October 2007
Marketwatch: Housing
Room rates expected to keep rising

By Heather Kirkwood

Forty-six percent of show organizers report that attendees are paying more than $175 a night for a hotel room at their events, compared with 33 percent last year, according to an online survey conducted in July 2007 by EXPO Magazine and Exhibit Surveys Inc. Nineteen percent report attendees are paying between $151 and $175 per night.

An overwhelming majority of show organizers — 87 percent — expect hotel room rates to rise in the next year (average increase: 6.5 percent). Ten percent of show organizers expect their hotel rates to remain the same in the next year, and 3 percent expect rates to decrease.

More than three-quarters of respondents report that they’re not having trouble finding enough hotel rooms for their events. Still, the number of organizers who say they are encountering some difficulty increased from 19 percent in 2006 to 24 percent in 2007.

Room block management continues to fester. Organizers reported that 25.8 percent of attendees booked hotel rooms outside the block, up from 20 percent in 2006. Meanwhile, 26 percent of show organizers said that booking outside the block was on the rise at their events, while 64 percent noted the number of attendees booking outside the block has remained unchanged at their events.

The use of third-party housing companies remains the most popular way to manage housing; 53 percent of show organizers use a third-party housing company, while 34 percent manage this function in-house.

More on expoweb.com
Exclusive Web-only content from this month’s Marketwatch survey:

Profile of Survey Respondents

Organization Type:

Trade association/society/not-for-profit	52%
Independent/For-profit convention/trade show/meeting owner/producer/planner	41%
Corporate event management	7%

Total Gross Revenue:

$500,000 or less	28%
$500,001 - $1,000,000	9%
$1,000,001 - $2,000,000	12%
$2,000,001 - $3,000,000	12%
$3,000,001 - $5,000,000	6%
More than $5,000,000	34%

Average Number of Attendees:
22,015

Average Room Nights on a Peak Night:
5,378

Required Exhibit Space (Sq. Ft.):

Less than 25,000	11%
25,001 to 50,000	6%
50,001 to 100,000	9%
100,001 to 250,000	30%
250,001 to 500,000	23%
More than 500,000	21%

Verbatim responses from respondents on their biggest housing frustration:
- Tracking room-nights.
- Holding costs in line.
- Accurate and timely reporting. 
- Having hotels respond to RFPs and include the information requested. 
- Receiving proposals in so many different formats it takes forever to summarize and be able to compare "apples to apples".
- Attendees sometimes sleep 3-4 to a room to save dollars. So getting an accurate count can be challenging. 
- Exhibitors sometimes block more rooms than they need, thus reserving rooms that could be made available to attendees.
- Avoiding attrition.
- Balancing attrition exposure with having enough rooms in the block.
- Non-block hotels undercutting the rates in the block.
- On-line booking is easier than using the housing bureau.
- Communication with hotels.
- Overbooking at headquarter hotel.
- Coming to an agreement on a fair rate.
- Smaller shows competing for lodging with massive shows in same time slot.
- Convincing attendees to book using the official housing agency.
- Getting attendees to book in the block.
- Getting large blocks of rooms
- Difficult to get a range of rates in some cities.
- Hotels are beginning to lower the percentage of rooms that they will provide us in a block.
- Hotel contracts, when initially submitted to us, carry unreasonable demands and need to be negotiated.
- Hotels change contract details even if we are asking for an additional consecutive year...like they started developing the second contract from scratch.
- Hotels do not see the value in citywide business and are taking advantage of the large number of people that our event brings to town.  They think in the "short term.”
- Hotels giving last minute bookings a better rate than the one negotiated for the group.
- Hotels honoring contracts, room rates.
- Hotels overbooking blocks with other business over shoulder nights.
- Increase in costs. Hotels do not have any interest in smaller events.
- Lack of coordination between hotel, CVB and the exhibition hall on procedures, rules etc
- Lack of creativity in providing affordable options.
- Lack of rooms
- Making sure that there are not a lot of cheap rooms that could hurt the block.
- Not getting credit for heads in beds at local, low cost hotels like Red Roof, Quality Inn, etc. The CVBs typically have all the national chains on their boards and seldom give credit to the low cost hotels were the majority of my exhibitors spend 5 to 6 room nights.
- Not having one hotel adjacent to the exhibit hall that can accommodate all of our room nights and meeting requirements.
- Once the contract is signed, hotels not assisting with additional sleeping rooms.
- Predicting exhibitor housing and cancellations.
- Predicting quality of rooms 6-10 yrs after site inspection.
- High price of F&B.
- Providing competitive rates given that we sign contracts so far out. You cannot predict what the market might do over a period of years. Because we are a full house group and our contract states that the hotel cannot offer a lower rate to anyone during our meeting, we are protected at the host hotel but other hotels nearby might be offering vastly different rates.
- Slippage
- Rates. There aren't many bargains out there for a conference that has to go to first tier cities.

Other articles of interest on housing include:
Cheat Sheet: Third-party housing
Hotel Negotiation: What Works Now
Marketwatch: Housing 2006