23 Apr Prestige Perspectives 2019
A retrospective look at our past decade and preview of 2019 and beyond.
As we enter our 33rd year of serving our clients at Prestige Global Meeting Source, we look back at a decade of significant peaks and valleys in the events industry, but also with a strong optimism for the years to come.
Over those years, we have grown significantly as a company and earned our place as one of the largest site selection companies in the world through partnership, advocacy and “elevating the room” with both our clients as well as our industry partners.
It is from a place of experience and knowledge that we share our insights with you, our clients and hopefully future clients. We have been very fortunate to earn a seat at the advisory tables of the largest hotel brands on the planet and we share our experiences through the thousands of events and hundreds of thousands of room nights we place in North America and abroad every year. As 2018 became a page in the history books, we reflect below on what has been and what may come.
Supply & Demand Tension
Looking back upon the 2008-2010 economic collapse, access to capital became extremely restricted, and as such any hotel growth we saw in the 2010s was overwhelmingly in the limited service (Hyatt Place, Hilton Garden Inn, Residence Inn, and the like) and lifestyle properties (Kimpton, Autograph Collection, Hyatt Centric, etc.) with extremely limited growth in the upper-upscale and luxury market segments.
While we did see growth in the “big box” luxury market with properties like the Gaylord Denver, Fairmont Austin and what will be the Omni Louisville, these are predominantly convention hotels geared towards putting these second-tier cities on the national map, working to build their status as convention hubs. What little construction that took place in the upper-upscale/luxury space tended to be a take-over or re-imagining of an older, already existing property.
Flagship luxury brands like Ritz-Carlton, Four Seasons and Accor have shifted their resources in the last 5 years towards the Asia/Pacific Region as China’s economy continues to see explosive growth, driving this demand.
While the demand for upper-upscale and luxury properties in the 250+ rooms space continued to grow in 2018, the inventory of this market segment has not, creating significant rate compression as demand outpaced supply.
Importance of Being Strategic
Average Daily Rate (ADR) and Occupancy rates are at the highest levels they’ve ever been and as a result, now more than ever, it is imperative to be savvy about how you source your hotels, capitalizing on data and data-usage to best position your program to receive the optimal results.
Providing historic data (where did you go previously? What did you spend on F&B? What did you spend on AV?) and program flexibility (shifting dates, patterns or space needs) provide properties with more tools in their toolbelt to get you what you need. They are a part of the larger picture encompassing the total event spend for your program and what that would mean to a property, allowing these properties to shift profitability between all revenue streams to provide the most competitive proposal. This, of course, doesn’t come without an established relationship and trust between both parties to ensure that they aren’t taking advantage of your position. This is where relationships matter most.
Relationships – The Other Leverage
Trust is just as important as financial volume as the hotel industry continues to evolve. Understanding your data, finding your partners and funneling volume to those partners in exchange for more favorable outcomes is a foundational part of every Strategic Meeting Management (SMM) discussion. One of the cornerstones of these relationships is building your “Power Team.”
A Power Team is comprised of people and organizations around you that add to your leverage. Entities like Prestige, Destination Management Consultants (DMC), Hotel National/Global Sales Officers, Cruise-lines, etc. all maximize your experience & spend. When deployed properly, there is a synergy between the planner and their Power Team resulting in much more favorable outcomes, both experiential and financial.
Understanding the Market – Where is the Value?
In the United States, wherever we have a non-stop, hub airport, it drives a buyer-mentality around conferences & meetings. We have all heard the phrase “I don’t want to have to connect to make it there” or “I can’t be more than 30 minutes from the airport,” which is why these hub markets like Orlando, Las Vegas, Chicago, Miami, Scottsdale/Phoenix are all the highest demand cities for meetings, conferences and events. As demand increases in these and other markets, leverage is lost in your negotiations.
Enter “motivated markets.” Destinations such as Newport Beach, Tucson, Santa Fe, Charlotte, Reno and Louisville are all up-and-coming markets that provide significantly more value over major US destinations. The Portland, OR CVB uses the phrase “the distance is worth the difference,” which is directly applicable to these secondary and tertiary markets. If 20-30% of your group may have to take a connecting flight, but you can save $50-100/night on your room rate, or obtain a more favorable space, it is certainly worth considering.
Utilizing Your Resources in 2019 and Beyond
With this information, we encourage you to engage with your Prestige Global Meeting Source Sales Director to dig deeper into this information and help arm yourself with the best tools available to you. We look forward to serving you in 2019 and beyond!