Budgets + Revenue

Are Traditional Room Blocks Becoming Extinct?

Attendees who debated the question at a Convening Leaders session were divided about the question.

A full house for the room-block session at Convening Leaders.

There was a showdown Monday morning at Convening Leaders 2016 — and though it didn’t involve insults or weapons, the stakes were high, at least for meeting planners.

“We are not done talking about room blocks,” said Christine “Shimo” Shimasaki, CDME, CMP, managing director of DMAI’s empowerMINT.com initiative, as she moderated the debate-style session “Will Contracted Room Blocks Become a Thing of the Past?” (The topic was so popular that an overflow crowd was directed to a simulcast down the hall.)

Most of the audience raised their hands when Shimasaki asked if they thought room blocks are here to stay — and panelist Rachel Benedick, vice president, sales and services for Visit DENVER, built on that momentum as she advocated for the continuation of the room-block model, especially as it enables a destination to quantify the value of a meeting and earns planners concessions on meetings-related services. “Our convention centers are loss leaders,” said Benedick — in North America, as opposed to Europe, they often take a financial hit to bring business to a destination. “Are [planners] really prepared to pay the rates that you’re really going to need to pay to not only help these cities break even, but help them make a profit?”

On her side was panelist Robin Preston, CEM, assistance executive director of the National School Boards Association, who cited room blocks as critical to quality control. “Most importantly, we’re responsible for creating a positive attendee experience. That starts with the host hotel. By providing a contracted hotel room block, you know you’re going to provide the hotel-room experience that you’re promising your attendees,” said Preston.

However, presenter Gregg H. Talley, FASAE, CMP, and president and CEO of Talley Management Group, argued that the room block as we know it is “a dinosaur,” especially as instant access to information enables attendees to make lodging choices that align with their budgets and location preferences. “Loyalty, schmoyalty,” said Talley. “[Attendees] are not loyal to you, they’re not loyal to your city, and they’re not loyal to your association. Attendees are driving their own experiences.”

He cited statistics from the recent Tourism Economics study, The Event Room Demand Study: How Many Rooms Does Your Convention Really Use? — authored by Shimasaki — that one in three room blocks are booked outside of the block. “I’m already losing 30 percent of [my meeting’s] value, based on how [destinations] quantify my business right now. That can’t continue.”

Alongside Talley was panelist Lisa Astorga, CMP, director of meetings for the International Society on Thrombosis and Haemostasis, who evoked the time that planners spend dealing with room-block poachers as but one stressor on the room-block model. “Look at the disruptors: Online hotel searches. Room pirates. What it does to us in term of management of that, and staff time, is enormous. Are we making that up in terms of the concessions we’re getting from our contracts?”

When one audience member asked how she could demonstrate the value of her meeting to a destination in the absence of a contracted room block, the panelists cited DMAI’s Event Impact Calculator as a tool. Yet the question still looms — and even Benedick and Preston conceded the room blocks, at the very least, need to evolve – or at least be ‘right-sized.’ “We have to understand what motivates our attendees. If we can understand that a little bit more, about what’s motivating and driving attendee behavior, we can make a more successful meeting in our city.”

“Knowing what your attendees want, and your attendees’ profile, is something that’s going to become more and more important,” Shimasaki agreed. “The decision to attend is going to become a behavioral template.”

Talley was adamant in his assertion that room blocks are, well, on the chopping block. “We absolutely have to have a new model,” Talley added, “and really need to start thinking about mission-based site selection,” when a destination’s strengths align with a meeting’s desired outcomes.

What do you think — will contracted room blocks still be around five years from now?

Corin Hirsch

Corin Hirsch is associate editor of Convene.