Talk to most meeting planners and they will tell you with the advent of electronic booking engines and now Airbnb, they know some of their attendees will book outside of their block for any number of reasons including: to secure better rates, their loyalty to a hotel brand, location, etc. But how many? And how does this practice affect their negotiating power when trying to secure room blocks for future dates?
Ultimately, there is real power in quantifying the actual event room demand of a meeting, instead of just the peak rooms picked up in the contracted room block. However, quantifying that number has been difficult for the meetings industry to understand and communicate. And has propelled the action behind a recent study to start a broader conversation in the meetings marketplace.
Released in July 2015, a landmark study, The Event Room Demand Study – How Many Rooms Does Your Convention Really Use?, reveals that on average, one in three group room nights in the United States are booked outside of the event contracted room blocks.
While 34.1% is the average, it does not mean it will apply to every event. Factors such as gross square feet, size, location, and meeting type all play a role in determining the amount of rooms booked outside of the block for a particular event. In fact, according to Tourism Economics Director of Impact Studies Christopher Pike:
- Almost one-third of the events in the study had less than 20 percent of their attendees booking outside the block;
- One-quarter fell into the 20 percent to 40 percent range;
- And one-quarter fell into the 40 percent to 60 percent range;
- An unlucky 16 percent had more than 60 percent booking outside the block.
Recently we sat down with two industry experts, Christine “Shimo” Shimasaki, Managing Director of empowerMINT.com and Event Impact Calculator for Destination Marketing Association International (DMAI) and Rachel Benedick, Vice President of Sales & Services with Visit Denver, who were both heavily involved with the study to hear about how the study came about, how planners armed with this information can work hand in hand with the destination experts at the Convention and Visitors Bureaus in their meeting destinations and what comes next.
Question: Tell us a little bit about the project/study. Why was it done? Why is it important?
SHIMO: Back about 15 years ago, when I was working for the then called SDCVB (San Diego Convention & Visitors Bureau), our customer advisory board members were expressing the frustrations they had with CVBs and hotels who did not give the planners credit for the full value of their business, meaning they arguably had more guest rooms being occupied than what could be tracked or “counted” in the contracted room block pick up reports. I then thought about whether we, the CVB and convention center, were making booking decisions based upon the right metrics…with the advent of the online booking engines at the time, it seemed quite possible attendees would find alternative methods for securing their accommodations.
So we explored conducting an analysis for each event based upon analyzing anonymous attendee and exhibitor zip code data, filtering out for those attendees who were local and did not need a guest room which would result in overnight attendees. We then accounted for the occupancy per room and derived a total peak room demand figure for the event.
It was important then and important now…for CVBs to more accurately understand the total value of an event including the total room demand.
And speaking of value, in order to also accurately report on the economic impact of an event, the number of overnight visitors must be determined and this is one of the most accurate methods to determine this value, since overnight visitors contribute to the highest amount of net new spending.
Question: How has this study differed in its scope than previous studies that have tried to measure rooms booked outside the block?
SHIMO: This study is a similar methodology as the one used by the SDCVB and CIC Research. Other than these efforts, other methods include: room auditing, but only includes the capture of rooms outside the contracted room block, inside the contracted hotels. Additionally, registration desk surveys and other attendee intercept studies have also attempted to capture where attendees are staying but these independent methods can be limiting in scope due to collection inconsistencies, year over year.
Question: Was this study conducted for just citywide events, or were smaller, hotel only events also evaluated?
SHIMO: It was important for the study that both events that used convention centers and hotel only events were analyzed so that we could fully understand the breadth of attendees booking outside the block.
Question: What are some of the results that surprised you the most?
SHIMO: I think what surprised me the most is the volume of rooms booked outside the contracted room block for single hotel events, which was one out of every four rooms.
Question: How do you see this affecting how the meetings/hospitality community value their business?
RACHEL: This analysis allows us to have a much more accurate picture of what a group’s true room demand is, which means we can start having much more strategic conversations with our stakeholders in our communities as well as our clients. Having a fuller picture allows you to book business differently than perhaps you have in the past with only limited data.
Question: Given the study outcome, how can the local CVBs/DMOs help planners?
RACHEL: DMO’s can better guide their clients when booking a program in their city. If we know the true demand of the rooms, we can help the client with a hotel package that meets those needs as well as attendee expectations. Every city has booking guidelines based on a rooms to space ratio and this new study gives us something to consider as we apply those guidelines and could very well result in a new decision making process for cities. The study also helps DMO’s guide clients in how to best contract rooms in their community and gives clients something to add to their toolkit as they look to book other destinations. At the end of the day, we need to work together to bring more attendees inside the contracted room block to better serve the attendee experience and success of the event and I see CVBs instrumental in making this happen.
Question: While 34% is the average that attendees book outside the block, what are some of the factors that might affect individual events? (for example, event size, gross square feet, market segment?)
SHIMO: While we expect intuitively that the larger the event, the less cohesion within the group, and the more rooms get booked outside the contracted room block. It’s interesting to note that certain market segments like multi-level marketing, sports, index higher than the average as opposed to government groups. In addition, the study also reflected the more hotel inventory in a destination, the larger share of rooms booked outside the contracted room block.
Question: Knowing that 34% isn’t across the board, what do you recommend a meeting planner do to understand their own meeting?
SHIMO: Individual event analysis is key. DMAI is in the process of beta testing the Event Room Demand Analyzer (ERDA) for DMOs to use as they work with their planners to help them understand their total room demand. If planners are interested in having an analysis completed on a past event, ask their CVB partners if they will use ERDA to analyze the anonymous zip code and housing data. Planners are also welcome to reach out to myself.
Question: Ideally, what do you hope will come out of this study? What’s next?
RACHEL: Ideally DMO’s begin to have more strategic conversations with their clients and their hospitality community. DMO’s will work more closely with clients and their hotel community to align their goals and provide the appropriate room block to ensure success and exceed attendee expectations. This tool is incredibly efficient, it takes us away from bouncing long registration lists off of hotel guest lists which can be a time consuming, arduous and expensive process. Now we can apply this formula, customize it to our destination and to each group and get a much more accurate picture of the group’s impact on your community.
Question: What was the biggest challenge in conducting this analysis for an event?
SHIMO: DATA!!!! By far the biggest challenge is getting clean registration attendee/exhibitor zip code data, we have to continue to work with our clients and their registration and housing companies to ensure we get accurate data. The toughest can be the occupancy per room, the study gave us what we feel is a very statistically accurate average but its best when we can work directly with each housing company to determine that for each group.
We also need more events. Our first run was great with 174 events and over 880,000 zip codes analyzed, but the more data we get the more we can start to draw conclusions based on size of group, size of hotel package in a city, industry segmentation and hotel versus convention center differences to help guide planners, hotels, and DMOs to ultimately improve the attendee’s experience around the event.
About the Study
The study was a collaborative effort between ASAE Foundation, Center for Exhibition Industry Research CEIR ,Destination & Travel Foundation, Meeting Professionals International (MPI), and Professional Convention Management Association PCMA Education Foundation. Tourism Economics conducted the study.
The study conducted anonymous ZIP code analyses for more than 170 events with over 880,000 attendee origin data provided by registration and housing companies, association management companies, destination marketing organizations, and individual meeting and exhibition organizers. The events studied ranged from 60 to more than 55,000 attendees, across various market segments, event locations, and destinations from 2012 to 2015.