Having It Your Way: What Hotel Buyouts Do for Meetings

With unmatched opportunities for branding, employee motivation, product promotion and customized events, buying out a hotel for a meeting holds benefits that outweigh its often greater cost.

David Gabri

This is the viewpoint of David Gabri, president and CEO of Associated Luxury Hotels International (ALHI), a national sales organization that exclusively represents its 130 member hotels and resorts to meeting and event planners.

Travel Market Report spoke to Gabri about why buying out a property can be a worthwhile option for meetings and events.

Why isn’t it cheaper to do a buyout? Don’t you get a discount for booking all those rooms?
Gabri: Keep in mind that the hotel or resort will have to say no to a lot of customers. The property has to ramp down before the arrival of the buyout group, then ramp up again, which could create periods of not being as full as they might be. Also, they are not able to do business in their restaurants or other revenue generating facilities.

What are the benefits of a buyout for the company doing it?
Gabri: There are many. For one, it eliminates the obstacles to doing special things. For instance, you can have events in the lobby because no other guests will be there – and the same goes for restaurants. You can change the lobby every night so when guests come down in the morning, they enter a different environment. Similarly, you can have signage that you would not be able to have without a buyout because nobody will be annoyed by signs that don’t apply to them. You just can’t have a stronger branding message than taking over a property.

Very importantly, 100% of the staff is thinking only about your program; the spotlight is focused on your event. In turn, attendees come to feel that the hotel or resort is the home of their organization. Of course, the privacy factor is important when introducing a new product, or for mergers and strategic planning. And it’s great for building camaraderie among attendees and customers.

What kind of events are buyouts best for?
Gabri: They’re great for conglomerates with different business units who want people to interact but still be able to have divisional separation part of the time.  They work well for incentives and customer events. Some companies use buyouts when they have a big anniversary year; maybe it’s an exceptional year when spouses are invited. Buyouts are really good for retention of employees and acquisition of new customers. A buyout creates a huge branding opportunity

Do you have to buy out an entire property to achieve these benefits?
Gabri: No, there are many properties where you can buy out a wing or a separate building. For instance, Ponte Vedra in Florida has a separate 66-room building. And Sea Island in Georgia has a 42-room Lodge in addition to The Cloister. At Loews Ventana Canyon, you can buy out a wing of a building. You can have separate check-in there and otherwise treat it as a self-contained venue.

When is it best to do a buyout?
Gabri: It can be tough to buy out a property during the property’s high season.

Has AHLI done a buyout itself?
Gabri: Yes, we wanted to showcase how it worked, so we did a customer event at Chateau Élan near Atlanta a couple of years ago. We informally renamed it Chateau ALHI. We had 350 people and it made a tremendous impact on the guests. It’s a very effective way to do corporate branding.

When should a planner think about a buyout?
Gabri: As always, the planner has to lay out his or her objectives for the event. When they want to do something special and are asking how they can get maximum impact, they should think about a buyout. They should at least explore the option. But I emphasize again that, counter-intuitively, a buyout is not always cheaper and there is not necessarily a discount when you buy out a property.

The planner has to negotiate properly so it’s a win-win for both parties. Most planners would do this if they could because nothing is better for business. When an organization wants to make a statement either internally or externally, a buyout provides much greater flexibility to operate outside of normal policies.

What’s the outlook for buyouts?
Gabri: We are getting more requests for them because corporations are seeking to out-strategize their competitors. The market is very active as far as buying future meetings and incentives and buyouts are definitely in the mix.