Booking Small Meetings Online
In the coming years, the small meetings market is expected to shift toward online automated transactions, in much the same way that the transient travel market has over the past decade. After all, online booking for transient travel has been a resounding success. Self-booking tools are estimated to lower transaction fees by 40 percent to 70 percent compared to going through a ticketing agent, according to a 2006 report on online travel by the Sherman, Conn.-based hospitality research company PhoCusWright Inc. The report also concluded that negotiated corporate rates for air, car, and hotel drop by 3 percent to 5 percent on average when using an online process.
While meetings are a relatively complicated purchase compared to business travel, most small meetings only need a room block, air travel, a meeting room, simple catering, and audiovisual services. For all of the creative efforts that go into planning major corporate events, the majority of small meetings are simply transactional, says Lorraine Sileo, vice president of information services at PhoCusWright. Price and availability drive sourcing behavior for this market segment, not creative preferences, she says.
Big Spend on the Small Stuff
The stakes are high. Philadelphia-based meeting-technology provider StarCite Inc. estimates that small meetings of 50 attendees or fewer comprise as much as 80 percent of some companies' meetings spend. That meshes with estimates from American Express Business Travel. “We see that among our customer base, 80 percent of spend falls into the realm of small meetings,” says Chris Wilkes, the meetings practice leader for advisory services for New York-based AEBT. She adds that “small meetings,” in this case, are defined as events with fewer than 100 attendees. “A lot of the companies that traditionally focused on those high-profile, high-impact events are starting to see this as the next realm.”
For Robin Buzzeo, director of corporate travel at Hawthorne, N.Y.-based Taro Pharmaceuticals, investing in a small-meetings technology will make sense when it can help her to leverage a combined transient and small-group travel volume with vendors. “It's also about getting an idea of what we're actually spending on these meetings,” she says. “The fear among all of us is that we don't want to complicate matters any more than they have to be. You need to have software that is easy to use, that doesn't make the sourcing process more complicated for a small meeting,” she says. Every company has its own way of dissecting and analyzing its meeting-volume data, she says, and a universal tool would have to allow buyers to access the data that they require.
Forces for and Against
Fueling change is an expected growth in the number of small meetings, hotels' need to reduce unqualified leads, and the higher revenues generated by online business. However, factors holding back developments include incompatible technology systems among hotels, hotel chains, and other distribution channels, and a lack of a centralized hotel inventory.
The holy grail of booking small meetings online is a tool that allows planners to contract with any meeting facility in real time for rooms, meeting space, F&B, and AV services; load pre-negotiated rates and contracts; book air; track spend; and integrate with the transient travel system to report a company's total spend with a particular property or chain. Clearly, the industry is not there yet, but Sileo, for one, expects to see the market evolve quickly through 2007. Indeed, several companies have recently upgraded small-meetings technologies that make strides toward a more comprehensive product.
For example, Hilton Hotels Corp. on March 15 announced a re-launch of its Web-based e-Events for blocks of five to 25 sleeping rooms. The tool has expanded to include meeting space, F&B, and AV services in one online transaction. Customers must agree to a standard contract, and prices are nonnegotiable. “This is a paradigm shift. We are expanding and enhancing the way that our hotels do business. We really have to do this in steps,” says Bob Brooks, vice president of e-sales at Hilton Hotels Corp. “Eventually, a few years from now, every major hotel company will have this tool.”
As technology develops and partnerships are formed, online booking tools for small events are likely to become more comprehensive and available, Sileo says. Observers agree that a common distribution platform for all hotel chains would go a long way toward automating booking for small groups. Ideally, one day, meeting buyers could access their air, ground transportation, and all other travel needs through the same system.
One Day: Meeting Content on a GDS
Global distribution systems are electronic supermarkets for travel managers. The legacy systems — Amadeus, Galileo, Sabre, and Worldspan — provide the backbone to online travel sales. According to the Interactive Travel Services Association, a GDS on any given day can access more than 1 billion airfare combinations, 750 airlines, 50,000 hotel properties, 400 tour operators, and 30,000 car rental locations. Even restaurant reservations can be processed through a GDS. So why not meetings?
That question is being asked more frequently as small-meetings management comes to the fore. Could small corporate meetings be booked and managed using the same systems as their corporate travel cousins?
Some agreements between providers of meetings-related inventory and GDSs have already been announced. Southlake, Texas-based Sabre Travel Network in October announced that it had included Harrison, N.Y.-based Worktopia Inc., an aggregator of meeting-room inventory at hotels and other venues, in its package of sourcing tools for agents. Also last year, Toronto-based meetings tech company Arcaneo Inc. announced a partnership with Madrid-based Amadeus to provide customers with a link to airline inventory.
In the corporate travel world, travel managers negotiate for preferred rates with hotels and airlines once a year. Those negotiated rates are then loaded into a GDS for bookings throughout the year. The systems make their money through transaction fees, which are charged by travel segment. The structure and amount of these fees is a fiercely debated issue among airlines, the distribution channels, and the agencies and buyers that access the content.
Pricing is one potential obstacle to listing meetings content online on a common system, but a model already exists that could work, consultants say. Conference centers traditionally offer a per-attendee, per-day complete meeting package pricing system. This model could work for GDS rate loading because instead of negotiating for individual discounts on services or space, planners could negotiate for a CMP rate with their preferred chains once a year.
Another obstacle to getting meeting professionals to use a GDS for small meetings might be the same trouble that travel managers deal with: Hotel properties are sometimes slow to load the negotiated rates into the system, or they may load incorrect rates. A host of companies offering auditing services has sprung up to help buyers ensure that the rates they worked so hard to get are actually being used in their travel programs. “It all goes back to hotel procurement management, which is what we do. We don't have anything on the group side at the moment, but we're certainly open to expanding into that at some point,” says Bob Peper, CEO of Colville, Wash.-based Lodging Logistics, which monitors negotiated rates for its customers to ensure that they are loaded correctly into the distribution channel.
Clearly this is an area for small business owners to watch and that could make their meeting planning much easier in the future.
Adapted from article by Corrie Dosh, Meetings.net
return to the Destinations index page |
