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New hotel rooms to increase the appeal of convention market

The Coast meeting and convention market improved some this year and Donna Tarasavage, director of sales for the Mississippi Gulf Coast Convention and Visitors Bureau, believes the outlook for 2005 is for activity to remain constant.

“We have a full calendar ahead,” she said.

The Coast will again be hosting Bank Travel, which held a convention here in 2002 and liked the destination so much they decided to come back. Bank Travel groups are one of the more affluent segments in the group travel market, Tarasavage said. The convention of tour planners will come to the Coast in February of 2005.

“We have a lot of new products under development since they were here,” she said. “That is part of their decision to return. The Southeast Tourism Society is also returning next year. It is a small group, but a very prestigious, influential-type organization. The whole reason behind inviting them to the area is to expose them to the market. They looked at Hancock County, but Harrison County won out on the bid.”

There is a continuing trend in Mississippi and across the country for more conventions to be booked at hotels.

“The conventions are predominantly booking at hotels which can book their entire convention,” said Linda Hornsby, executive director of the Mississippi Hotel and Lodging Association. “That is for the convenience of people attending the conventions. Those properties on the Coast that have increased their numbers of hotel rooms certainly will be able to fit more conventions in, if that is what they want to do with those rooms. The Isle of Capri is adding 400 rooms and Hard Rock will have between 300 to 400 rooms.”

While the new rooms are welcome, Hornsby said a lack of hotel rooms hasn’t been a negative factor in the Coast convention market.

Rich Westfall, senior director of marketing at the Isle of Capri, Biloxi, said the Isle expects a very busy convention season in 2005.

“In May of 2005, we are scheduled to open 400 new hotel rooms and a 12,000- square-foot multi-purpose room, which will raise our convention space to about 30,000 square feet, almost doubling our existing convention square footage. That will give us opportunities to host larger conventions. The new rooms and convention space will really help us compete on a different level in the convention market.”

Westfall said conventions are a big portion of their business. The Isle particularly goes after state association and regional association meetings and conventions.

“Conventions are a very significant segment of business because they bring in so many visitors during the week and provide banquet opportunities,” he said. “We’re in a resort environment that features gaming. So, I think we really present a terrific value.”

The Isle’s hotel expansion was spurred by occupancy rates of 96% to 97% occupancy year round. The new addition will include a spa, 200 junior suite rooms and a new pool that will cascade water down into an existing swimming pool.

Convention bookings at the Coast’s largest hotel, Beau Rivage, are looking good for 2005, according to Beau Rivage director of hotel sales and marketing Maureen Wooten.

“One of the things we are finding is that booking windows for corporate groups has increased a bit,” Wooten said. “Clients can no longer find availability at their preferred properties unless they book further out. We are also finding the budgets have increased for special events, as well as team-building activities for their employees. We attribute these trends to a healthy meeting economy.”

Grand Casino, Biloxi, projects convention room nights in general will grow at a modest rate in 2005.

“If I had to put a number to it, I would say we will see about 5% over 2004,” said Genelle Perrin, director of meeting and convention sales. “This year was essentially flat over 2003 because of the economic climate and the election. At the end of ‘04, we saw a huge increase particularly in short-term meetings. A lot of meetings are booking within 60 to 90 days.

“Meeting planners are shopping for the best deal. They are going online to assist in their searches. They are also using third parties like brokers who can check more than one hotel at a time for them. I think the biggest thing influencing the industry is the upswing projected in the economy. Travel is definitely on the rise.”

Attrition a bigger issue

Currently, one of the biggest issues in the meeting planning industry regards what is known as “attrition.” A block of hotel rooms can be set aside years in advance for a convention. Then, if not as many rooms are used as expected, some hotels will require the organization hosting the convention to pay what is known as liquidated damages.

“The meeting planner has to pay the hotel if they perform under the requirements of the contract, don’t pick up all of their rooms or fulfill financial obligations per the contract,” Perrin said. “If the client doesn’t perform under the rules of the contract and that has a negative impact on us, attrition allows us to recover that money. More hotels are going after that.”

One reason attrition has become a bigger issue in recent years is the popularity of discount, online hotel booking services that might give a lower price than the block rate for the conventions.

“As long as sales departments are offering a best rate guarantee to people attending conventions, that shouldn’t be a problem,” Perrin said. “The trick is we want to give the group a better rate going through the sales office than they can get online. We want them to be forced to book under the group block. The meeting planner wins, and the company holding the convention wins. It really is a matter practicing yield management and closing out discounted rooms to the public during a large convention.”

Tarasavage said the attrition issue caused by online bookings is a huge topic at every conference of meeting planners.

“When people book online instead of going through the organization, the room is not credited to the organization hosting the meeting,” Tarasavage said. “It is not coming out of the allocated block, so it is really hard to track. It has been quite an obstacle for planners. You see a lot of people dramatically reducing the number of rooms they anticipate needing in order to not get caught in a situation with the organization having to pay for rooms that don’t appear to be used for attendees.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

About Becky Gillette

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