Event Sourcing is a free service provided by many 3rd parties that will save you many, many hours of heavy lifting.
Pretty cool, right?
That’s a lot of time savings.
Event Sourcing and Costs (*Why is it free?*)
First, what is event Sourcing and Site selection?
You might already know, but I wouldn’t be doing every reader a service if I didn’t provide a brief description up front.
Event Sourcing and Site selection is the process of identifying, negotiating and ultimately booking a venue on your behalf, specifically hotels, for your Business’ customers, partners, and/or employees; for example, using Cvent.
The Heavy Lifting
All of the other posts you’ve read are true, it can be extremely time consuming to do the Sourcing and Site selection, especially if you are considering more than 1 city.
Now you’ve got a few properties in each City, you must send out RFPs to each with all of your details:
- Number of guests,
- Number of nights,
- Ballrooms/conference/meeting rooms requested,
- How many nights,
- F&B, and more, to name a few.
The Amount of Time
This can take weeks, as you must allot the appropriate amount of time.
Think about this, each hotel fills responds to a few RFPs before they actually have someone book. So that Sales Manager is likely juggling not only several other RFPs at the moment, but also current clients at the hotel, clients that are soon to be arriving, and quite a bit else.
So you wait a few weeks, gather all of your proposals from the various Hotels, and after meeting with your executives, you down select to a few properties based on accommodations, cost, amenities, etc etc.
This will take more time.
After you down select, now you negotiate.
What concessions and rate abatement can you get? Depends how much $$ your Business will potentially spend at their hotel, the relationship you might have with the hotel, and how many others are fighting for that same week.
And to think, this is just the beginning of your Event planning and management process!
Because of the big workload upfront that doesn’t involve anything strategic per se, just heavy lifting, it’s worth considering a 3rd party, because their service is free.
How We’re Compensated
Now we answer, “Well, why is it free to me?”.
There’s almost always a commission for booking a client at a hotel, and it is usually 7-10% of the total room block spend.
The catch? It’s only available to 3rd parties.
Now, you can see why everyone is offering this event service for free. Have 500 guests staying at a nice hotel for 4 nights? That spend can be $600,000 ($300/night).
I’ll let you do the math on a 7-10% commission.
Now this is a very rare time where I’ll be the slight bit biased in our blog, but I won’t even say it directly…
There are some 3rd parties out there that will return the commission right back to the client.
That is, if they are managing other aspects of the event for you (Not just being used for Site and Sourcing selection). This lowers your effective Room Block spend via a commission that you, as the Business, could not qualify for on your own without a 3rd party.
Although, if a 3rd party is only being used for Site and Sourcing, it’s pretty ubiquitous that they’ll keep the commission, or you will negotiate with them as to how much they’ll keep.
Why does the commission vary?
Depends on the hotel. The standard was 10%, but Hilton and Marriott have moved to 7% recently. We’ll see if this sticks, or if they move back to match the other hotels in incentivizing clients/3rd parties to book.
You might be saying, well a 3rd party shouldn’t be swayed by the commission and should put the client first – And you are absolutely correct.
However, we both know this doesn’t’ always happen…AND it should be noted if you choose a 3rd party that does forward you the commission, the commission should matter to you, as it will alter your effective spend.
Overall, the event Sourcing and Site selection can be a very laborious aspect of planning your event, unless you typically stay at the same venue year over year.
If this is you, I encourage you to at least shop around one year and let the hotels compete with each other. You may think you are getting the best rate for your Business because of your patronage, but until you show your incumbent a compelling offer from another hotel, you’ll never know if that was their best offer.
And, even if you have a large internal events staff, consider using a 3rd party for the Site and Sourcing selection, if there is a commission involved.
It could save your team countless hours at zero cost – If you don’t use a 3rd party, the hotel just keeps the “would-have-been-commission”, anyways.
Having said that, do your homework, and vet these providers; work closely as you’d like with them, so that you are still overseeing the process, while not having to do the monotonous RFP and response process.
If interested in contacting J.Shay Events about our free event Site selection and sourcing, Click here!
Need help with Event Software?
Registration, mobile, etc.