Will energy costs lead to less negotiating power?
Posted by: JoanEisenstodt in Travel Vendor, Travel costs, Site Selection, Negotiate, Energy costs, Conventions, Convention Center, Conferences, Airlines on Jul 26, 2008
Why do we think that hotels, convention centers, conference centers and other venues are going to be able to negotiate 'deals' as if it were November 2001?
The market was soft then, after the terrorist attacks on the United States. Airlines were back with flights but many companies were still canceling or postponing meetings and business travel. We were all more cautious about what business we booked.
Today, we know the airline situation - and know that after the first of January 2009, it will get worse as the full impact of flight cuts is known. We know too that the US is, like other countries have already done, seeking alternative sources of energy.
In reading the current (August 4 2008) Business Week, I was struck by the numbers. I confess to not always checking the cost per kilowatt hour for our electric bill at home and at my office. You can bet the comptrollers at the venues we use for meetings are not as lax as I in that area.
It surprises me that we've (not yet) seen an energy surcharge again on individual folios and on direct billing accounts for meetings. Is it that venues are still trying to see what will be or are these fees hidden elsewhere?
If it costs us, as individuals, more to run our homes, buy food, get from one place to another, why do we still expect venues and their owners to absorb costs?
Then there are the other vendors ... DMCs, ground transportation providers, entertainers, and on and on ... whose operating costs have also increased.
It's a rock and a hard place, isn't it? We need to negotiate the 'best deals' to satisfy budgets that may already be in place - or to even keep our jobs - and yet .. we do not want all these places and vendors to go out of business from losing money .. and yet still ... the owners may be raking it in as the oil companies are.
Ugh.. it's never been less fun.

written by Horcutt, August 08, 2008
written by Timothy Arnold, July 27, 2008
I see this with hotels as well, but to a lesser extent. Luckily, hotels and convention centers are not over the barrel so much in terms of fuel, but other costs are certainly going higher.
Hard costs are going to be very hard to negotiate, but the soft dollar costs should become easier to talk about and get for your groups.



