In the past, a rebounding economy meant that the booking windows for meetings lengthened as planners faced tighter hotel availability. So why do meetings’ booking windows appear to be shorter than ever, creating challenges for planners and hoteliers alike?
And is this a trend that’s here to stay?
A structural shift?
Some in the industry think there has been a structural shift because of the depth of the recent recession. They also observe that technological advances make it easier to put a meeting together on short notice. But others see a cycle whose end is in sight.
Jack Thorne, vice president of sales for Hyatt Hotels, and a veteran of the industry, said he was surprised that booking windows for meetings have shortened – despite business being stronger in 2012 than in 2011.
MPI survey indicates ‘new normal’
“Short lead times, which have been gradually accepted as the new normal, continue to affect meeting professionals,” noted MPI’s February 2012 Business Barometer.
In February, 11% of respondents to the barometer noted short lead times being an issue; that was up from just 3% in December.
The barometer quoted one respondent as saying, “Shorter lead times are resulting from continuous changes in the market. We have to keep innovating to stay ahead of the game.”
“Booking windows continue to be very short,” said Barry Goldstein, chief revenue offer at Dolce Hotels and Resorts, which operates many meetings-oriented properties.
“Our booking window is still within a 45- to 60-day average. In many cases, meeting budgets are being released for each meeting – providing a very short window for bookings.”
Hotels have learned to adapt to the changed landscape, according to Goldstein.
“It’s critical that hotels be very flexible and creative to fit the meetings into the availability of the property. In many of our properties we have established an executive meetings manager to focus on short-term meetings within a certain size.”
Some hotel executives think that improving occupancies will soon cause booking windows to lengthen as planners begin to experience tight supply.
“As demand for program space continues to grow, this could provide availability challenges for planners, particularly for 2014 and beyond,” said David Gabri, president and CEO of Associated Luxury Hotels International, a consortium of meetings-focused hotels.
“Rates are expected to rise, and the extraordinarily favorable terms and conditions that had become commonplace may be disappearing. Prudence says to act quickly to secure the venues, dates, rates and terms that will best serve your organizations.”
Signs of change
Some hoteliers are already seeing the situation turn around due to rising occupancies.
“We are witnessing an expansion of the booking window,” said Michael Dominguez, vice president of global sales for Loews Hotels. “This is being driven primarily by planners being told ‘no’ as far as availability or rate flexibility for the first time in the past 18 months.
“This is being driven by unprecedented demand that is also driving pricing power in key markets.”
Last-minute bookings carry risk
Planners take a risk when booking space at the last minute, as they might “be paying a premium” for last-available rooms, according to Eric Whitson, director of sales and marketing for the National Conference Center in Leesburg, Va.
“The problem is you don’t know how desperate that hotel is,” he said.
Dolce’s Goldstein advised late-booking planners to be flexible and to be open to using alternative spaces for food and beverage events. For example, an alternative to banquet space might be the use of food trucks with tables set up outside.
To ensure quicker turnaround time on short-term bookings, he also recommended that planners create master accounts that can be applied to multiple meetings and keep requests for proposals simple.