Tuesday, March 19, 2013

How Will Generational Buying Preferences Transform the Meetings Marketplace?

The meetings (MICE) industry is in a state of flux with matures (those aged 66 and older) retiring and millennials entering the workplace. It is projected that employment in the North American meetings market will grow by a massive 44 percent through 2020. This rapid growth will usher in a new era of new expectations and demands for conference centers seeking to woo a meetings planner’s business.

It was with this in mind that the International Association of Conference Centers (IACC) Emerging Trends Committee and Development Counsellors International (DCI) partnered together to survey meeting planners of various generations—from boomers to Xers to millennials. The findings of the survey were announced at IACC-Americas 2013 Conference in March.

This survey explored whether there are generational preferences among meeting planners and if these preferences shape how meeting space is selected. For the purpose of this study, the generations were defined as mature (age 66 and older), baby boomer (Age 47-65), Generation X (Age 33-46) and Generation Y/millennial (Age 18-32). The largest cohort of respondents were baby boomers followed by Generation X.

On average, the planners responding to the survey organize meetings for 11 organizations annually. A majority of respondents, 76 percent, were familiar with IACC. When asked the importance of holding events at an IACC facility, meeting planners responded that it was somewhat important.

Choosing and Declining Conference Facilities 
According to the survey results, the most important factor in choosing a conference facility is ease of connectivity via WiFi followed by the onsite presence of a staff planner and conference room design. When asked to further elaborate, respondents noted that adequate meeting rooms/flexibility of the space and the appeal of destination were highly important in selecting the location of meetings they had recently planned.

The top reasons for declining a facility were cost and excess charges followed by inadequate meeting space, location appeal and appearance/condition of the property.
Perhaps the most surprising fact, however, is that the preference of attendees—those individuals for whom the meeting planner is planning—actually didn’t rank as important. This is an interesting consideration for destination marketers who have long been trained to think about their “end audience” when crafting their conference center sales and marketing plan.  It turns out there are always exceptions to every rule.

Key Generational Preferences
Overall, the generations have very similar preferences. There are a few differences to keep in mind, however, when selling to meeting planners of different generations.
  • Matures: When pitching a meeting planner of the mature generation, provide details on business-friendly guest rooms, spaces that are conducive to learning and collaboration as well as off-site activities that are within walking distance of the venue.
  • ·         Baby Boomers and Generation X: Promote your Wi-Fi capabilities. Like matures, these generations are also interested in spaces that are conducive to learning and collaboration. They are apt to decline a facility for inadequate meeting space (size/quality/layout) as well as cost and/or excess charges.
  • ·         Generation Y: The top two reasons that this generation is likely to decline a facility are the same as baby boomers: inadequate meeting space and cost/excess charges. However, Generation Y cares deeply about the appeal of the destination, so it is beneficial to share entertainment and evening activities that are available off-site. In addition, this younger generation is interested in space that provides the ability to recognize key performers, so if you have a stellar set up for an awards banquet, make sure to highlight that in your discussions with this generation.

To download the full results of this survey, click here.

Tuesday, March 12, 2013

Getting the most out of Banquet and Catering

by Neil Pompan, CMP; President, PHG, Inc.

Smith Travel Research is on the verge of releasing a new index that will measure Banquet and Catering contribution to property performance.  Unlike guests rooms and average rate which are for the most part objective; the factors involved in BnC success such as event room sizes and configurations, menu complexity, upselling skills, and the like are subjective. This will no doubt create a great deal of debate because of the inherent conflicts of comparing ones performance against others. 

I predict that in time the debate “noise” will settle down and the industry will agree to accept the inconsistencies in comparison in favor of the consistency of a regular metric that will give operators the ability to compare period to period within their respective markets.  In time, such an indexing report will be noticed by owners and developers and as such, it will integrate into the analytical culture of how property success is measured and understood.

This is a long overdue revolution.  Food and beverage, and specifically banquet and catering, has always been the misunderstood stepchild of a properties operations and revenue streams.  We all want more events, higher average checks, better meeting room rentals.  We all have meetings on how to improve performance in this area and we comfort ourselves with the action plans we create to make such improvements. But how many of us understand and measure, for example, the difference between actual banquet and catering average check versus retail opportunity average check.  The difference between the two is money on the table. How many of us have a strategy in place to handle price push back that does not compromise profitability? How many of us are manually entering more than 10% of menus onto BEO’s.

The following is a list of questions a property should ask and answer if they want to feel confident that they are maximizing the potential of their banquet and catering profit contribution:

  • What is your strategic pricing plan for your banquet and catering menus compared to your competition in all meal periods?
  • Have you calculated your retail opportunity average check and is so, how often does is vary from your actual performance?
  • What is your acceptable variance factor between retail opportunity average check and actual average check?
  • How do you measure variances in average checks by market segment to maximize revenues?
  • What is the menu audit process to evaluate the efficiencies in your property's space management system?  Has an audit been completed within the past 12 months?
  • How is the information from a space management system audit used by your team to maximize banquet and catering revenue generation?
  • What percentage of menus is manually entered on BEO’s? What practices do you employ to minimize manual entry?
  • How do you determine banquet and catering minimums and adherence to the guidelines to ensure profitability is not compromised? 
Sometimes the hardest thing for and operator to do is take a step back and devote the time needed to fully understanding a situation. With only so much time in a day, operators need to ensure they are being as effective as possible in what they are selling and servicing to maximize profitability, otherwise all the work they are currently doing is being wasted. The questions above, and many more, once understood and answered, will serve to help a property map out the strategies and tactics needed to make the banquet and catering function operate at maximum profitability and become better prepared for the analytical performance measures that are on the horizon.