Mr. Arenas

Meetings & Conventions

Making Big Business Out of Small Meetings: Tapping into the $10 Billion Day-Meetings Market

By John Arenas, Chief Executive Officer, Worktopia

If, as most of us believe, it is just as difficult, time-consuming, and therefore costly, to service a small request as it is to negotiate a large one, why bother with the sardines when catching tuna is more profitable?

When it comes to meetings, this is a ten billion dollar question. In a $124 billion industry, 80 percent of all meetings have 50 participants or fewer - a segment of the business worth $10 billion a year. Is the opportunity worth the trouble? To put it another way, the typical day-meeting generates approximately $4,000 to $6,000 in total revenue for a hotel. If property's small meeting bookings increase by just two meetings per week, the revenue impact could be over half a million dollars a year. And, because most small meetings are regional or local in nature, the chances of repeat business are high if the customer is satisfied the first time.

Nevertheless, given the choice between a mega-meeting and a handful, why would anyone choose the latter? The answer lies in avoiding the choice: the future of the meetings industry is likely to be letting automated, online programs handle planning and booking the small meetings quickly and efficiently.

When deciding how to capitalize on the small meeting market, there are two important factors to consider. The first is selecting the procurement software solution or solutions that represent the right fit with the hotel or brand. The second is selecting the right people to work with - the marketing channels - who will best drive incremental business at a high rate of return on marketing investment.

Considering Procurement Solutions

The stakes are high. The right automated procurement solution means increased market share, competitive strength and lower overall costs of sales and marketing. Ideally, the right solutions allow the hotel or conference center to maintain control over pricing and inventory availability, while giving planners instant access to these variables along with an ability to measure and manage the planning and procurement process. It should be noted that the benefits work both ways: planners who have access to such automated tools gain competitive advantage as well.

Thought it might be described as a fledgling business, there are several models or approaches that are currently in play for providing a better small meetings procurement process. Recent innovations include easily prepared online RFP's, or "eRFPs," for standardized contracts that quickly expedite the meeting request; "Direct Booking Service" that provides instant quotes, availability and live booking capabilities; and software that integrates CRS's with sales and catering systems.

eRFPs like Starcite's EasybookTM are a "lite" version of the standard, full-fledged Request For Proposals that have been in use for decades. The idea is to provide professional meeting planners with an appropriately simplified structure (sometimes with pre-agreed contract terms and pricing) that specifically suits the needs for day-meetings and other small meetings. In the process, they speed communications and responsiveness between planners and hotel sales teams considerably.

Direct Booking Services for small meetings, like Starwood's Meetings in a MomentTM, Hyatt's e-mmediate MeetingsTM, Worktopia.com and Hilton's e-EventsTM, provide web-based booking tools that essentially replace the traditional research, planning and negotiating process by allowing the user, whoever he or she might be, to search, get pricing and request a booking of meeting space. Both e-Events and Worktopia allow the user to continue on to book their overnight accommodations in the same online session. Each of these services has focused on the small meetings market and can be used by professional planners or the general public.

Thirdly, there are several other ongoing branded initiatives to allow full integration of the meeting space sales and catering systems with the hotel's CRS for room-nights. No doubt there will be more opportunities coming along for planners to book meetings end-to-end, in real time, from meeting space to room-blocks.

The good news for hotels is that they generally will not be limited to tapping the meetings market with just one of the proprietary procurement solutions I've described. Each solution serves a unique marketplace and can deliver customer inquiries, RFPs and bookings to the same lead management system. The best approach, therefore, will be to deploy all three types of software programs, if possible.

Accessing Marketing Channels

The traditional marketing channel for meetings has been the professional meeting planner. As the pressure of shorter lead times, cost controls and performance measurement creates more challenges for these professionals, they frequently find themselves having to do more than ever with the same resources. Clearly, automated planning and booking solutions represent a powerful tool to add to their portfolio of resources by offering a quick, simple process that requires little more of their time.

Travel agencies, many of whom specialize in corporate clientele, represent another growing marketing channel as they continue to seek ways of improving service and generating new revenue streams. These professionals typically use GDS-based systems, like Sabre, to research meeting venues. It is important for hotels and conference centers to tie into these tens of thousands of agencies through the hotel's procurement solution because travel agents can produce incremental, short lead time business and deliver continuing customer relationships.

In addition to meeting planners and travel agents, hotels' existing customers and groups can be a great source of new business, particularly if they are empowered to buy from the property through simple-to-use online systems. Adding improved procurement processes for existing customers can also increase "customer wallet share" - the share of the dollars the entire organization spends on meetings and travel.

Hotels should not ignore the traveling public in their use of automated solutions for small meetings. There is a fast growing market made up of administrative assistants, small and medium sized businesses, and a broad range of social, civic, educational and recreational organizations as well as leisure groups and clubs who are now using the web to plan and book meetings. Like other consumers, they now want and expect to book meetings on-line in real time, like they do for every other aspect of travel, from hotel rooms and air, to car rental and even restaurant reservations.

In choosing automated small meeting procurement solutions, hotels should consider these needs. Solutions that are user-friendly, designed for use by a novice but have the sophistication and flexibility that professional planners demand should be considered. The major hotel brands are already developing such capability for their properties, and independent hotels can now put "white label" versions of direct meeting booking engines on their websites, to maximize their web marketing investment.

Ready or Not

With all of the activity and innovation in the world of online automation, there is no doubt that the area of small meetings represents tremendous opportunity. Ready or not, consumers, including professional meeting planners, have brand new expectations for doing business. For those that embrace the cutting edge of automated procurement solutions, the future not only means less phone tag, fewer lost faxes and better use of everyone's time, but getting all the benefits of fishing for sardines as well as tuna.

Founder of Worktopia, John Arenas has more than 20 years experience in commercial real estate. As chairman and CEO of STRATIS Business Center, Inc., Mr. Arenas brought the 1997 start up to a merger with Regus Business Centres (RGU: London Stock Exchange). STRATIS investors realized an eight-fold return. Prior experience includes tenure as a commercial real estate lender for Citigroup and project engineer for Turner Corporation. Mr. Arenas holds a B.S. degree in civil engineering from Rutgers and a Masters degree in business administration from the University of Michigan. Mr. Arenas can be contacted at 914-468-0812 or john.arenas@worktopia.com Extended Bio...

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