Got a canceled meeting on your hands? Want to recover some of your deposit and cancellation fees? Thanks to MeetingTrader, you now have a better chance of saving some money. I spoke with Tim Brooks, the firm’s Founder and CEO, to get a better handle on just how this works. It’s early – the MeetingTrader site goes live today – but I like what I heard. This is a site that your meeting planners should get to know.
The concept is similar to listing a home for sale. Either the meeting planner or the hotel enters the canceled event’s details on the MeetingTrader site. It goes into the “available for re-sale” list (my words). This list can then be searched by planners who are looking to book an event. If a planner sees a canceled event that might work (meaning it has the right dates and and a workable location), then the “buying” planner registers as an interested party.
Meeting Trader connects the three parties – the “selling” planner, the hotel and the “buying” planner. Meeting Trader has the tools to price out the original meeting’s contract value, which helps the three parties reach a faster agreement on how much the buying planner should pay to take over the meeting contract.
The seller stands to benefit by getting some of its deposit and/or cancelation fees back. This amount is the key to the negotiations. The buyer gets a break on the cost of the event – to the extent that the seller’s non-refundable deposits and negotiated cancelation fee are used by the hotel to offset the normal cost of the buyer’s meeting.
Meeting Trader makes money by charging a 6% transaction fee on the price paid by the buyer of the canceled contract. The seller pays the fee, similar to a homeowner paying a realtor. Meeting Trader will also charge a listing fee to the hotel or selling planner that wants to list the canceled meeting. Brooks says he is waiving the listing fees through the end of this year.
The key to Meeting Trader’s success will be getting a high volume of listings. He and his staff are contacting the group-oriented hotels in North America (mostly 4- and 5-star properties with ballrooms) to get them to post their listings. He expects to have a few dozen listings in the system within a week or so.
Meeting Trader is building white-label versions of the trading platform for a few hotel brands. Brooks says that the hotels are keen to make it easier for their customers to book meetings with more confidence, and this new technology will be one more reason to book events at these hotels.
Just how big is the market for this service? Brooks estimates the value of canceled meetings at $7 billion a year in North America. The typical cancellation rate normally runs between 4 and 8 percent, with an average meeting contract value of $550,000.
The size of the cancellation penalty typically increases as the event’s date gets closer, and can approach 90 or even 100% of the event’s expected revenue. Hotels will sometimes offer credits for future event costs to a planner that has to pay a cancellation penalty, but event planners can’t count on this.
Meeting Trader started business in 2007, went into alpha production mode in 2008 and beta production in January of this year. Brooks reports having resold $7 million of canceled contracts during the recent beta test. You can learn more at www.meetingtrader.com or by contacting Tim Brooks at +1 773 281 0001 or at firstname.lastname@example.org
If you have any experiences regarding canceled meetings or about this new service, please post ‘em here.