Events Propel Hotel Revenue

Hotel sales people are normally a vocal lot.

But ask one of them about upcoming conventions, and they’ll quickly slap on their no ‘mo’ tell face.

“If we release a major convention we have in June too soon, then a smaller hotel might feel inclined to offer the customer a lower rate,” said Don DeSpain, director of sales for the Embassy Suites in Rogers. Not only would that hurt the hotel, he said, but also Rogers would lose sales tax revenue.

The group-bookings segment has become increasingly crucial because of the growing number of available hotel rooms in the market.

DeSpain said that five years ago, no one even knew their customer.

“Because of the number of hotels in the area that have opened, the fact that demand is going to slow, the hotels that have survived are the ones that can retain customers,” DeSpain said.

And, growing revenue, not just sustaining it, is the trick.

DeSpain said events account for two-thirds of food revenues and 50 percent of room revenue at the Embassy Suites.

“A major convention with 300 to 500 people over a three- to four-day period could easily bring from $50,000 to $250,000 to the hotel and twice that to the area in the form of incremental revenues,” DeSpain said.

Steve Wright, director of sales and marketing for the Hilton Garden Inn, said when he came to the market in 1996, the Ramada (now an Econo Lodge) was the only Bentonville-Rogers hotel that had a sales person.

“Probably 50 percent of the hotels in the market now have some type of sales force,” Wright said.

And sales is not just group sales, he said.

“They are also soliciting local corporations and local offices who have transient business as well,” Wright said. “The job is to develop relationships with surrounding companies.”

Wright said group bookings account for about 25 percent of total booking revenue, a number that he said would be much higher at a hotel with more meeting space.

Jason Selle, catering manager for the Holiday Inn Northwest Arkansas, said 80 percent of the hotel’s meeting business is repeat.

Selle said hotel rooms and meeting space are the biggest revenue generator for the property.

DeSpain said the eight-member sales team is divided into segments and each has a specialty type of event in mind.

He said the staff gets involved in the community, solicits business over the phone, goes on outside sales calls and also uses the Internet to prospect.

“We use leads from our Hilton Brand National Sales Effort, our other John Q. Hammons hotels, area information and local members of state and regional groups to help attract business,” DeSpain said.

He said space in the new 125,000-SF Hammons Center convention center adjacent to the hotel will be leased as one property with the Embassy when it opens in 2006.

DeSpain said the Hammons Center will need a 50 percent occupancy rate to be successful.

So far, the new center has trade shows, major state conventions, religious and social organizations booked.

Wright said a lot of his group business in the summer is related to the Amateur Softball Association of America and United States Specialty Sports Association baseball tournaments.

Wright said by working with tournament directors on pricing and service expectations, the outcome is better, because the tournament directors count on the hotels and the teams.

Wright said the hotel could offer bargaining points in its group packages, such as free movies, or a free room for the coach.

“It depends on what the group needs are,” Wright said.

DeSpain said many state and regional conventions that were held in Little Rock or Hot Springs have moved to Rogers. The new convention center will “up the stakes” even more.

“The point of our convention center is to attract new business to the area,” DeSpain said. “Now, because of growth and development, this is a great place to bring a meeting. You can be a big fish in a small pond. You can take over the hotel. The Chambers [of Commerce] are more willing to work with you.”

Stepping Up

The Rogers Convention & Visitors Bureau is investing $100,000 in its first year to bring on a new staff person whose focus will be recruiting convention sales.

Bethany Stephens, executive director of the Rogers Convention & Visitors Bureau at the Rogers-Lowell Area Chamber of Commerce, said the bureau is hiring for the position now in anticipation of the new Hammons Center opening.

Stephens said the Chamber is pushing its “Bring it Home” campaign, which focuses on encouraging locals to think of conventions and suggest them to the Chamber for recruitment. Stephens said a person might not want to assume the responsibility of organizing the convention, so that’s where the Chamber comes in.

“If we can offer them an incentive payment based on their need that will bring them here versus another city … then we will do that,” Stephens said.

So far, the Chamber has handed out fewer than a dozen incentive payments, but they can range from $1,000 to $5,000 and are subject to how much economic impact a group could bring.

The incentive payment will go toward paying a bill, such as catering, but not directly to the organization.

The Knights of Columbus International Golf Tournament, the Southwest Regional Orchid Growers Association and the Arkansas Master Gardeners Convention received incentives this year.

Tom Larkin, who helped coordinate the Southwest Regional Orchid Growers Association event, said the Rogers Chamber sponsored a $2,500 luncheon at the group’s three-day $29,000 event at the Embassy Suites.

Larkin, who has been an avid orchid fan for more than 50 years, said he started in 2002 to campaign for the event, which catered to seven states and 35 orchid societies. Larkin did targeted mailings to about 300 of the 30,000 members and placed advertisements in newsletters to drum up support.

“We formed a society about 10 years ago, and we established a reputation for ourselves by our growth, and we’ve got one of the best newsletters in the country,” Larkin said. “We more or less took that, plus what was happening in Northwest Arkansas and did an awful lot of horn-blowing.”

The meeting had 185 paid registrants and amounted to 200 Embassy hotel nights booked. Next year’s meeting will be in Little Rock.

Larkin said the group could host another event in three to five years after it rebuilds its budget, which was hit with about $8,000 in costs.

They’ve already been invited to host an International Orchid convention, a subject that is still on the debate table.

“Some people said this was the best one they’ve ever been to,” Larkin said. “And some of these people have been going to these meetings since the ’50s.”

Stephens said the biggest challenge Northwest Arkansas faces is notoriety.

“We are not one of the big three destinations in the state of Arkansas,” Stephens said. “Outside of this region, people aren’t familiar with Northwest Arkansas as a destination. It’s building that image, showing them that we are willing to bend over backwards to get them here and service them once they get here.”

Marilyn Heifner, executive director of the Fayetteville Advertising and Promotion Commission, said she thinks Fayetteville does a good job of attracting conventions. She said her office works closely with the University of Arkansas to sell the area.

They lured the Arkansas High School Coaches Clinic and the All Star Games away from Conway four years ago, which was a 23-year tradition in that town.

Other recent additions were the American College Theater Festival and the Arkansas Forestry Association.

The Fayetteville A&P is currently offering a bid for the 2007 Association of University Physical Plant Administrators event.

“We work closely with the hotels in the area,” Heifner said. “We are kind of the facilitator instead of the end result.”

Heifner said the top five non-Razorback Football weekend revenue generates add up to about $80 million, with Bikes Blues & BBQ accounting for $40 million and Lights of the Ozarks generating $30 million.