Association meeting planners need to know and understand revenue management as it applies to hotel negotiations and contracts. You will gain a significant advantage if you understand the basic economics of how meeting facilities approach the business of association meetings.
Revenue management is a process of making better business decisions based on supply and demand. When supply is low relative to demand, rates tend to increase. When there is a surplus of supply versus demand, rates drop.
Ultimately, the true value of a hotel room night is the point where supply and demand intersects based on your location, dates and other specifications. To give your association and attendees the best rate and to leverage your meeting budget, planners need to understand meeting facilities' low demand periods. This is where you can achieve the best meeting values.
There are a few simple revenue management and control mechanisms that you can implement to gain more control over the meeting's cost:
- First, start by booking early - at least ten months or more in advance. This allows you the extra time to capitalize on the property's uncertainty in quantifying market forces.
- Second, try to be flexible. By saying "That will work" to a question of shifting your arrival date by a day or two, you may be able to significantly lower the hotel room rate for your conference. If you are willing to check in on a non-peak day of the week, you'll find the supply and demand theory working in your favor.
- Finally, you should book multiple meetings or programs at the same meeting facility, even if they are spread out over a 12 or 18 month period of time. This leverages your buying power and negotiating clout.
Have you found any success with these three key revenue management mechanisms within hotel negotiations at your association? What other tips can you offer association staff professionals?