Hotels survey: The road to recovery

Some 66 per cent of hotel groups questioned said that C&I business has
increased and 56 per cent described the economic climate as 'healthier'
or 'much healthier' than last year. This matches latest World Tourism
Organisation statistics that show international tourist arrivals reached
a record 780 million in 2004, an increase of 11 per cent.

Another important finding in the survey is the greater creativity in how
hotels market themselves to C&I clients. A better commission offering
for bookers, technology and the provision of more focused meeting
environments have emerged as trends, highlighting that hotels are
placing greater value on C&I.

This could be pivotal in smoothing out the traditionally rocky
relationship between hotels and event planners. This year, planners have
been particularly vociferous in their criticism, citing hotels'
inflexibility and a lack of understanding as barriers to an efficient -
and happy - working relationship.

Robert Enefer, managing director at agency The Conference People, says
that many hotels do not understand the speed with which agencies need to
provide information to clients. "Sometimes it's a language problem but
often they just don't understand the industry," he says.

Rezidor SAS is among those groups offering a more creative product. At
many Radisson SAS properties, planners are now able to hire private TV
channels on the in-room TV sets to show promotional messages about the
event as well as company branding. Olivier Jacquin, senior vice
president of sales for Rezidor SAS Hospitality, says technology that
facilitates an event is one of the biggest attractions for groups at the
moment."It can really add value," he says. "It can help to further the
event message and improve the quality of delivery. We think technology
like this should be available as standard."

Agency Small Planet managing director Clare Morrow agrees that hotel
technology is improving. "It's come on leaps and bounds," she says.
"They have poured money into it and it's really paying off for our
clients."

Other notable initiatives include Intercontinental's rewards club for
corporate bookers at more than 200 properties across Europe, with
members earning points on bookings to redeem against a range of rewards.
Park Plaza is currently planning a new commission structure for agents
for 2006, although details are not yet available.

Incentivising agents

Hotels are also looking beyond the usual commission rewards by offering
incentives to bookers. Britannia Hotel revamps its rewards programme
quarterly.

"Conferences are a way of ensuring core business," says group conference
sales manager David Mullis. "Incentivising agents not only boosts that
business but is a 'thank you' to those loyal to us."

Rewards for agents next year include mini-breaks at Britannia properties
and vouchers from high street retailers.

Maritz business relations director Amanda Stranack feels hotels are
definitely taking the C&I industry more seriously. "They've realised
that they are in competition with other destinations, not just other
nearby hotels, so they are sharpening up their act," she says.

The past 12 months have seen vast investment within the hotel industry
in both new and existing products, with Asia the main growth market.
Shangri-La now offers wi-fi and broadband in its hotel lobbies and
business floors and has expanded rapidly into China with ten new
properties planned to open by November 2007, including the Shangri-La
Futian in Shenzhen in early 2007. Raffles will open Raffles Beijing
Hotel next year, with Raffles Dubai and Swissotel Grand Shanghai
scheduled for 2007 - all with facilities dedicated to the MICE market.
"The C&I sector makes up around 20 per cent of our business, so we are
making sure the new properties have the right facilities and environment
for groups," says Raffles marketing and communications director EMEA
Beatrice Ganter.

In Europe, Germany and London are the top C&I performers. Kempinski
director of conference and incentive sales UK and Ireland Claudia
Schuitemaker says that Germany's broad accommodation offering makes it
popular. "Efficiency and good service standards are also draws," she
says. "And cities like Berlin are attractive because of their
history."

The survey doesn't throw up any real surprises in terms of the most
profitable C&I sectors, with the pharmaceutical, banking and automotive
industries on top. What has changed, however, is the average size of a
conference group. For most chains, events for groups of 26 to 50 have
been the most frequent in 2005, while last year's leader, events for 51
to 100 delegates, have fallen to third place behind the 101 to
200-delegate sector.

Sophie Walter, client marketing manager for London's corporate and
investment banking division of French bank Societe Generale, says that
this follows the industry trend for more frequent but smaller
conferences - in hotels and away from conference centres.

"Conference centres often have no atmosphere for small groups," she
says.

"If you use a hotel you get better - and warmer - service. And they are
more used to the catering side. Hotels realised a few years ago that C&I
is big business and have been refurbishing and upgrading accordingly.
But it's taken a while for the industry to recognise this."

HOTELS SURVEY THE ISSUES

These are some of the issues debated recently at the HBAA forum at the
Radisson SAS Hotel London Stansted on 8 September, and an MPI education
event. The latter, sponsored by C&IT, was held at London's Melia White
House on 12 September to discuss the relationship between hotels and
planners.

Staff turnover For an industry founded on the ability to create and
maintain relationships, the 50-100 per cent turnover of hotel operations
staff quoted by the British Hospitality Association (BHA) is a
problem.

Relationships between professionals - one buying and one selling - are
the key to successful negotiation and to ensuring quality.

"You can never really take for granted that you speak to the same person
twice, and you often find when you get to the event that details have
been overlooked in the handover to another member of staff," says Olive
360 director Paul Hussey.

But BHA chief executive Bob Cotton says that while turnover for
operations staff is high, the much lower turnover of management staff -
at around 25 per cent - is a more significant figure.

"As long as you have consistent management staff creating client
relationships and ensuring that the transitory staff are delivering the
appropriate quality of service, then there shouldn't be a problem," he
says.

Hussey and other planners do concede that the situation is
improving.

"I think that staff in the hotel industry are finally seeing that C&I is
not a job they do for a short time before moving onto something better;
it's a career and they can be influential," says The Phoenix Partners
director Rachel Hargrave.

Catering

The face of catering has changed drastically over the past three to five
years. According to the C&IT survey, hotels must cater for an average of
three different food types at any one event. The boom in fad diets, the
emphasis on healthy eating and the increasing number of multi-cultural
events mean that today's most requested menus include halal,
GI-friendly, gluten-free, wheat-free and low carb.

While hotels boldly claim this isn't a problem, agencies can recount
more than one occasion on which the hotel chef has "had a strop" about
the demands on his or her creative genius.

"These people need to get a grip," says First Protocol managing director
Mark Riches. "We've had several situations, particularly with American
groups, where the demands are high - no shellfish, no nuts, no skins on
tomatoes and no food in areas where it could be contaminated by smoke.
But in the end this is a service industry and they've got to give the
people who pay their wages what they want."

Terms and conditions

The biggest irritant for planners are 100 per cent cancellation
charges.

"Even if we cancel as far as three months in advance, many hotels still
want us to pay 100 per cent of the final bill," says Roche Products head
of conferences and events Caroline Hill. "But that far out they haven't
spent any money on F&B so there's no need to charge us that much."

Some properties have less demanding terms and conditions - agreeing, for
example, to reimburse charges if the cancelled space is resold. But this
has raised other questions - how does a client police that without
having to ring the hotel every day to see if the space is still
available?

"In the end it's a question of trust," says T-Mobile events and sourcing
executive Kate Sandford.

Billback

Agencies aren't banks - or at least they weren't last time we
looked.

But a growing trend is for corporate clients to ask the agency planning
their event to sign contracts with suppliers and pay invoices - on their
behalf. However, problems begin for smaller agencies when clients don't
reimburse them within the invoice period. Agents can't pay the hotel -
and get lumbered with the client's bad credit rating.

"Clients never pay within the requested time frame," explains Book-o-Tel
sales manager Nick Scott. "This means that we end up as a bad debtor. As
a small company we don't have the credit facility to pay the hotel
before the client has paid us. And because the hotel hasn't been paid,
they won't pay us our commission."

While distancing her company from this cycle, T-Mobile's Sandford adds
that many clients believe that handing responsibility to agents saves
time through not dealing with hundreds of smaller invoices.

"We just don't have time to negotiate every set of venue terms and
conditions," she says.

UK VIEWPOINT

Phillip Moston is sales and marketing director of Corus Hotels. The
group recently introduced Think Tank at its Bristol property, a new
concept for brainstorming sessions that has helped boost C&I traffic to
the property.

If successful, the concept will be rolled out across all properties.
There are 48 hotels in the Corus chain - 46 in the UK.

"C&I business is more important than straightforward room sales because
there is a bigger spend, with additional F&B income.

"New initiatives for this year include a dedicated meetings and events
sales team and more flexible meeting packages, including half-day,
eight-hour and 24-hour rates. Customers are more discerning nowadays so
we need to be more creative. Next year, add-on packages will include ice
cream and chocolate breaks. We have revamped our standards to make sure
our quality is right."

INTERNATIONAL VIEWPOINT

Olivier Jacquin is senior vice president of sales for Rezidor SAS,
parent company for Radisson, Park Inn, Regent Hotels and Country
Inn.

Rezidor SAS has 253 properties worldwide.

"C&I is our most important segment at Rezidor, and we are seeing
year-on-year growth. This year, we have become the first international
hotel chain to offer free broadband access in our European Radisson
properties - we think that this is something delegates will soon expect
as standard.

"We also show commitment to the C&I sector through staff training. Over
the past two years, more than 2,500 of our European staff have attained
the MPI Global Certification in Meetings Management.

"Key openings include the 250-room Radisson SAS Hotel at Disneyland
Paris in December this year, plus the 181-room Radisson SAS Hotel,
Astana in Kazakhstan in January 2006."