Coronavirus Hotel Contracts
On Friday, March 27th, HPN Global CEO Bill Kilburg sat down with Regional VP Mark Dallman on Facebook LIVE to talk about the current state of the industry and have a conversation about Coronavirus and how it’s impacting hotel contracts.
For the hospitality industry, last week was one for the history books. Although not one we care to revisit again soon. We saw so many of our colleagues and close friends on the receiving end of furloughs, unemployment, financial uncertainty and hotels closing their doors.
We all need to be two things during this time: Be Strong and Be Kind.
During times of uncertainty we need to embrace the shift, letting go of what we have known and how we have always done things. Uncertainty + Fear = Anxiety. We must learn to uncouple fear from uncertainty to evolve – to embrace the shift.
What we have done up until now is not what we will do in the future. We will evolve by finding new ways to partner and together we will thrive. If we accept the challenge of today and come together to find new ways of working, on the other side we will be stronger than ever before.
Our wish for you this week is that you focus on taking care of yourself and your family. Focus on your strength (you are stronger than you realize) and move through the week with kindness. On the road ahead, we will be refining our plans to support you and our HPN family along with strategies for our collective future success.
“With a warrior heart, square up your shoulders, keep your chin up and keep swinging.”
Be strong and be kind,
2019 was certainly interesting for sure but again it was the best year ever for the company!!!! The most bookings for a year by far and again currently the largest backlog ever!
Seattle was a kick (and the weather cooperated LOL)! Back to Cabo this year !!!!! You all should be proud of yourselves and leadership here in Scottsdale and across the country are proud to be associated with each and every one of you. This is absolutely the best team in the business.
It was truly another great year! Awesome new associates and friends and we are more like a family than ever and too much fun …….. Thanks to everybody!!
So here again are those basic founding ideas of the company, and our culture to set out a basis for our combined success in the new year.
Love you all and let’s go have an absolutely awesome 2020 and a new decade!!!!
Family First – for most of us our family and loved ones are why we do this, they are why we get up in the morning and go do what we do, time with them is the most precious thing we have. Hug them every day.
Have FUN – Have fun every day doing what you do. If you enjoy what you are doing, it pretty rapidly ceases to be work, it’s pretty cool to do something every day that you are having fun at! A lot of people go through life without ever having that opportunity. We are in the best business in the world! I’ve never met a happier, more fun and successful group of people in my life !!
Be Nice to People – It’s a basic fact, People are nice to people who are nice to them, we are in the service business, people buy from people they like! My mother’s favorite saying was that “you catch more flies with honey than you do vinegar”
Be Passionate and Enthusiastic– Both are absolutely infectious, I put on a positive attitude every day first thing in the morning like clothes, Every day is the best day of my life because I choose for it to be that! Be passionate and enthusiastic about what you do and success will certainly follow.
Life is all about Relationships – Relationships, Relationships, Relationships! At the end of the day, nothing else matters but the connections we make with other people, people we work with, people we love, people we do business with.
Change is our Friend – It’s another fact, everything changes, We are going to continue to see a ton of that in 2020 for sure. Given what I hear from the ground most should start to benefit us No matter what you think is the status quo, it is in fact, going to change and increasingly rapidly. The people that can assimilate and appreciate, and perhaps even lead change, are the ones who are successful, the ones who hate change are rarely successful.
Do what you say you are going to do –Business (and our competitors) are full of people that say “yea, I can handle that” and then drop the ball or don’t follow through. Nothing is worse in business than relying on somebody to get something done and then having it not happen, most especially in the service environment. Do what you say you are going to do every time !! Success will follow!
Let go of Negativity – Stuff is going to go wrong, somebody is going to make you mad, deal with it and then let go of it and move on. Harboring ongoing negativity hurts you, not them. I’m by no means saying to put up with bad behavior from toxic people, but get over it and realize life is too short. The past is the past, the only things we can affect are in the future. Just get rid of the toxic people in your life, trust me its liberating.
Take care of your friends – All our leadership has your back every minute of every day and we all know who our friends are….. in life and in business, take care of them and be a good “friend” and they will step up and take care of you when it matters. Let’s make sure we take care of our business partners who have our backs
Be a “Kid” as much as possible – laugh easily and often, run around and play with your kids, set off fireworks, travel, and marvel at the wonder of the world, do silly things with your family and loved ones, learn something new every day, cook something you have never cooked before, just have fun…….. life is short
Thanks again to everybody and here’s to a new decade, new business, new fun !!!!! Let’s go do some epic shit again! (COPYRIGHT #jildasher LOL)
Adventure awaits !!!!
I absolutely love you all!
William J. Kilburg
Chairman and CEO
13825 N. North Sight
Scottsdale AZ, 85260
According to our partner Shannon Gardner, President and Owner of Accent Indy and CTC Destination Management, there are a few common misconceptions about working with a DMC that we would like to clear up.
DMC MISCONCEPTION NO. 1: DMCS CHARGE CRAZY FEES
Just like the majority of our clients and the businesses they represent, we need to make money to keep our doors open. I’m not afraid to say it: we are a for-profit company. You’re not just paying us for the food and beverage; you’re paying for the “higher than the law requires me to carry insurance, so in the event something awful happens, I’ve got great coverage.” You’re not just paying me to sign off on all the vendor contracts. You’re paying me to attend seminars and network with industry colleagues to learn about contract language, so I won’t sign off on something that gets us both into trouble. You are not just paying me to figure out where the bar goes. You’re paying me for working with the best technical platforms, so I can put our vision on paper for you to present to your stakeholders.
DMC MISCONCEPTION NO. 2: WE’LL USE YOUR BUDGET TO OUR ADVANTAGE
Some clients are reluctant to share their true budgets, for fear we will just use that number as an end price. In reality, we will fight to use every dollar of that budget to help make the event the best that it can be — oftentimes, providing a little more on our dime –. just so we can complete the vision. We want the event to be just as successful and impactful as the client. If nothing else, we want a picture-perfect photo for our Instagram page.
DMC MISCONCEPTION NO. 3: IT WILL BE EASIER TO GO DIRECT
“I can always go search the internet on my own”, has been known to be uttered from time to time. Well, if I relied on WebMD to make all my diagnoses, I’d have died from a terminal illness about five times already! We search the web to get general info. We go see a doctor to get professional help. Why not do the same for your most important events?
DMC MISCONCEPTION NO. 4: WHAT EVEN IS A DMC’S PRODUCT?
Our product is our knowledge. We know the best vendors with which to hire and we know the ones to avoid. Our product is our experience. I love to tell clients, I’ve been working for you, long before you even knew who I was. The events and programs we’ve been producing and managing for the last 25 years have allowed us to repeat things when they go well, and learn from mistakes to avoid future pitfalls. Our product is a peace of mind. Clients need to focus on so many other aspects of their job and not worry about Plan B. We plan for things to go wrong and we have solutions if things don’t go as planned.
DMC MISCONCEPTION NO. 5: DMCS ARE NOT FOR EVERYONE
Well actually, this one is true. You need to trust your DMC or the relationship will be doomed from the beginning. Some clients prefer to do things on their own. Sometimes it’s genuinely a budget thing. My response to that is, too often, you’re not saving money, you’re buying regret. But I do understand that every company operates differently — a DMC may simply not be for you. Maybe you’re just not that into me! But if the idea of saving time and hassle intrigues you, why not give us a go? We’re there for you when you are ready.
For questions, please email Diva Tolosa, Manger of DMC and Preferred Partners at firstname.lastname@example.org
John Whitney IV is the CEO of Emergency Concierge International, a company focused on emergency preparedness. We are living in a brave new world, and when you are in the business of bringing people together for meetings, conferences, and events, it is critical that we are always thinking about safety and security.
“Far too often those in the meetings and events industry take emergency planning for granted,” says John Whitney, Emergency Preparedness Expert. “They assume that the hotel, venue or DMC has it covered. That is not the case. Ensuring the safety of your attendees and the reputation of your organization should be a responsibility that you take wholeheartedly.”
Here are a few tips John offers to keep top of mind when attending your next meeting or event. If you need help creating customized emergency operations plans or need on-site emergency management, contact us for more information.
Maintain Situational Awareness
- Be aware of your surroundings.
- Keep an eye out for items or people that look out of place.
- If you see something, say something.
- Locate the nearest Exits everywhere you go (at least two, primary and secondary).
Use the Buddy System
- Travel in pairs.
- If not in pairs;
- Let each other know where you are going and when you get there (especially at night).
Confirm your rideshare driver’s accuracy
- License Plate
- Vehicle make & model
- Watch for signs of dehydration
- Excessive sweating (or not sweating at all in extreme cases)
- Rapid, weak pulse
Commit to a “Warrior Mindset” – People laugh about this but it makes a huge difference!
- In an emergency, don’t wait for someone to instruct you.
- Be prepared to react immediately.
- Commit to survive!
If you’re at #CONNECTMP and need Medical Assistance, please access our Medical Plan for the event, which provides the nearest hospital, urgent care, pharmacy, etc.
Text “SAFE” to 345345 to receive “5 Life Saving Tips You Must Use In An Emergency“
Google “hotel trends 2019” or something similar and what will come up is pages and pages of information on event experience, engaging an audience, marketing to millennials, or driving attendance. What does NOT come up is all the ways hotels are looking to maximize their profitability through contract negotiations and how that impacts the meeting host or end user.
Supply of rooms is increasing in sync with room demand; leaving occupancy flat in 2019 and average rates are up just below expectations at 1%. Hotels are looking for other opportunities to grow revenue and maximize profits.
Driving F&B Spend: If you have sent out an RFP to multiple destinations or even several hotels in one destination, you have seen how widely the F&B minimum can vary. That is because some hotels calculate F&B spend as a per-person, per-day spend. Other hotels will have an F&B minimum assigned to specific meeting rooms, based on how many people that room can accommodate. Many times, the salesperson is just entering a number they were given by a revenue manager or supervisor.
AV Spend: Audiovisual costs are skyrocketing. Partially due to individual users having multiple devices, requiring more bandwidth. But AV companies are also bundling services into packages to upsell and create more revenue. My recommendation is to always get a detailed AV quote on the front end, once you have narrowed down a short list of venues. I have seen the same in-house AV provider at different hotels be $10K apart on pricing. In other words, company ABC that is in-house both at Chicago Hotel A and Chicago Hotel B, delivered two different quotes that are $10,000 apart. When possible, you can also save some money with a few pieces of your own equipment, and writing in a clause that AV discount will still be applied if you bring in certain pieces of equipment.
Resort Fees: Marriott is taking advantage of its position in the market by standing firm on resort fees. I attended a Marriott luncheon recently and asked about this topic. The response I got is that there is a strong push from leadership to not waive the resort fee. Not only are they enforcing that added cost, but they are also writing that into the contract as part of the total revenue commitment. Marriott and other hotel companies are trying to sell the value of the resort fee by having it include WiFi and sometimes parking. Although city center hotels will still charge a steep price for overnight parking. City hotels are making their attempt by instituting a daily amenity fee which may include WiFi, a welcome drink, and all the typical inclusions such as a fitness center or daily newspaper. Although we may not be able to waive these added fees, the best strategy is to negotiate what is and is not included, to make sure there is true value being delivered.
Lead Time / Booking Further Out: Hotels are at once preaching to clients to book further out, while often turning away business of a certain size if it’s “too far” out. If a hotel has 500 rooms and your 200 room group comes along looking 2+ years out, a hotel may decide they do not want to commit almost half their inventory to your group. They are hoping a larger group comes along with a higher total revenue contribution, and then they can layer in a smaller group over the large one. It’s all ways to make the puzzle fit perfectly. Maximizing day of week pattern, meeting space allocation, sleeping room inventory, and incremental revenue. While your contract only holds you to sleeping room and food & beverage revenue, the hotel is anticipating that your attendees will also spend money in other outlets.
To learn more about how I can help you with any of the above and more, please contact me at JShkolnik@HPNGlobal.com
Vice President, Global Accounts at HPN Global
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Almost everyone in the industry has a varying amount of frequent flier miles because of the traveling that we typically do in the course of our jobs. Some people stockpile them to use for a future trip, some spend them on non-travel related things like magazines, and some people use them sporadically for domestic travel.
I have wanted to visit Cuba for as long as I can remember. Unfortunately, as an American, this was not really possible for much of my life. Sure, I could have snuck in from Mexico or one of the other Caribbean islands, but the risk/reward factor was very lopsided. Thanks to the US embargo put in place in 1960 after many US interests there were nationalized, the embargo was expanded in 1962, and expanded further by the Clinton Administration in 1999, Americans have been pretty much forbidden from spending any money in Cuba. The US still holds about 6.5 billion dollars’ worth of claims due to this nationalism. It is still officially a socialist country, but is changing to be more accommodating to entrepreneurs and businesses.
But in the last few years, the relations between the US and Cuba has eased significantly, to the point that Americans are now free to go to Cuba, spend money, and bring back cigars and rum. You still have to clear a few hurdles but it is now incredibly easy to get down there. I will talk a little about the hotels, but a lot about the process needed to get down there and enjoy this amazing destination. Pure tourism is still not allowed, but there are 12 permitted reasons to travel, and a lot of latitude with these reasons. Educational Exchange and People to People exchange is probably the easiest one to fulfill, as you will be very educated about Cuba by visiting there, and encounter a lot of lovely citizens of their country.
There are now multiple US airlines that fly to Havana. Many come from Miami, but Alaska Airlines does one from LA, American has one from Charlotte and four from Miami. Delta has Miami, New York, and Atlanta. Jet Blue flies to Havana from Fort Lauderdale, New York, and Orlando, while Southwest has Fort Lauderdale and Tampa flights to Havana. Spirit, United, and Frontier also have flights to Havana. When booking your flights, you will apply for your Cuban Visa with the airline. The cost is 50 dollars, and the airlines must add another 25 dollars to your ticket to cover your health insurance while you are in Cuba. You must keep your boarding card with you at all times, as this serves as your proof of insurance.
Almost no US credit or debit cards will work in Cuba, and even if they did, almost no establishments will ever take cards for anything. Bring plenty of cash, and convert it at the airport, bank, or hotel. There is a 10% penalty for exchanging US dollars into Cuban Pesos, but the exchange rate is close to one to one after that. Getting Euros from your bank might be cheaper, depending on how much you are charged for foreign currency there. Just be aware that it is almost completely a cash economy for everything, and bring more cash than you think you need. Not kidding about this at all.
The Havana airport is fairly small, but very functional. It is about 20-25 minutes to downtown. As you might guess, there are few western hotel brands there. There are many Melia hotels, a really nice Iberostar one right on the main square of Havana, and a new Kempinski that is opening soon across from the Iberostar. All are five star hotels, but that is probably the equivalent of our two and a half to three star properties. There are also many smaller boutique hotels, as well as hundreds of houses and rooms on Airbnb. If you use these smaller hotels or private rooms, be sure to get the address information in advance in English and Spanish, print it out, and keep it with you at all times. Like most countries, the odds of getting a taxi driver who speaks no English is fairly high. I did find that they did not know the brand names of the hotels, but when I would say Central Parque Hotel (Iberostar), they knew instantly what I was talking about.
Telecommunications is a challenge, but I did not visit Havana in order to stream movies on Netflix. Some hotels include access to internet in the room rate. Others will charge for access. In either case, they will give you a card with 12 numbers as the user name and 12 numbers as the password. When you connect, you will be able to stay online for an average of five to ten minutes at a time. Connection speed is about what you had with AOL or Prodigy in the late 1990s. It worked for what I needed, which was to check emails, upload pictures to make my friends insanely jealous, and text with my wife. Your cell phone will cost you an absolute fortune if you try and use it, average is about three dollars a minute to use it and data is also terribly pricey. Best to keep it on airplane mode and use it as a camera if you do not have a real one. It actually was pretty nice to be able to unplug and disconnect from the world for a while, and really have some great conversations with undistracted people.
This was the 60th country I have visited, and I would say with zero hesitation that it is the safest one to which I have been. At one point, I walked by myself, 13 blocks back to my hotel, well after midnight and felt safe and secure the entire time. There is no US or international city where I would do that. There has never been a time that I have felt more safe walking around a city than I did in Havana last week.
The people of Cuba are amazing, friendly, and enthusiastically enjoy life. Everywhere I turned, there was amazing music being played, people laughing and dancing, and they all helpfully answered all of my questions. Interacting with the Cuban people was one of the highlights of the trip. You will miss so much if you just visit a city without getting to know the people. The food was unbelievably good, from fresh caught fish, to fried pork, and everything in between. This is certainly a place that you can eat well, and most places it was very inexpensive. I found a new favorite drink while there, the Rum Collins.
There is no place I have visited that has such amazing and beautiful architecture as Havana. Everywhere you turn, there are stunning buildings from the first half of the 20th century. As a huge architecture nerd, it was one of my favorite places. Many buildings are in a state of disrepair, but the whole canvas is just fascinating. I loved taking pictures of the classic cars in front of exceptional architecture. It just felt like real and authentic Cuba, from a bygone era. The colors and designs of the buildings, and the allure of the old cars made everything a feast for the eyes, everywhere you turned.
Because of the embargo, it was impossible to import any US cars for the last 50 years. So there are thousands of simply gorgeous classic American cars from the late 50’s and early 60s on the island. It is easy to rent one for the day, and have your driver take you on a true and authentic Cuban day.
We went out to Ernest Hemingway’s house, about 30-45 minutes outside of Havana. This was where the legendary author lived off and on for many years beginning in 1939. Highly recommend visiting here when you come to Havana. On the way to his house, driving a 1960 Buick, we stopped and played baseball with some kids near there. Having drinks at the outdoor bar while listening to a Cuban band, was a most pleasant way to while away the day. On the way back, after a three hour lunch that was beyond fantastic, we stopped and bought some cigars and rum. Not sure it is possible to have a more enjoyable day than what we had on Saturday.
In downtown Havana, there are two iconic bars you must visit, Sloppy Joes and Floridita, the home of the Daiquiri. They are within easy walking distance to the Museum of the Revolution, another must visit.
In closing, Havana is a must visit place. It was not just like visiting another country, it was like visiting another time. It truly had everything you want in a destination. Art, architecture, music, great food, amazing people, rich culture, safety, authenticity, and an overall sense of true wonder while exploring. You can sense that it is on the cusp of change, perhaps very rapidly over the next few years. So go now, before the changes, and experience one of my now favorite places I have visited.
All photos taken by Timothy Arnold in May 2017.
Timothy Arnold, CMP, CMM
Regional Vice President
Hospitality Performance Network – HPN Global
HPN conducted a quick survey on hotel contracts and hotel trends. The goal was to identify any emerging trends in the way hotels do business. Don’t get caught off guard by a new charge or higher rate. Take a look at what a few of our associates are seeing in the industry.
Hotels seem to be trying to get meeting room rental for everything now. It used to be only international hotels, but now it is everywhere. When I get the rental removed, the hotel is often less likely to negotiate on other things, as they feel that they have already given a lot of ground.
Parking charged in Vegas, meeting room rentals increasing everywhere, resort fees increasing or being added to non-resort properties, service charges increasing. All ways for hotels to find additional revenue sources.
Lynn Ann Perretta Wagner
Furniture Removal Fees for outdoor events. Additional Lighting necessary in many cases which in turn ups your AV or Decorator budget. In addition to hefty min. service charge of 26% in some areas of the county.
Daily attrition vs cumulative.
Transient rates are up over $30.00 higher than group last reported hotels are not allowing groups to increase their blocks over the contracted numbers without paying hefty increases
Properties’ Service Charge Increase. Was told by one branded hotel company that they are increasing service charge amount to 25% at all properties – as of 6/1.
Long article on a Las Vegas hotel company bankruptcy in today’s WSJ but buried in the middle is the fact that they have raised hotel room rates at 3 times the national average. 16% increase in realized rate in the last year!
Hospitality Performance Network Global
Tap into HPN Global’s vast network of corporate conference venues and services — with a personal touch. Let HPN plan your event, and you’ll experience concierge service from start to finish. Get started now
Hospitality Performance Network GlobalTap into HPN Global’s vast network of corporate conference venues and services — with a personal touch. Let HPN plan your event, and you’ll experience concierge service from start to finish. Get started now
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