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September 2022, Virtual
September 29 2022, Virtual
The meetings industry has been hit as badly as business travel by the recession. Glenn Carroll, senior vp sales and marketing for Corinthia Hotels International, tells ABTN how the chain is coping
It is a small chain of just 12 hotels but in the cities where it has a presence, its properties are among that location's three biggest MICE hotels. In some, like St. Petersburg and Tripoli, it is number one; in others, like Lisbon and Prague, it battles with worldwide chains like Marriott and Hilton.
CHI (Corinthia Hotels International) whose main brand is the five-star Corinthia Hotels, relies on the MICE market. In normal years, 40% of its revenue would come from meetings and incentives. In the recession, this has dropped to 25%.
But Glenn Carroll, CHI's senior vp sales and marketing is neither downhearted nor pessimistic. He insists that it is business as normal, although business is "slightly down." It is also clearly a buyers' market with companies seeking to prise highly favourable last minute deals from the hotels.
The starkest evidence of this is that lead in times - a classic indicator of tough financial times - have become much shorter. "The lead times are now very short," said Mr Carroll. "We had an inquiry in the last week from Pfizer for a conference for 190 delegates for three days in November. Normally that inquiry would have been months in advance.
"But they knew it would be through a quiet time in Lisbon where all the major hotels are MICE heavy and they knew they could get a good deal."
But this is just part of how the industry is changing under the recession.
"The large pharma market on which we depend heavily is having shorter lead in times. We also have to hope that the confirmation will come through. They keep you waiting confirmation or they will not confirm because they have a lot of shopping time.
"We have had to become quite flexible over the deposit payment which was usually paid some time out from the event. We are also allowing bookers to move their dates without penalty. We are flexible over cancellation fees as long as they keep the conference at the hotel or at another in the group. We will waive the fees then.
"If they cancel completely, we will charge them but if they say they want to move the event form April to July, there is no cancellation fee."
CHI now pays Helms Briscoe, a major event organiser, 5% commission for business it brings to the hotel chain. "That is quite an incentive. We have various degrees of rewards if they produce a certain type of quantifiable business," he said.
Along with a shorter lead in times, Mr Carroll said the other major change caused by the current climate is that the pure incentive trip seems to have been cut down and meetings are now solely business with less entertainment.
"They will have the meetings now but not the add on extras. The entertainment side is less than it was. The pure incentive trip is certainly down and the pre-dinner and post-dinner activities seem to have disappeared.
"Some companies are not even trying to bring in any element of relaxation. They just do the meeting and that is the end of the conference."
But it is not all bad news as while business from staples like the retail and automotive industries are down, the pharmas are still strong. Nor has CHI, unlike so many in the industry, made any staff redundant or reduced its attendance at the various trade shows.
"We still attend the trade shows, like EIBTM and IMEX. I have a meeting tonight where I am seeing 82 conference organisers. Next week there is an event in Brighton. We have workshops coming up in France, Budapest and Prague and we are going to the States in October.
"There are still people come to these events. The buyers till want to know what you have. There is no problem getting sales inquiries. We are still as busy as ever on that front. People are not coming up with specific inquiries but they are still shopping around."
As an example, he cited his French sales office as being only €500,000 short of its half year target of €3.5m as a sign that the MICE industry is still alive. But, more ominously, he said he expected 2010 to be "just as much a struggle as 2009."
"It is very difficult to give an answer as to when things will get better. The French office does not think 2010 will be particularly gloomy but if I look business for 2010 there is hardly anything. In 2008 there was a pattern of bookings but if you look at Lisbon for October, there is hardly anything," he said.
An important factor that is keeping the show going is that CHI is still opening new hotels. "Development-wise, nothing has stopped for us," said Mr Carroll. CHI opened its new hotel in St. Petersburg - the biggest MICE property in the city - in May. A new hotel, the four-star Tiran has just opened in Sharm El Sheikh on Egypt's Red Sea coast. There are well advanced plans to open a five-star Corinthia Beach Resort in the same complex next year as well as doubling the size of the Tiran.
Finally its first London property is due to open possibly next year. This £235m development is located in a former UK Ministry of Defence building near the River Thames. It will be a luxury 296-room property and is due to open in late 2010 or early 2011.
But business has so far not dropped enough for Mr Carroll to be confronted with what he sees unanswerable dilemma. If there is no MICE business, should they accept business from tour groups? Perhaps the guarantee of 4,000 room nights. It seems a no brainer but Mr Carroll points out that tour groups use a hotel much as a bed and breakfast with little extra spend. Their rates are usually lower and they also stay for fewer nights which increases the housekeeping turnover. Delegates, on the other hand, stay longer, tend to have all their meals in the hotel and spend time and money in the bars. The accommodation of successive tour groups would also, he said, change the personality of a hotel.
"It is a gamble in making decisions like this but it has not happened yet. It is a dilemma without a scientific answer," he said.