| As we move past the midway point of the 2009 air show season and start thinking about the 2009 ICAS Convention (December 6-9 at the Paris Las Vegas Hotel), I wanted to talk about the single biggest topic in the meeting industry today: room blocks and attrition. And, in particular, the impact that these issues could have on YOUR organization.
As most of you know, the ICAS Convention requires a lot of meeting space. Our exhibit hall, our general session/banquet room, and the rooms we use for individual break-out education sessions will typically add up to well over 100,000 square feet of space. In order for ICAS to get the meeting space we need without moving the entire event to a large and expensive stand-alone convention center, ICAS must commit to substantial blocks of sleeping rooms at a large hotel like Paris. Hotel managers allocate meeting space to groups like ours based on the percentage of sleeping rooms that we use in the hotel on a day-by-day basis. Hotels will not just sell the meeting space without a room block commitment as meeting space is used as an enticement to sell sleeping rooms to other groups.
A hotel’s primary commodity is “sleeping rooms.” To protect the value of the rooms that have been taken off of the market and set aside for a group/event, hotel managers typically include a clause in their contract that provides monetary damages if the event's attendees occupy fewer rooms than agreed upon. This slippage by the group is referred to as attrition. Damages from attrition are usually determined based on the lost revenue to the hotel from the unused sleeping rooms and can run into many tens of thousands of dollars.
Over the years, ICAS has negotiated and signed dozens of hotel contracts for ICAS Conventions and the attrition clauses were never a problem. Indeed, our past history of sleeping room usage made us highly desirable to prospective host hotels. But with the advent of internet and the recent economic downturn, the entire meetings industry has had much more difficulty trying to fill our room blocks. In fact, the problem has become so significant within the meetings industry that task forces have been developed for the sole purpose of identifying possible solutions to this widespread problem. And that problem has begun to affect ICAS.
Some of the solutions being used by the industry include not being able to register until you book a room in an official group hotel; offering discounts to members who both register for the convention and reserve a room in the host hotel; charging an additional fee beyond the registration fee to convention delegates who do not stay at the host hotel, or offering incentives and premiums to those attendees who book within the block of rooms reserved by ICAS.
At this year’s ICAS Convention, we will have a drawing and give away a flat screen television to one lucky convention delegate. To qualify, you only need to be listed as having reserved a room in the block of sleeping rooms reserved by ICAS at the Paris Hotel. In the future, however, ICAS may be forced to take more dramatic steps to minimize attrition and avoid the potentially significant penalties.
Most of all, we want to educate members and help them understand the impact that attrition could have on our convention and our organization. It’s never been a problem in the past, so we’ve never felt obligated to explain this aspect of the business, but times are changing. Booking within the ICAS room block will help us get the meeting space we need to conduct the convention, meet our obligation to the host hotel, avoid hefty attrition fees, and keep the registration fees down. Thanks in advance for your help in helping us meet this considerable challenge. |
