Saving Costs on Citywides

Posted by TMG on November 20, 2017 9:05:00 AM

Citywides . . . the name alone can be scary and give the impression of high budgetary expenses such as rental, attrition, minimums, and ground transportation, to name a few. But don’t fear, as there are ways to reduce costs.

1. Engage the CVB/DMO Your CVB (convention and visitors bureau) or DMO (destination marketing organization) will be able to assist you with securing partners who are dedicated to the business of the city or destination. They can also assist in securing your room block and negotiating rates. Their job is to promote your event to the city and hospitality community to ensure their partners are servicing your program at the level they offered in their bid to host the event.
2. Early, Early, Early Engage your internal and external vendor partners early. Bring them to site visits throughout the planning process to ensure they are involved in decisions and can actively offer advice as you work through the challenges of your venues or the needs of the attendee. There are three reasons to contract your room blocks early:
1. Many events have groups who attend and are therefore looking to secure rooms together. To ensure these groups stay in your block, contract your rooms early, even if you do not plan to open your housing until closer to the meeting. This will ensure groups book in the block since you have the hotels.
2. Keeping rates down by minimizing the inflation of rates as demand increases. You will want to negotiate to ensure rates are competitive and comparative between hotels of the same quality, but you will also want to be fair to keep hotels from going too low, not just too high. The goal is to look consistent to the attendee. A five-star hotel at $159 and a three-star hotel at $199 does not look good for the planner, nor the hotel.
3. Maximizing your block at the hotels. Your goal should be to contract two thirds to three fourths of the hotel’s block for housing. Maximizing your block will ensure the hotel is selling more rooms at your negotiated rate versus rack or transient rates.
3. Contract Template for Housing Use a contract template, which is specific to your meeting or organization, to secure each hotel. Your template should ideally include the following items: no attrition fees, comp rooms, guaranteed rates, meeting space, site visit rooms, concessions, protection if the hotel changes ownership, the method of reservation, cut-off date, rebate, force majeure, right to cancel without penalty if the meeting venue suddenly becomes unavailable, plus other valuable clauses important to the hotel and your organization.
4. Multiyear Vendor Contracts As a citywide event, you are likely contracted several years into the future. Work with your vendors to secure multiyear contracts if they can offer their services in the other destinations. Multiyear contracts typically offer concessions and various discounts as incentives for committing to a long-term partnership.
5. Transparency Be upfront and transparent with your vendors; it’s the only way they will know your needs. Communicate budget goals and constraints, service expectations, historical successes and opportunities for improvement. Allow your vendor to truly partner with you to meet the goals and objectives of your event.
6. Shuttle Strategy Depending on the size of the citywide, you may need to provide ground transportation. Shuttle transportation costs originate with the number of hotels, distance to the venue and hours of operation. By maximizing your block, you are minimizing the number of hotels needed and therefore securing hotels as close as possible to the meeting venue. Also, it would be best to establish a shuttle schedule to have your attendees arrive and depart during peak hours, which is usually the beginning and end of each meeting day. You can lower your cost of transportation by offering shuttle service hourly during off-peak hours, or not offering it at all during the times the meeting is in session in order to keep the audience engaged at the venue.
While citywides can lead to high expenses, incorporating a few of these strategies should help you see cost savings, give you a better planning experience, and perhaps even make you shine in the eyes of upper management at your organization.

This article appears in the Facilities and Destinations magazine, Summer/Fall 2017 issue. Access this publication here.

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