When it comes to meeting in the lap of luxury, Miami and Fort Lauderdale are sitting pretty. Names like Ritz-Carlton, W, Four Seasons, Fontainebleau, Fairmont, Hilton and Mandarin Oriental (among others) have been drawing deep-pocket meetings and conventions for years, creating an upscale clique of groups that gather by the ocean in plush, high-priced interiors, surrounded by gleaming sands or rolling fairways.
Well, put that scenario on hold because for the time being, luxury is up for grabs in Miami and Fort Lauderdale, as hotel prices have dropped by up to 30 percent and even the most budget-minded groups are getting a taste of the good life.
"I’ve brought a number of groups to Fort Lauderdale over the years, and this year was the first time we were able, rate-wise, to even consider a beach property," says Judy Williamson, CMP, a client development specialist at New York-based Arcadis, who will be bringing over 200 attendees to the W Fort Lauderdale this February. "We’d stay at nice properties, but not right on the beach, as we will now."
Other planners have noticed a change in attitude among the region’s swankiest properties—from aloof to accommodating.
"In the past when you called and left a message, no one called back," says Joost de Meyer, CITE, CMM, president of First Incentive Travel in Orlando. "Now they’re calling you or visiting you to get the business. They want to work with you on attrition, they want to work with you on extra points. So we’re really getting good deals."
For some planners, the deals are nothing short of dazzling.
"I’ve seen incredible rates at luxury properties that I never imagined we’d ever see," says Andrea Milrad, a national accounts manager for Helms Briscoe, who cites rates in the $159 to $199 range for oceanfront and downtown luxury properties in Miami that used to be in the mid- to high $300s. "And we’re talking more than a year out, not a last-minute thing."
So with rates going down, are more groups buying up? Or as Thomas Roth, director of sales and marketing for Fort Lauderdale’s Atlantic Hotel puts it: "If you can get the same price at a four- to five-star hotel as you could at a three-star, why wouldn’t you stay at the superior property?"
What’s in a Name?
For some planners, the answer is simple: Nothing with the word "resort" in it, period.
"I can’t buy luxury properties, even if it’s a ‘real deal,’ because of the perception," says Paula Brewer, team leader of conference and travel management for the American Cancer Society in Atlanta. "I have to stay with the ‘meat and potatoes’ properties and none that suggest resort or luxury."
Indeed, thanks to the so-called "AIG Effect," some posh properties have also learned to downplay their luxurious qualities.
"We took ‘resort’ out of our name. We used to be the Atlantic Resort and Spa," Roth says. "Of course, when you go to the website, you can see the quality of the hotel. You can’t totally cover it up and tell people they’re staying at a Motel 6."
When it comes to the bottom line of dollars saved, though, some industry leaders feel the "luxury" stigma is fading as more upscale properties drop their prices to stay competitive in today’s economy.
"Last year, some groups weren’t going anywhere near luxury properties. Today, the focus is more on value, the cost the company is paying and what return they’re getting on it," says Christine Tascione, CMP, vice president of convention and group sales for the Greater Fort Lauderdale CVB. "And so people have turned back, looking at luxury and saying, ‘I can justify this because I’m offering a price that would be less potentially than even a city center downtown property, but is more attractive and has additional amenities that I’m not paying for.’ So they’re able to demonstrate a good value."
If you’re among the fortunate planners whose top brass prizes the bottom line over the hotel brand, you certainly could be ready to let your luxury flag fly.
Let’s Make a Deal
From deep room discounts to extra perks and attrition waivers, luxury hotels and resorts in Miami and Fort Lauderdale are willing and able to do just about anything to woo more group business.
At the Atlantic, for example, recent agreements have been sealed "with a handshake," Roth says, to soothe any qualms planners might have about meeting their room blocks.
"Meetings have shorter and shorter booking windows, and planners are so concerned about contracts. We just realized, ‘Why are we making it tough to do business?’" he says. "Instead of making them go through the step of getting approval from their legal division and worrying about their liability, we outline it in an e-mail and say, Here’s your room rate, here are the dates, here’s the space we’re holding and this is what we’re charging you.
"Our sales team is empowered to make decisions and be flexible," he adds. "They don’t have to check with the director of sales or general manager."
While it might seem the hotel is taking an uncomfortable risk, Roth says it’s rare to have a short-term group cancel from one week to the next, while the Atlantic’s smaller group sizes of between 10 and 30 reduce the impact of any such cancellations.
But even the area’s larger upscale properties are making major concessions when it comes to attrition.
"[It] is very much a concern for meeting planners these days, and at one time we expected them to pick up 90 percent of their block," notes Chris Bielski, director of sales and marketing for the 650-acre Doral Golf Resort & Spa in Miami. "We’ve reduced that to 70 percent. We also offer double Marriott Rewards points to the meeting planner, or they can raffle them off as an incentive to one of their meeting attendees."
Other concessions at Doral include a room rebate of between 2 and 5 percent (for groups over 100 room nights), discounts on food and beverage and audiovisual needs, and an increased ratio of complimentary rooms per rooms booked.
"The industry standard is one comp for 50, and we increased it to one per 35," Bielski says.
When summer rolls around, "always a challenge in South Florida," Bielski admits, the resort will go a step further by waiving attrition fees altogether and offering a 10 percent room rebate and a complimentary opening night reception.
Such value-added enhancements have become standard operating procedure among even Miami’s most elite properties, says Barry Moskowitz, vice president of sales for the Greater Miami CVB.
"If you book here, not only are you getting a great rate now, but you’re also going to have an enhanced package, such as additional upgrades to a suite or concierge level, and discounts on meeting space," he says. "And this is not only from individual hotels, but the hotel chains as well. I know Loews as a corporation has discounted their catering menu across the board."
(Planners take note: The 790-room Loews Miami Beach is the headquarters property of the nearby Miami Beach Convention Center).
But beyond the many perks upscale properties in South Florida are offering these days, flexibility on the planner’s part also goes a long way toward making the experience a success.
"If the hotel has sold a ballroom on a Saturday, have your gala dinner on a Friday," the Greater Fort Lauderdale CVB’s Tascione says. "If you only have x amount of dollars to spend on a meal, find a way to value-engineer it. Instead of an open bar all night, have a cocktail hour then poured wine for dinner."
What counts most, Tascione says, is forming new relationships.
"The luxury hotels have definitely opened new markets, but both sides need to learn how to make it work, both the group unaccustomed to the upscale property and the hotel that has to find new revenue streams for a different customer base," she says.
Spending Power
Among the many new segments testing the luxury waters in South Florida are association and SMERF groups.
In fact, notes Milrad of Helms Briscoe, in an area where associations comprise 30 percent of the client base, associations are an ideal audience in which to pitch the luxury brand in today’s market climate.
"Those are the ones I’m coming back to with luxury [options]," she says.
Also keeping an eye on associations is the Greater Miami CVB, which recently launched a new incentive program to encourage associations and their meeting planners to book conventions in Miami by the end of 2010. Called MIA-ROI (for Return on Inspiration), the program offers discounted rates for association members who book pre- and post-meeting stays, a $2 per-room, per-night credit on the rooms sold, which goes back into a "credit account" for the association, an "INcard" offering discounts on restaurants, shops and attractions, and other perks.
"It’s something short term to help stimulate business into the city and also help some associations out at the same time," Moskowitz says. "So not only the hotels, but the city as a destination wanted to get involved and be proactive, and promote the destination and its incredible value right now."
However, increased association and SMERF business has created new challenges on both sides of the front desk because unlike their more free-spending incentive and corporate counterparts, these groups tend to be more conservative when it comes to event budgets.
"I brought one group to the lobby bar of a luxury hotel and they basically said, no way would their attendees pay 15 dollars for a glass of wine," Milrad says. "So in that sense, some associations may be turned off by the ancillary costs of more upscale properties, while others would say it washes out because they’re getting this great rate."
But association and SMERF groups are hardly the only ones balking at the spa, golf and dining rates at South Florida’s more opulent properties.
"People have changed their spending habits and are no longer doing big, lavish receptions and things like that," Tascione says. "If the price point comes down, the budget for those types of things has also come down. Hotels have had to find a balance between traditional revenue generators and keeping occupancy levels up."
At Doral, where groups are still booking the golf courses and spa, Bielski says there were cuts in that area last year because of the "AIG Effect."
"But we’re seeing less of that now," Bielski says. "Groups are still looking for value, but they’re not totally cutting [golf and spa] out of their programs. We’re seeing that people are starting to get back to business as usual."
Indeed, with three major citywide conventions booked between November 2009 and January 2010, Greater Miami has been hosting groups in the 15,000 to 20,000-person range, while all eyes were on South Florida for the NFL Pro Bowl Jan. 31, and Super Bowl XLIV is set to take place Feb. 7.
"I think these challenging times have really created new opportunities," Moskowitz says. "We’re hosting a fam this month and have had record-breaking numbers of planners interested in scouting the destination. We’re definitely taking lemons and making lemonade here."
And yet, amid the optimism, Andrea Milrad urges caution going forward, especially regarding client expectations.
"Once an organization gets into a luxury hotel, and their attendees experience it for the same price they were getting at the three-star hotels, how do you go back and tell them, ‘Okay, well we’re back at the three-star,’ after they’ve kind of moved it up a notch," she wonders. "Groups may start expecting these great rates."
The lesson may be, then, to enjoy it while it lasts!
