January 10, 2018

The results are in: The hotel industry is starting 2018 off with a bang. Forecasts from hospitality consultancies STR, PwC and CBRE all predict increases in both average daily room rates, or ADRs, as well as revenue per available room, or RevPAR, as demand outstrips the new supply growth coming online throughout the United States. CBRE, the most bullish of the three, predicts that the first quarter of 2018 will see an increase of 3.7% in RevPAR, coupled with a 3.2% increase in ADR over that same time period.
For planners of pharmaceutical meetings and HCP education programs, this is an escalation of the perennial challenge posed by room and meal rate caps. While rising rates make it more difficult to stay within compliance parameters, it is by no means impossible, provided that the planner make use of all their resources.

  • Relationships: In this industry, much is made of the need to forge mutually beneficial relationships with hotel directors of sales and group sales managers. These vendor relationships can go a long way towards success in negotiating for compliance-centric rates. With PwC and CBRE both predicting increases in occupancy, you will need partners willing to work with you.
  • Flexibility: A good Director of Sales will help a planner take advantage of small windows of opportunity, which can offset the rate constraints you bring them. In fact, one bright spot in recent consultancy predictions comes from STR, which projects slightly lower occupancy for the first quarter. If there are gaps in a hotel’s booking calendar, it is likely that they will be amenable to lower rates just to get “heads in beds.” The nature of HCP educational programming is such that shoulder or off-season bookings and shorter lead times give you the flexibility to take advantage of compliance-centric rates.
  • Data analytics: One of the most valuable assets planners of HCP programming have — or should have — at their disposal is a comprehensive view of spend with a particular hotel brand. This data has two uses: It can come in handy if negotiations hit a sticking point by helping the hotel to see a fuller picture of the value your groups bring to them. A big-picture look at spending patterns will also help you identify where your spend is concentrated and if there are opportunities for consolidating spending further in order to enhance the value of your business. Hotel stays are a perishable commodity; an unsold room is lost revenue. If your programs have enough volume, you are likely to find hotels willing to be more flexible in exchange for a guaranteed stream of business.

Trying to meet the needs of both marketing and compliance leadership is undoubtedly a balancing act, but an ambitious program manager armed with robust analytics can find ways to make the numbers work to everyone’s benefit.

Contributed by:

Matthew Derner, Director, Strategic Meetings Management, AHM

Matthew joined AHM in 2016 and has 18 years of Life Sciences experience. He leads AHM’s Stragetic Meetings Management (SMM) Department and is responsible for engaging current and prospective clients about our SMM compliant meeting solutions across their organizations. Matthew also leads a team of Event Managers & Coordinators that are responsible for the planning and execution of any meeting type outside of Speaker Bureau. Prior to joining AHM, Matthew has worked for Pharmaceutical Companies as well meeting planning agencies in various roles.