Forget everything you know about room blocks… at least for now.
Room blocks is the practice of reserving more than 10 guest rooms at once for meetings and events, and by and large, they have meant lower prices and increased convenience for attendees. But with the pandemic causing major meeting cancellations for a solid year, hotels have responded with new conditions and deals even more enticing than the traditional ones.
From Hilton, with its EventReady Flexible Offer, which relaxes cancellation terms, to InterContinental Hotels Group’s zero attrition, zero cancellation penalty offer that includes up to 5% off the master bill, hospitality properties have done their best in the past 12 months to bring back room blocks. If you are wondering where the practice stands now as we start to take our first steps out of quarantine, read on to find out.
Block or Not
According to our experts, room blocking, at least for meetings, is still pretty much on pause, not surprising when you consider how many meetings remain canceled or postponed. According to Nikki Fisher, convention and meetings sales manager for the Visit Greater St. Cloud Convention and Visitors Bureau, St. Cloud’s first quarter is usually strongest for consumer shows and big conferences, but this year, the Minnesota city’s convention center hasn’t hosted a single event in January, February or March.
Planners are still blocking off rooms in St Cloud for smaller meetings, “but it’s kind of hit-or-miss whether or not the attendees are staying,” Fisher said. “Especially when they’re used to bunking with somebody else, we’re seeing that they end up driving home and coming up the next day for the event.”
“Almost all of our sleeping rooms for the lodging tax that we collected are just basically people who are wanting to get either themselves or their kids out of the house for something to do,” Fisher said. “So, the sleeping rooms that are in place aren’t necessarily blocks for people traveling for events; it’s more just leisure travel.”
Reduced Rates
For the past year, it’s been a buyer’s market as far as room blocks go, and planners still able to hold meetings are reaping the benefits. In State College, Pennsylvania State University owns and operates the Penn Stater Hotel and Conference Center, which offers 300 guest rooms and 48 meeting rooms. While the property sits in a somewhat economically protected bubble thanks to its university affiliation, even The Penn Stater has cut the price of rooms.
“Our room rates are certainly much lower than they normally have been,” said Judy Karaky, the hotel’s general manager. “Right now, they’re probably $20 to $30 below what they normally would be.”
Meanwhile, in St. Cloud, room block rates have been cut by almost a fifth of their normal prices. “Our hotels in the area have just been really awesome in trying to accommodate guests,” said Fisher. “I’ve been seeing that their room block rates are much lower than they have been previously, as hotels hope to get those rooms filled. For instance, a room block that would have been $120 a night is now $100 a night.”
Evolving Terms
Lowering prices isn’t the only way hotels are fighting to stay competitive and engender goodwill with meeting planners during the COVID-19 shutdown. From room night requirements to terms around cancellation and attrition, properties are waiving or altering the conditions that usually apply to room blocks. The Penn Stater, for example, has eliminated cancellation and attrition charges and room night requirements, and Fisher said St. Cloud hotels generally “have been very gracious in accommodating those last-minute cancellations.”
Like most places, Evansville, Indiana, saw most large meetings and trade booked at its convention center cancel or postpone in 2020 and early 2021. However, even as life begins to go back to normal thanks to an ever-widening pool of Americans who have been vaccinated against the virus, hotels in the city are “looking at a flexible attrition,” according to Megan Heronemus, director of sales for Visit Evansville Indiana.
“Planners can flex up to 60 days prior to their event,” she said. “So, maybe historically, their event produced 500 room nights, but due to COVID, they’re expecting smaller attendance or they’re looking at a hybrid meeting model; then this is where that flex attrition comes in handy because they can kind of gauge their registration. At about 60 days prior, you’re going to have a pretty good idea how many folks are going to be attending. You can set attrition to 40% to 50%, much, much lower than what planners have seen prior to COVID.”
Looking Ahead
With room block pricing and terms like these, it pays for companies to get back to the business of holding meetings as soon as possible. But how long will the modified conditions last? Both Hilton and Intercontinental have extended their deals to encompass meetings held through the end of this year.
“We kind of set it to where there’s no date of when this flexibility is going to end, but I don’t see flexible attrition going anywhere soon,” said Evansville’s Heronemus. “I can see that expanding out through even the end of next year.”
As for the Penn Stater, Karaky said the hotel expects to continue its lower rates and flexible terms for at least another six months, in the hope of returning to normal in 2022.
“We are hopeful by next fall to expect a normal events and football season,” she said, “In an industry where flexibility is required, I would suggest that this past year has required the most flexibility in our lifetime of hospitality. If you thought you were a change professional before, you are now a change expert.”
