Planners Beware: Be on the Lookout for Room Block Pirates
Unofficial housing companies use various tactics to woo meeting attendees to book outside the official room block, causing associations to pay costly attrition fees. What are associations and the broader meetings industry doing to combat these poachers?
Eye patches. Captain Hook. Argh. Jack Sparrow. Ahoy Matey! Johnny Depp. Swashbuckler. All are the usual words and phrases people think of when it comes to pirates.
But for association meeting planners, the word “pirate” has completely different connotations, including lost revenue, headache, and hotel attrition fees.
That’s because “pirates” in the meeting planning field often refers to “room block pirates”—sham housing companies that contact association members and exhibitors after conference registration opens with fraudulent offerings of hotels rooms (sometimes at rates discounted from what’s posted on the meeting’s official website), requests for credit card information for previously made reservations, or pushes to book through them immediately. Typically the company claims that the meeting’s room block is nearly sold out but they can get the attendee a good rate at an overflow hotel or one outside the room block. These pirated rooms usually come with a large cancellation fee, so even if the attendee or exhibitor figures it out—or the association becomes aware of the scam—it can be too little, too late.
Even worse is that the effects of this pirating can be pretty severe for associations: They may face hotel attrition penalties—adding up to tens of thousands of dollars—for not fulfilling their room block commitments, which may result in increased attendee costs for future meetings because the organization is unable to rebook at preferred hotels for discounted rates or loses its qualification for the space it needs at a convention center. In addition, from a customer service perspective, it is extremely difficult for an association to help an attendee if his or her reservation is lost or if the hotel oversells.
While it’s hard to measure just how widespread the issue is or how often associations deal with it, three recent items have brought room block pirates and their efforts to the forefront:
- In January, ABTS Convention Services launched its “Support Associations, Book Official Housing” awareness campaign after surveying 20 medical associations it serves. It found that those groups lost $50 million annually due to “around the block” booking. “When attendees stay outside the official housing hotels, they do not have access to room drops, announcements, free shuttles, free or reduced meals, networking events, and other happenings that are a big part of the annual meeting experience,” ABTS President Davide Veglia said in a statement [PDF].
- Late last month the Convention Industry Council’s Accepted Practices Exchange announced it would launch a work group to conduct research and develop best practices, tools, and resources to aid meeting professionals in managing room blocks. “Hotel ‘poaching,’ or ‘piracy,’ is not new but seems to be on the rise and affecting meetings around the globe. In some instances a meeting’s management team may be unaware that rooms are being poached,” said MaryAnne Bobrow, who will cochair the group, in a statement.
- Earlier this week, Meetings + Conventions reported that Hospitality Financial and Technology Professionals is warning its Hospitality Industry Technology Exposition & Conference 2014 (HITEC) attendees about housing pirates. “Booking through an unofficial housing company puts you at risk for losing significant deposits, hotel reservations, and discovering hidden costs,” said Frank Wolfe, CAE, CEO of HFTP, in an email notice specifically alerting recipients about this concern. To illustrate the impact of these pirates, HFTP posted a notice [PDF] on its website outlining how poachers are approaching attendees and why they should stay within the room block.
What else can an association do to be proactive and help prevent room block pirating? Don’t let them get your list, Jerry Jacobs, a partner with Pillsbury Winthrop Shaw Pittman and general counsel to ASAE, told Associations Now previously. “For an association to post on its website any kind of list of members, attendees, exhibitors, et cetera, almost certainly it has no copyright protection, so it becomes, in the legal parlance, public domain, and the third-party block firm has a right to use that information,” he said. For further protection, he suggests associations better screen potential members and those who rent their lists.
However, if an association does find out its members are being solicited by a third party, it’s best to reach out to members immediately as HFTP did. Send emails, even a recorded voicemail, to members and registered attendees. And, of course, get your general counsel involved.
Unfortunately, no matter what the industry does, room block pirating is likely to stick around, and organizations hosting meetings like HITEC will have to continue to deal with it. Technology has made it easier than ever for poachers to mock up a website or Twitter feed that leads attendees to think they are aligned with your association. And there’s another competitor in the space that associations may need to consider when it comes to their room blocks in the future: Online rental marketplaces like Airbnb and HomeAway.
Has your association dealt with room block pirates? Have you changed your meeting’s housing guidelines and strategy to keep pirates at bay? Share your story in the comments.