This is nothing new; in fact, if you’ve been in the industry longer than 10 years, you’ve experienced the highs and lows that are the cyclical nature of any economy. But this one seems different. Perhaps it’s because the market has been so strong for so long, that it’s increasing the division of power between the haves (suppliers) and the have-nots (planners).
Just last week, I overheard a planner saying, “I can’t wait until the market shifts so I can finally sock it to these suppliers.”
Another planner just told me of getting all the way to the contract negotiation phase with a hotel. She made her client’s tight deadline known to the supplier, yet the supplier went on vacation without notice to her! When he returned, she was frustrated and told him so. His response? “I don’t think I’m going to be able to work with you anymore.” He turned her business away, rather than apologize and save the relationship. His GM ignored her communications as well. (As an aside, the planner has told hundreds of planners about the hotel’s bad behavior – does the hotel care now? Obviously not, while they’re swimming in contracts. Will they care someday? Yep.)
Planners everywhere are frustrated, often backed into a corner without any negotiating power. They have to take what they can get, without much leverage for their stakeholders.
Sound familiar? It should. It’s the same way suppliers felt during the Great Recession.
After witnessing 25 years of market shifts myself, one thing is clear: the pendulum always swings. One truth I’ve discovered: the way we treat people when we have all the power is the way they’ll treat us when they have all the power.
This, then, begs the question: do you want to take, take, take while you have all the power, leaving the other side frustrated, belittled, and awaiting revenge? Or are you behaving like the partner you call yourself? Yes, we lovingly call each other “industry partners,” but what does that mean when we seek to take everything we can, and leave nothing for the other? This is not my idea of a partnership.
I understand the “Evil Revenue Managers” are easy to blame in the current robust economy, but I ask you this, supplier friends: are you really doing all you can to protect the relationship with your planner? To help the planner get a few ‘wins’ during the negotiation? If not, there’s no relationship there, and the planner has no reason to repay your kindness when the market shifts…and it will.
I feel a certain amount of regret for young suppliers and planners who entered the market in the past six years, and have known nothing different. These supplier newcomers will have a rude awakening in a couple years when their power seeps away. In many cases, planner newcomers have no idea what real planner/supplier partnership looks like. There are exceptions on both sides, of course, but by and large, I’m hearing from a lot of frustrated planners – they aren’t the exception, they’re the rule right now.
Rest assured…the market will shift. I believe we’ll begin to see signs of the US economy taking a downturn by mid-2020 – less than 24 months from now, unless something unexpected happens in the world to speed it along sooner.
According to the Federal Reserve, one of the best indicators of a recession is the Yield Spread. “The spread equals the difference between the short-term borrowing rate set by the Federal Reserve (the Fed) and interest rates on longer term treasury notes, determined by bond market activity,” according to First Tuesday Journal (https://bit.ly/yieldspread). “The yield spread is expected to slip to near zero by mid-2019, projecting a recession to arrive in 2020.”
Where does all this leave us as an industry? I’m fearful that all the pent-up frustration of planners across the US is awaiting an opportunity for payback.
Suppliers – ask yourself this: are you a true advocate for your planners? Can you do more to build the relationships you’ll need to sustain your career during the next recession? Are you having actual conversations with your planners (Cvent and email conversations don’t count – try a video call like Zoom or Skype to bring the human factor back) to determine a few things you can concede during negotiations to leave the other side with some power and dignity?
Planners – ask yourself this: are you approaching negotiations from a position of defensiveness, or partnership? Are you having actual conversations with your suppliers (same here - Cvent and email conversations don’t count – try a video call like Zoom or Skype to bring the human factor back) to explain your needs and ask for a win-win?
Rather than act as an industry divided, let’s relearn how to be true partners. These relationships have to start at the grassroots level – when one planner and one supplier decide to work together toward a common goal. Let’s make it common again.
Shawna Suckow, CMP, is the founder of SPIN: Senior Professionals Industry Network – the world’s largest association for hospitality planners and suppliers with 10+ years’ experience (www.SpinPlanners.com). Today, she speaks all over the world, helping planners orchestrate more engaging meetings, and helping hospitality suppliers understand how to market and sell more effectively to tough buyers. www.ShawnaSuckow.com