Ask the Expert – Knowing the Value of Your Business

Question: How do we determine which cities can be the most affordable?

Answer: The first thing you need to understand is the value of the business you are presenting to the venue and understand the seasonality of the destination. Every destination has varying demand by month so you should know if you are booking in peak or off-peak periods. If you are unsure let me suggest you use the U.S. General Services Administration’s website to help guide you. It can be accessed at www.gsa.gov and on the top left corner is the section on Government Travel Per Diem rates. In this area you will be able to determine what are the peak times for each city. The best example I always use is Phoenix as you will see drastically higher rates in the winter when their weather is great and Chicago is very cold. When you look at the summer you will see the pricing is far lower. One thing to remember when booking a summer program for Phoenix or a similar city, it is 70 degrees inside all day. You only need to contend with the weather at the end of the day when your conference is finished for the day.

Question: We are getting ready to book our conference for next year and need to understand better what is negotiable and what is really not - can you help us?

Answer: You need to understand that a hotel or convention center is in business to produce revenue and generate a fair return for the ownership. There are many hard cost items – such as internet, audio visual, food and beverage plus labor – which have a limited amount of discounting available. Items such as suites and upgrades do not have the same costs and can be more easily obtained. You need to determine what is important to you and you must also be reasonable in your approach. One of the most misunderstood items are conference meals. While many times the costs may appear to be high, but there are a lot of costs associated with a meal that are fixed. My best suggestion is to explain what you have in your budget and let the venue make an offer to you. Understand that there is a limit on how far a venue can reduce costs and if you find they are beyond your means then you have two alternatives. One is to look at another venue or many times the best solution is revise your budget on meal costs as an example and see where else the venue can help.

Question: Our membership keeps pushing us to keep the same cost for the conference every year which we are finding is very difficult. How do you explain why the cost of the conference will continue to rise each year?

Answer: To the average member they are not aware of the total costs to produce a conference. If you look at just the cost of food in the grocery store you will see that some items seem to be flat in costs while quite a few others have either increased or the size of the food package has shrunk to maintain the same costs. Realistically you should see costs increase 5% to 10% annually, depending on the location you select. You may want to suggest using lower cost cities, but be advised that while some cities may have lower venue costs the transportation expense can more than offset those savings.