Where do we go from here?

For organizations whose meetings used to perform year in and year out — from room pick-up to food and beverage minimums — the question couldn’t be more daunting, said Robert DeLuca (in photo), vice president/team director of ConferenceDirect.

“When the economy tanked, associations who were in contracts based on their history faced considerable attrition and performance penalties,” he noted. “While we were able to leverage our clients’ positions to provide relief, they can’t project as they did before about what happens next year.”

This unpredictability makes booking future business years out that much more difficult for associations seeking to limit their liability. For one client’s 2013 international convention, DeLuca locked in a minimum exchange rate in the contract. “The client was moving to a more expensive international city, and while the exchange rate at the time of booking was almost flat, we couldn’t predict what would happen in the next three and a half years,” DeLuca explained. With the rate locked up, it wouldn’t be in a worse situation from the day the contract was signed. However if the exchange rate were to improve in favor of the U.S. dollar, that calculation would then be applicable.

“When no one knows how volatile the global economy will get, this provides quite a bit of solace to the organization,” he added.

Indeed, the ability to problem-solve — such as engaging hotels prior to the point when an issue arises — is a key value DeLuca brings to the table. For example, meeting contracts he negotiates now often include a review date 11 months out, allowing the client to increase or decrease the block based on the prior year’s pick-up. To an organization whose pick-up fluctuates up and down from year to year — something that’s happening more and more — this is “invaluable,” he noted. And hotels are amenable to this more often than not.

This approach is especially appreciated by meeting professionals who each year must do more with fewer resources — audiovisual budgets get slashed, stage design becomes less elaborate, and some “pipe and drape” setups devolve into tabletops. But “we have to show our supplier partners that the organization holding the meeting is not just letting the cards fall where they may,” DeLuca noted. “It’s critical to effectively market the program, and the new approaches and innovative ideas that are different this year.”

DeLuca recently suggested a “last resort” idea to a few of his clients worried about attrition kicking in. Rather than be on the line for 75 percent of a room’s rate, the organization could offer to pay 40 percent of a newly registered attendee’s room rate. That would cut losses significantly, while increasing attendance and generating a registration fee. “It may be a wash dollar-wise, but money is not coming directly out of the organization’s pocket to pay attrition,” he said. Both clients thought it was a “really good idea, but hoped they wouldn’t get there. And they didn’t.”

But it’s because such challenges arise that strong partnerships with hotels and convention and visitor bureaus are needed now more than ever, DeLuca added. Some cities have become much more cognizant of “the value of steady association business compared to the volatility of the corporate market. Especially with attrition situations we run into, it’s all about the partnerships,” he said.

Indeed, across the board DeLuca has seen CVBs “step up their game and offer their best package early, when they have a shot at the business. Cities you would never expect are finding ways to provide complimentary convention center space on the front-end.” — Maxine Golding