there have been hurdles to leap.
In some cases, the absence of some expected amenities are coming as an unwelcome surprise. For association meeting planner Denise McGinn, CAE, president of Association Guidance in East Lansing, Mich., it was finding that two hotels she regularly does business with had removed their in-room coffeemakers.
"Our attendees did not react to this well," she says. "At our last event at one of the properties, we gave away individual coffee pots with a selection of coffee, decaf, tea and hot chocolate to keep them satisfied."
McGinn has also experienced the consequences of staff shortages.
"At one property we found that the service staff was trying to serve lunch for two different groups at the same time," she says. "We had members who were not even offered a beverage because they couldn’t keep up. So now we specifically request our own service staff for meal functions, and write that in the contract and on the banquet event orders."
Nola Conway, president of CTP/LMS, a meeting planning firm in Woodland Hills, Calif., that specializes in high-end incentives, says her recent experiences with hotel service levels has been mixed.
"Our most recent meeting at a five-star resort was a very positive one for attendees, with the staff eager to please our guests at every opportunity," she says. "On the other hand, another property had required that our convention services manager take mandatory time off prior to our program. This meant some unexpected challenges in the planning stages."
Loretta Lowe, CMP, of San Francisco-based Meeting Planning and Special Events, says her recent experiences have, if anything, been more positive, noting that "as business has slowed, many hotel staffers are even more eager to please. It’s nice not to be taken for granted as has sometimes happened in years past."
But while she finds that properties are doing a fine job in serving attendees, she has noticed a decline in service levels during the pre-booking process.
"It’s annoying to have to wait so long for a reply when you want to consider bringing business to a hotel or venue," she says. "Some of the larger hotel chains are consolidating their sales force and it makes it a challenge to work with someone who does not really know the property as well as they should. Sometimes it will take days to get answers to questions."
At the same time that hotels are making cutbacks, planners also note that pressure is greater than ever to ensure a positive experience.
"Groups are not having as many meetings these days, so there’s a lot more at stake," says independent planner Peggy Young of Peggy Young & Associates in Santa Cruz, Calif. "And, if it’s an association, they do not want to see their numbers drop. This is a very challenging time for planners, as we’re working with downsized, overly stressed staff on both the hotel and organization side."
Negotiating Issues
The best way to ensure that cutbacks in services or amenities do not become an issue during the meeting is to make service requirements part of the negotiating process, say industry attorneys and veteran planners. And, they emphasize, get those requirements in writing.
"If there are things that the group does want and expect, then by all means put it in the contract," says meetings industry attorney James Goldberg of Goldberg & Associates in Washington, D.C. "Unless you put specifics in a contract, it’s hard to insist on an abstract idea. You can say that you’re not getting the service you expected, but what does that mean? Some planners will put specifics in the contract—we need x amounts of servers or bartenders per attendees."
According to MaryAnne Bobrow of MaryAnne Bobrow & Associates in Sacramento, Calif., who primarily handles association meetings, even details such as in-room amenities should not be overlooked.
"People have expectations that those little amenities will be there, so they are important," she says. "When we promote the hotel, we promote the kind of amenities they have. Your contract right out of the gate should be very specific to your wants and needs."
When it comes to important service issues, negotiating expert Nancy Norman, president of Boston-area-based meeting planning firm The Norman Group and author of Contract Addendums with Negotiation Techniques that Work, advocates putting a hotel performance clause in the contract.
"A lot of hotels will want you just to take the standard contract and sign it, but you don’t have to do this," she says. "I always have a hotel performance clause in the addendum to the contact. I’m very specific about what I want. If something happens that impacts the success of the meeting and the hotel does not address it, the clause says the hotel and the organization will sit down and agree on a financial settlement."
Given the economy, she also insists that the hotel disclose any cutbacks they are making that could affect the meeting or the guest experience.
"I say to the hotel that I understand that times are rough—you’ve had to close your restaurant—but I need to see a written report of all the cutbacks you’re doing," she says. "I want a signed document so I can reevaluate whether I still want to use the hotel."
Another precaution that Norman recommends is to insist on the opportunity to renegotiate the contract in the event there is a notable downturn in the economy before the meeting occurs.
"You want to have some sort of protection in case the hotel goes bankrupt or changes its management flag," she says. "This helps with attrition issues or paying a rate that is way too high."
In an era when cutbacks can happen at any minute, experts also say that it has become essential that planners monitor the situation at hotels.
"The issue comes down to good communication between the property and supplier," Howe says. "When you show up at the hotel and find out that things are not as they should be, if you’re surprised that staffing is down or a restaurant is closed, it’s too late."
On the Spot
Even when planners have done all they can beforehand to ensure a smooth experience, what happens when the meeting is under way and the hotel doesn’t deliver?
According to Norman, having a hotel performance clause in the contract is the best way to ensure that the hotel will
address problems quickly.
"Your hotel performance clause asks that any service problem be resolved—or the hotel will have to settle financially," she says. "So they will be eager to fix the situation."
While a severe service problem may cause tempers to flare, Norman says planners should always keep their anger in check.
"Yelling and screaming will get you nowhere," she says. "People don’t respond well to this. If you’re visibly upset, the attendees will get upset, too. Ultimately, it is the planner’s responsibility to keep the situation calm."
Lowe agrees, adding that "as a professional meeting manager you need to manage instead of react to challenges. You jump into your ‘proactive solution’ mode and find acceptable alternatives."
For Lowe, the need for a proactive solution occurred at a meeting where the hotel failed to supply the amount of Internet bandwidth the group required.
"We found an available satellite DSL company and were able to fix the problem within the hour," she says. "The hotel partnered with us and split the costs."
