Low hotel rates are bringing negotiating opportunities to meeting buyers looking to secure events for 2011 and beyond, but some are reporting resistance from hotels in locking in rates and terms too far down the line. Consultants, meanwhile, are recommending a few extra levels of protection with advance bookings, such as reciprocal cancellation clauses and deposits.

U.S. hotel rates last year were 8.7 percent lower than 2008 levels, Smith Travel Research said, and some meeting buyers are seizing the opportunity. Kirsten Olean, director of meetings for the Association of American Medical Colleges, told MeetingNews in December that although she typically books 18 months in advance, she has been trying to book as far ahead as 2012 to take advantage of current deals. However, some cities' hotels, such as Chicago, are not showing a willingness to bid on small pieces of business that far in advance, she said.

Large group business, however, is having some success with advanced booking, said Steve O'Malley, vice president of Maxvantage, the strategic meetings assessment program born of the alliance between American Express Business Travel and Maritz Travel. O'Malley said he's seeing hotels respond to advance requests for proposals without reticence. Corporate meeting buyers, however, often are not able to book as far in advance as usual because of their own policies, he said.

"In many cases, we were working with customers to book four years in advance for automobile shows, product launches and corporate meetings, but a new normal has been set," O'Malley said. "Still, we do have many customers we're working with looking at two- and three-year plans, and hotels are very desirous for that business."

George Odom, senior consultant for BCD Travel consulting arm Advito, said he sees few on the corporate meeting side booking more than 18 months or two years out. Like O'Malley, however, he said there are savings opportunities for those who are doing so.

"Hotels are offering good rates and are glad to have the business," Odom said. "A number of hotels are actually guaranteeing rates years from now. Even if you look at transient rates, a lot of them are doing them for two years flat."

Omni Hotels vice president of sales and distribution Tom Faust said he's seeing an increase in advance group bookings. "The savvy meeting planners are recognizing that there are a lot of deals to be had," he said. "2011 is not that far away, and as demand increases, those prime available dates are going to go away."

Cities like New York that are gaining pricing power make advance bookings more difficult, but there are opportunities in secondary cities and major meeting venues, such as Las Vegas, O'Malley said.

Advance bookings are not without risk. Olean said she's seeing hotels show more resistance to signing reciprocal cancellation clauses, which specify compensation from hotels to meeting planners for costs related to a cancellation of the event by the hotel, such as finding another venue. The concern for meeting planners would be that if rates rise significantly in the next few years, hotels might find it advantageous to cancel a planned event to bring in business at higher prices.

Reciprocal cancellation clauses in the past were not standard, but Odom said they are becoming more prevalent, particularly as legal and procurement departments become more involved in meeting planning.

Odom said a hotel canceling a meeting for financial advantage is not out of the question but that "it probably wouldn't happen in 90 percent of the cases. In the 10 percent that it would, it's really a shortsighted whim."

Omni's Faust concurred, saying it's the hotel's responsibility to evaluate data so that it does not lock in deals that put it at a disadvantage in the future. "Not to suggest that it would never happen, but if you've committed to an event and signed a contract with the client, it's your obligation to fulfill it."

Planners also should be diligent in analyzing and benchmarking bids for advance bookings, O'Malley said. "There's a number of hotels that are probably going on a fishing expedition, just throwing out a price and seeing if they'll bite," he said.

Hotels also could try to allow rates for advance bookings to adjust with market conditions, but O'Malley advised against such a policy.

Advito's Odom said many planners try to eschew deposits, but they can provide an extra level of security for advance bookings. "They can protect your interest in the future and make it less likely that hotels will change your rates," he said.

Should there be a significant recovery in 2011 or 2012, O'Malley said meeting planners with secured bookings might find some new opportunities for savings. Rather than canceling , hotels looking to maximize revenues sometimes offer sweeteners to planners to move an event's location or time.

"If hotels are willing to be gracious enough to offer alternate space, we can find ways to make that work," he said. "They might move to a sister property and offer discounted food and beverage or audiovisual services.

Originally published Feb. 15, 2010 by Michael B. Baker via MeetingNews.com