2022 Trends in Event Sourcing and Contracting
2022 is already halfway done, and we’re excited to be getting back to live, in-person events. As we navigate this transition, it is becoming more and more evident that the hotel and venue sourcing and contracting process has become more challenging than we were accustomed to compared to pre-pandemic. With restrictions lifting across the country and around the world, the meeting flood gates have opened. Everyone wants to return to live events.
That’s why it is important for us to share the following trends that we are experiencing to assist you in planning for successful events as we move into the second half of 2022. Learn the latest industry norms so you can be prepared for whatever the sourcing process throws your way.
Recent Trends in Event Sourcing
All of the sourcing trends boil down to two key components: increased demand and reduced supply. While the desire to return to in-person events has many benefits for planners and attendees alike, the downside is that space is filling up quickly. We have also learned that some Tier 1 cities, such as New York and Chicago, have a reduced inventory of guest rooms since some hotels have not re-opened post-pandemic. You have to act fast or get left behind.
Delays in Hotel Responses
Throughout the planning process, but especially during sourcing, hotels are taking longer to respond. This may be due to a number of reasons, including limited staffing, sheer volume of new meeting requests, rapidly changing availability, and new staff training challenges. Whatever the reason, it means that you need to start planning your event earlier than ever in order to secure your space.
Limited Space Holds
Hotels may not be able to hold meeting space while venue decisions are made. The choice to hold or not to hold may be due to compression or demand for specific dates, and it varies by location. To guarantee the space you need, be prepared to make hotel decisions quickly. Even then, the final meeting rooms may be slightly different than initially proposed.
Fewer First Option Holds
First option holds are not always possible. Many times, hotels will only offer shared options, which means there are multiple groups interested in the same space on the same dates. Hotels are providing firm deadlines for final decisions, and they may not always agree to extend as there are usually other groups ready and waiting.
Availability Changes Daily
Although hotels may be taking longer to respond, things are still moving at a very fast pace. Availability of specific meeting rooms is changing daily. Even if space is on a tentative hold, it doesn’t mean it will stay available for your meeting, so have with backup options and workarounds ready. Flexibility is key!
Recent Trends in Event Contracting
With increased demand comes increased costs. There is simply not as much wiggle room when negotiating contracts, so hotel and venue costs may take up a larger portion of your event budget. Be willing to compromise, whether on event space or elsewhere, to meet the objectives of your program while staying in budget.
Increased Service Charges and Resort Fees
Both resort fees and F&B service charges have increased. We are seeing service charges ranging from 27%–29%, an increase from the pre-pandemic average of 24-26%. In addition, resort fees have increased to $40–$50 per night compared to $25–$40 pre-pandemic. Resort fees may be negotiable, but service charges are not. However, in some cases, a share of the service charge be used as an internal administrative fee which may cover discretionary meeting costs.
A Rise in Meeting Room Rentals
We are seeing more room rentals than ever before, even for domestic locations. This is important to note for budgeting purposes. As best practice, M&IW always tries to negotiate reduced or waived rental fees, but many hotels are holding firm. To avoid excess rental fees, evaluate your set-up times to reduce the number of days required for each meeting room.
Higher Deposits and Longer Direct Billing Approvals
We are seeing more and more hotels require higher advance deposits for meetings. Direct billing approval can take up to 60 days to secure, so plan accordingly for short-term meetings. If the meeting request is less than 30 days out, pre-payment will most likely be required.
Limited Savings
M&IW always tries to negotiate the best possible pricing for your events. However, many hotels are no longer willing to reduce pricing for guest room rates, F&B minimums, or meeting room rental. We believe this is a short-term reaction as the hospitality industry rebounds from the pandemic, but it may become the norm as we move forward.
Food & Beverage Limits for HCP Meetings
With the increased demand for meetings and events, it is become increasingly difficult to find venues that are willing or even able to meet F&B limits for HCP meetings. Review and structure your agenda to maximize your meeting time and reduce the need for group food and beverage events, such as the welcome reception. Also, be prepared for less variety in breakfast and lunch buffets offered.
Firm Contract Deadlines
Just as they’re holding firm on decision deadlines, hotels are also maintaining strict contract execution deadlines. Typically, there are groups waiting in the wings for space if you don’t commit to the date in time. If extensions are needed, M&IW will always do our best to extend the deadlines, but please provide a realistic time frame that we can share with the hotel. In these instances, no news is usually not good news; transparency is key.
Partnership Opportunities Moving Forward
Help us help you! Our team at M&IW is always here to help make the sourcing process as smooth and quick as possible, but here are some tips for how you can best prepare for your future events even before we start working together.
Increased Lead Time
Build adequate time into your processes to accommodate the current environment. Begin sourcing new meeting requests with a longer lead time. Our recommendation is to begin at least 120 days out or more. This will allow enough time to accommodate these new trends and still allow the planning team to effectively manage the meeting logistics.
Flexibility with Meeting Space Requirements
Be willing to accept a slightly smaller space for your meeting or less than ideal meeting space flow. This could result in the difference between moving forward with a contract or having to restart the sourcing process, resulting in delays in planning. On the attendee side, they may not even realize a space wasn’t your first choice; flexibility and creativity in meeting layout can lead to new and exciting attendee experiences!
Confirm Details Before Sourcing
Confirm your meeting dates, attendee counts, and draft agenda before beginning the sourcing process. The more changes made during the process, the more red flags for our hotel partners, who may be unwilling to work with us as a result. If there are multiple date or location changes throughout the process, we’re less likely to secure favorable contract terms and deadlines.
Greater Stakeholder Transparency
Share these sourcing and contracting trends with your stakeholders and decision makers. Full transparency of the current environment is crucial as we move forward. Understanding the challenges of the hotel industry will help us work together as we collectively navigate the current landscape.
Select a Back-Up Venue
It is recommended to always have a back-up venue that we can immediately shift to in case there are significant availability changes during the contracting process. This allows us to seamlessly pivot to our back-up option and keep the process moving while avoiding further delays.
In Summary…
We strive to always be an effective sourcing partner during this “Wild West” environment. Our hope is that sharing our recent experiences will allow us to collaboratively work together to continue to locate and recommend the best possible venue for your live event.
We appreciate your patience and partnership during this transition back to in-person events. Together, we can overcome these challenges and continue to build the foundation for successful events now and in the future.
What’s Next?
Learn more about our sourcing and contracting services. Interested in working with M&IW? Contact us!
Contributor
Vicki Walsh, HMCC
Director, Event Sourcing
Meetings & Incentives Worldwide, Inc.