Dealing with hotels is an integral part of association management. Here are a few facts that board leaders need to be aware of, and understand the pressures on the event manager.
Wishful thinking can be costly. Sometimes volunteer leaders will give management instructions to secure a venue for many more attendees than in the past. This usually comes out of a sincere belief that this year will be different. The program being planned will draw a huge crowd. The problem is that if you reserve sleeping rooms, meeting space, and food and beverage and the numbers don’t come in, your group can be hit with attrition fees. These charges add up fast, especially if sleeping rooms are involved.
Hotels typically set attrition at 90%, though this can be sometimes negotiated down to 80%. This means that you must pay for that percentage of rooms not filled or food not eaten. Most conferences require that attendees pay for their sleeping rooms but attrition on sleeping rooms falls on the organization. For example if you have a conference that runs from a Friday night reception and ends the next day after lunch, the room cost might be $300 for one night and the food is $200. The per person cost is $500. If you contracted with the hotel for 100 people, and you have 80% attrition, you need 80 people to avoid attrition. Let’s say you have only 65; that is a deficit of 15. That means the association loses $7500. Scale this up for a larger meeting, and the outcome can be catastrophic.
There are, with one evening meetings, no shows and walk-ins. Getting the count right is more of an art than a science.
There are ways to deal with this kind of situation proactively. Work with your association’s management to ensure growth, but without paying more unless the growth happens.
One strategy is to look for a meeting room larger than you think you will need. That allows you to add tables.
When you make the original estimate of attendance, make it on the low side. This is what will go on the contract.
Timing varies, but 3-10 days out it is necessary to call in a count. That is your guarantee. The hotel rep may decide to move you to a smaller or larger room based on that number. With most venues, you can add guests after the final count, but some are now charging a penalty for each person over the original count.
It is common for the original count on the contract to be higher than the guarantee called in the specified number of days. If the meeting planner fails to call in with the guaranteed count the group will be stuck with what is in the contract.
To comply with Sunshine Act rules, medical societies funded with industry money are required to have buffets. Buffets are notorious for having extra food. Even when you get the count right, there will likely be food waste. It is tempting to deliberately underestimate the number of attendees, but most venues count plates, and do not set the room for many extra people.
There is something that hotels won’t generally mention unless you ask. Most have what is called a “hospitality rate.” It is possible to reserve a block of up to 10 rooms without a guarantee or attrition. This is ideal for small meetings, or meetings where most attendees are local.
One way to save money is to order a pasta or tortilla station.
Hotel invoices are complex. It is best to let management review the bill. They will know what was and was not ordered, and can check for accuracy. The ED can advise the treasurer about approving the bill for payment. Sometimes treasurers will delay their approval because it is a big bill with lots of details, and they need time to review. Most payments are due from immediately following the conference to 10-30 days following the event. A late payment can do serious damage to an association’s credit rating. Also, hotels talk to each other, and may decline to bid if your group was slow to pay. If you had your event at the Hilton the previous year and you’re moving to the Marriott, don’t assume that they will not be talking to each other. Remember, management can’t pay a bill if not approved. Don’t be the one who destroyed your association’s credit.
