The historical room block has long been a performance benchmark for an event; it provides important room demand information that provides numerous stakeholders significant advantages. Meeting planners are able to provide discounted room rates to attract more attendees and provides negotiating leverage to secure needed meeting space. Hoteliers can optimize revenue production not only through room nights sold, but also through even space, food and beverage, and other services. Destinations benefit from the increased spending and tax revenues paid by visitors coming in from out of town.
Unfortunately, we have all long suspected that use of alternative accommodations by attendees has led to a rise in rooms being booked "around the block," and the meetings industry has sought to shed light on the effects of this issue. Christine "Shimo" Shimasaki, Managing Director of empowerMINT.com and the Event Impact Calculator with DMAI shares in her recent blog post,
"Hotel room pick up is still an important metric to track and share with convention & visitors bureaus (CVBs) and hotels. In fact, we recently wrote an article dedicated to why historical pick-up information is important
However, only focusing on historical hotel room pick up has consequences, especially when CVBs and hoteliers utilize booking guidelines designed to maximize room night production for the venue or destination. If an event has a high percentage of attendees booking outside the contracted room block, then that event may be undervalued and the meeting planner may not be able to obtain the needed space and dates several years in advance.
This is especially true today, where 69% of planners recently surveyed by PCMA Convene (and sponsored by empowerMINT.com) are being more conservative and blocking less hotel rooms."
So with the release of this summer's blow-out study, what exactly do you need to know about this important topic that affects us all - from planner to hotelier to DMO?
1. It's a big number.
One in three. That's how many rooms the Tourism Economics study estimates on average are being booked outside of a traditional hotel block in the United States. There are many reasons for this, from price sensitivity to the boom in OTA transactions, from brand loyalty to the rise in availability of alternative accommodations, 34.1% is the average number we're looking at.
2. Not all events are created equal.
One in three being said, this is after all, just an average. Before we get all worked up and go applying this percentage across the board, there are numerous factors that determine the proportion of attendees reserving rooms outside of the hotel room block. Christopher Pike, Director of Impact Studies at Tourism Economics, and the lead economist on the study shared, "Factors including event size, facility gross square footage, market segment, and length of an event all influence the share of rooms booked outside the block."
3. Big players are on board.
The Event Room Demand Study was a joint effort supported by some of the biggest players in the meetings industry, including The Center for Association Leadership (ASAE), Center for Exhibition Industry Research Foundation (CEIR), Destination & Travel Foundation, MPI Foundation, and PCMA Education Foundation. As a topic that affects us all, you can be sure that the meetings industry is banding together to continue to explore the implications and how to address the issue as a collective entity.
4. Destinations are getting involved.
DMAI sees this as an opportunity for DMOs to assist both planners and hoteliers in more thoroughly understanding room demand for a given event. Therefore, the association is leading a sample of destinations to pilot a new tool that estimates total room demand given certain event parameters input by the DMO. This group of "Destination Pacesetters" is in the process of being onboarded for beta testing in the fourth quarter of 2015.
5. We're just getting started.
Shimo and DMAI's empowerMINT team are taking the discussion on the road to all major meetings conferences and tradeshows to raise awareness about the issue of booking outside the block and soliciting diverse perspectives from across the industry. There remains huge opportunities to explore the topic further, and we invite you to join in.
First up is an online webinar for meeting planners to introduce the study to an online audience. To sign up for live session on September 24, go here. If you can't make it, I recommend registering anyway, as you receive a video recording and presentation within a week following.
You can spread the word to any customers that would be interested in this issue using our DMO resource page here. We've included registration links, promotional banners, and webinar details for you or your marketing team to push through your DMO's digital channels.