Dealing with Disruptors

By Judy Frankel

In today’s meeting and events landscape, room blocks are under siege. It isn’t necessarily a new threat, but one that continues to grow and change over time. In today’s tech forward environment, meetings and event planners are currently contending with a new element that impinges upon the traditional accommodations  room block—Airbnb.

Airbnb was started in 2008, and has clearly disrupted the accommodations market. While the concept of home-sharing is not new, companies like VRBO and Homestay have been around for years, Airbnb has become the brand standard for visitors who wanted something different from the typical hotel experience.

Leisure and business travelers alike have opted for Airbnb and perusing through the online listings, it is clear that Airbnb is rife with choice. And there is no question about its popularity. Since its inception in 2008, Airbnb has estimated that more than 150 million travelers have stayed in its more than 3 million listings in more than 191 countries.

Today’s business traveler is a savvy one. Empowered by a wide range of choice and unprecedented access, and increasingly used to customizing their own experience when they travel, many have extended this behavior to their work travel. Airbnb offers a wide variety of choice and price points. Initially, Airbnb’s success engulfed the leisure traveler market but there is clearly growing demand for Airbnb accommodations from conference attendees.

WHY OPT OUT?

The threat to the room block is not a new phenomenon. In the meetings and events industry, there have always been elements that have challenged but not thwarted meeting planners.

Deb Archer, president and CEO of the Greater Madison Convention & Visitors Bureau and Madison Area Sports Commission shares her perspective. “There are a wide variety of reasons that drive people to stay outside the block including the interest in a personal, preferred hotel for loyalty points, cost and privacy,” she says. Now, experience has also become part of the equation and that has opened the door for options like Airbnb.

LESSONS OF THE PAST

Jason Ilstrup, general manager of Hotel Red in Madison and vice president of the Greater Madison Hotel and Lodging Association recalls when boutique hotels were perceived as the primary threat to traditional room blocks and the established brands by extension were afraid of the impact that this new way of “staying” would impact their business.

“Around 20 years ago, when boutique hotels were just coming onto the scene,” says Ilstrup, “they were able to change the way people booked,“ he explains. Boutique hotels offered travelers something different and unique and could be considered the first foray into the hugely popular “local” movement that propels Airbnb’s success today.

In both Madison and Milwaukee, the Airbnb phenomenon has impacted meetings and events. While there are no definitive statistics that any of the CVBs interviewed were able to provide, they agreed that consumers’ habits are changing.

EMPOWER THE ATTENDEE

Gus Martinez, convention sales manager with Visit Milwaukee, while keenly aware of the changing behavior of attendees, feels that there is much that can be done to preserve or even bolster your room block in the face of modern challenges. He suggests by educating the attendee you can empower them to make the right choice. By having materials and information that overstate the importance of staying within the block, you are subtly messaging how to be a good attendee.

“Education,” says Martinez, is a key component of making attendees understand the importance of the room block to the overall health and success of the event. If the attendee is offsite, they will be missing out. “By committing to staying within the room block, attendees are naturally going to be more engaged in all the elements of the event,” he explains.

Many meeting professionals are insisting on lower than otherwise published rates and holding hotels to respect the contracted rate with language clearly stating the hotel cannot offer lower, published rates; some planners are adding in other incentives for staying within the block like discounts in the bookstore, other merchandise areas or even exclusive access to special activities, early access to various attractions, explains Janine Watcher, director of Convention and Event Services for the Greater Madison Convention & Visitors Bureau.

Martinez suggests that having a mix of hotel options (including competing brands) is another way to attract attendees to book within the block. Hotel reward programs breed fierce loyalty and that just isn’t an option with Airbnb.

Others have tried re-creating local experiences like pop up markets onsite as a way of keeping their attendees immersed in the event but still allowing them to experience local flair and culture.

THINKING OUTSIDE OF THE BLOCK

With ever-increasing expectations to manage, planners may opt to further empower the attendee with additional education of the impact of off-room block accommodations and the consequences to the event.

Professional event planners have faced the issue of booking outside of the block for many years—especially with the proliferation of online travel agents reports Wachter. “There are many ways meeting professionals are approaching this issue,” says Wachter. Some offer discounted registration fees if individuals book within the official housing block; some are providing housing links first before registration or simply adding message strategies to their registration pages informing attendees that in order to keep registration rates low, it is imperative for attendees to stay within the housing block.

THE SAME BUT DIFFERENT

Nowadays, business travelers are not immune to wanting to experience the destination in unconventional ways. Airbnb can be perceived by the attendee as being the best equipped to answer that demand.

But is it the right choice for the event attendees?

While there are ample choices, Airbnb accommodations lack front desks, housekeeping and loyalty programs, which can be important to business travelers and conference attendees.

With no welcome desk or concierge to assist with other elements of your attendees experience such as making dinner reservations or providing additional information and resources about the destination, Airbnb falls short adds Martinez.

Attendees who opt to stay outside of the block would obviously miss out on additional networking opportunities with other attendees and more face time with conference goers adds Archer. Opting for Airbnb may also cause additional and unexpected transportation issues and costs for attendees.

While the overall success of the meeting or event is not dictated by room blocks, there is an important relationship between the two.

From a meeting planner perspective, the effect of booking outside of the block can also impact other key performance indicators of the event success. For example, out of the block bookings can hamper accurate economic impact reporting, which is often a critical metric for cities and event stakeholders to monitor.

While no planner is eager to be punitive towards their attendees, some have instituted a penalty, sometimes as high as an additional $250 for booking outside of the block on registration fees to help keep the block robust.

IF YOU CAN’T BEAT ‘EM, JOIN ‘EM

In today’s competitive meeting market, some planners are opting to work with Airbnb to incorporate this element into the menu of accommodation choices according to Skift, a popular hospitality news website. Recent high profile associations include partnerships with Airbnb at SXSW in Austin. Airbnb now offers a portal for corporate travel managers to see up to the minute reports on booking, spend and average daily rate attendees will pay for their Airbnb rental. There is also a map function that will all planners to see who is staying where. The tool is a real win for planners who are looking to incorporate Airbnb into their event.

TRENDING DOWN

There is some good news for planners worried about the onslaught of Airbnb and other home stay options. Some believe that the apex of the trend has passed and some meeting planners are seeing a return of those attendees who had once booked outside of the block. “People are more educated nowadays,“ says Denise Farrell, who handles procurement for Meetings and Incentives Worldwide, “and while they may have opted out previously, now the trend seems to be for people to book within the block.”

Christopher Dyer from the Wisconsin chapter of Meeting Professionals International reports that in his experience, he has not seen a room block drop due to Airbnb. “For the majority of attendees, the social or networking components of the event are just too important to miss out on,” and would stand to reason that they are staying away from Airbnb.