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ABSTRACT
Since the meeting industry, especially association meeting market, is a multibillion-dollar market in the hospitality industry, site selection is perceived to be very important. A city selection is usually made prior to the selection of a hotel for a meeting site. To compete in the meetings market, hotels should develop a unique marketing mix as well as have an interrelationship with other hospitality organizations in a destination. A factor analysis will be conducted to identify the key variables used for hotel selection and destination selection. Suggestions and ideas for this study will be reviewed.
INTRODUCTION
The meeting industry has shown a continually high growth rate as a major revenue generator in the hospitality industry. The growth of the meeting market reflects the developments in the hospitality industry. This market includes two major segments: association meetings and corporate meetings. Of the two, the association meeting segment is gaining more attention from the hospitality industry as meeting expenditures increase (Montogomery & Strike, 1995). A major contributor to the growth of meetings industry was the increase in small association meetings on the state and regional level (Hoyle, Dorf, & Jones, 1989; Shaw, 1986). Despite the importance of this market, little information is available on factors influencing the site selection of state and regional meetings.
PURPOSE OF THE STUDY
The study purpose is to identify criteria of state and regional associations for selection of hotel properties and destinations for their annual meeting.
OBJECTIVES
Specific objectives of this study are to:
1. Identify factors considered important for hotel selection.
2. Identify factors considered important for destination selection.
RESEARCH QUESTIONS
This study will address the following research questions:
Economic Impacts of the Meeting Industry on the Hotel Industry,
Approximately one million meetings are held in the United States each year (Weissinger, 1992). The average number of participants is 90 million and their spending estimated at over $43.7 billion. On average, attendees spend $719 for a three-day on-site meeting. These meeting expenditures also have a multiplier impact.
In 1994, the Convention Liaison Council reported the meeting industry to be the 22nd largest contributor to the gross national product (Shure, 1995). According to the United States Department of Commerce (1991), conventions, expositions, meetings, and the incentive travel ranked 17th as a single industry among all major private sector industries in the United States. Shure (1995) described the meetings market as a "red-hot' industry because of its enormous expenditures and direct impact on businesses in many industries. Furthermore, the meeting industry impacts economies through employment, taxes, and secondary spending in cities, regions, and states.
The largest industries which shared total meeting dollars in 1994 were hotels and other meeting facilities, air transportation, and restaurants (Shure, 1995). Hotels and other meeting places generated $26.89 billion, or 32.5 percent of the total meeting dollar spent in 1994. The air transportation industry generated $19.26 billion in 1994 from the meetings industry representing 23.3 percent of total meeting dollars. Restaurants shared $9.98 billion in the same year representing 12.1 percent of total meeting dollars. The remainder was shared by the other ground transportation (8.7 %), retail trade (6.7%), businesses: business services (6.6%), entertainment (4.5%), miscellaneous other business expenses (2.9%), unspecified industries (1.2%), equipment rentals (.6%), cruises (.4%), advertising (.3%), and promotion (.3%).
Chipkin (1990) reported that the meeting market represents approximately 50 percent of total lodging industry revenues. As the meeting industry has increased expenditures in the hotel business, other hospitality business sectors have also grown (Shure, 1995; Hoyle, et al., 1989). The relationship between hotels and other hospitality businesses is important, as is the relationship between the meeting market and hotel business. Hotels have a variety of market segments and cannot meet the needs of all buyers. The hotel industry has developed into a very sophisticated business, and responded to a saturated market by creating properties targeted to specific customer demands. As hotels have profited from the meetings market, they are realizing the need to meet the demands of this segment.
Today, hotels no longer supply only food and beds, but also provide
the additional services of facilities and services to the meeting market.
Hoyle, et al. (1989) discussed a strong interrelationship between the two
industries. Meeting industry growth would not be possible without meeting
facilities, food, services, and accommodations provided by hotels. Without
the association and corporate meeting market, there would be less development
in the hotel industry. Of the two, association meetings impact more strongly
the hotel industry in terms of meeting expenditures and attendance than
the corporate meeting market. Due to the impact of the association meeting
market on hotel business, more research is required to understand this
segment.
Associations and Factors Influencing Their Site Selection
The scope of association meetings is usually categorized into international, national, state/regional, and local association meetings. As the geographic scope of the associations decreases, so does the meeting size. It is true that the size of state and regional meetings is smaller than that of national associations. However, one common misconception of the meeting market is that all conventions are large meetings of thousands of people (Abbey & Link, 1994). There are more small meetings than large meetings. According to the association meeting trend report (1983), fewer than 500 attendees represented 75 percent of attendance at state and regional conventions, fewer than 300 attendees 56 percent, and fewer than 200 attendees 36 percent. Despite the smaller size, it represents a lucrative market to the hospitality industry. Industry statistical research conducted periodically for state association meetings reveals significant expenditures and growth trends in this segment of the association meetings market (Hoyle, et al., 1989).
The factors considered by meeting planners for meeting site selection clearly help hoteliers develop hotel products as well as services. Despite a number of studies that have explored site-specific factors considered important for national association meetings, little information is known about the needs of state and regional associations. Therefore, research that investigates state and regional association's preferences in site selection is needed.
Lee and Weaver (1994) discussed independent variables considered in site selection such as different types of meetings based on the attendees' characteristics, group size, meeting program, and meeting length. This study will test some of these independent variables. In addition, there are certain important factors influencing site selection. Ruthorford (1990) provided the following criteria for site selection: quality and quantity of hotel room as well as food and beverage, recreation and entertainment, prestige or image, and budget.
Unlike other studies on association meeting planner's wants and needs, the Meetings Market Report (Edeistein & Benini, 1994) provided significant information in distinguishing the variables of a hotel from those of a destination. This distinction between hotel and destination variables is important for this study. Edelstein & Benini (1994) found that when association meeting planners select a destination and hotel, they consider availability of hotels and food and room price most important in the selection of a meeting destination and a hotel.
Hotel Variables
Hall (1980) stated that hoteliers' targeting for the meeting market is vital. He pointed out that the current shortcoming hoteliers is to apply a marketing strategy for other hotel customers to the meeting market. Before hoteliers expand and add meeting space, guestrooms, and meeting equipment, they must learn how to satisfy the specific needs and wants of the meetings market. Factors considered by the association meeting market in the literature will be reviewed in this section.
Shaw, Lewis, and Khorey (1991) surveyed 544 meeting planners concerning satisfaction and important factors with convention services of a 900 room hotel. Regression analysis revealed that the responsiveness of convention service managers easily explained the largest part (86%) of the variance in overall satisfaction. They used a factor analysis to reduce the number of variables. Factors identified as the best predictors of overall satisfaction included meeting rooms/breaks, billing, and personal services. The personal services included convention service manager responsiveness, convention service manager accessibility, preliminary planning and pre-convention meeting. Meeting rooms/breaks included timely set-ups and coffee breaks, noise-free rooms, and refreshed meeting rooms. Of the three factors identified, personal services emerged as the best predictor of client overall satisfaction.
Conjoint analysis is another research technique that simultaneously assesses the relative weights of different product attributes. Renaghan and Kay (1987) used conjoint analysis to understand the needs and wants of meeting planners. Of 72 possible different combinations of the 5 attributes, 16 significant scenarios were chosen based on a Latin-square design. They identified the most preferred combinations as follows:
Some researchers discussed the importance of variables in terms of hotel selection, while other researchers discussed the variables associated with destination. Research has also been done on overall perception of meeting site selection without regard to a hotel or destination. Even though a previous review illustrated that city selection is made prior to hotel selection for a meeting site, little research is available on perceived attributes important for meeting site selection. This study aims to identify important factors for selecting a destination and a hotel meeting site for state and regional associations.
Destination Variables
Although many researchers survey destination image, there is no precise definition of it (Echtner & Ritchie, 1991). If an individual believes that a region will meet his or her needs, the region will be more likely attractive to be selected as a potential destination (Hu &Ritchie, 1993). Several researchers found that destination image play an important role in tourist buying behavior although it has been infrequently studied (Chon, 1990; Selby & Morgan, 1996).
Oppermann (1997) found that there was no significant difference in the perceptions of the destinations between the size of meetings. A literature review on importance of convention destination attributes indicated that availability of hotels and meeting facilities, access to location, and hotel service quality are generally important (ASAE, 1992; Edelstein & Benini, 1994; Oppermann, 1998).
A Hospitality Marketing Mix
The hospitality industry is identified as a service industry. The marketing of hospitality services has several unique characteristics (Morrison, 1989). An effective marketing manager needs to visualize the broad scope of the hospitality industry and the many different organizations within it. Every organization has a marketing mix. Morrison (1989) described a marketing mix as marketing strategy factors used to meet the needs of target markets.
A marketing mix for hotels should be developed reflecting the differences between product and services. Several researchers attempted to distinguish hospitality services marketing from products marketing (Lewis, 1995; Morrison, 1989; Renaghan, 1981). Morrison (1989) insisted that hospitality and travel marketing required a unique marketing mix as a separate branch of marketing. He added 4 Ps (People, Packaging, Programming, and Partnership) to the traditional 4 Ps (Product, Place, Promotion, and Price). For example, hotels could provide packages that include accommodations, meals, some local tours or attraction-admissions, or special events or programs. For programming, hotels could arrange golf or tennis tournaments for the target market.
Lenaghan (1981) first attempted to develop a marketing mix based on a set of interrelated elements: the product/service mix, the presentation mix, and the communication mix, as described below.
1. The product/service mix: Lenaghan (1981) defined the product/service mix as the simultaneous combination of products and services, whether free or for sale, to meet the needs and wants of the target market. Morrison (1989) included the following six elements under a category of the hospitality product and service mix; 1. Staff behavior, appearance, and uniforms; 2. Building exteriors; 3. equipment; 4. Furniture and fixtures; 5. Signage and communications with customers and other publics. Hospitality businesses focus more on marketing products than marketing services since products can be easily testmarketed (Renaghan, 1981).
2. The presentation mix. The presentation mix represents all components of a business to increase the tangibility of the product/service mix perceived by the target market at the right place and the right time. Reneghan (1981) included the physical plant, location, atmospherics, price, and employees. Physical plant represents the exterior as well as location of profit centers within the building. Lovelock (1979), Lewis (1995), and Morrison (1989) also emphasized people as a hospitality product. The hospitality industry is a business of people providing services to people. This "people" product is different from manufactured products in requiring separate consideration such as staff recruitment, selection, orientation, training, supervision, and motivation (Morrison, 1989).
3. The communication mix. The communication mix was the total of all communications between the business and the target market used to increase the tangibility of the product/service mix, establish or monitor customer expectations, or to enhance purchasing from customers. Morrison (1989) emphasized the importance of communications to reinforce the company's image. He included advertising, personal selling, sales promotion, merchandising and public relations and publicity activities as communication tools. Prior research revealed that positive word-of-mouth advertising could be the most powerful force in attracting target markets. This study will ask participants what information sources they use most for meeting site selection to confirm earlier studies.
Renaghan (1981) outlined components of the hospitality marketing mix to determine the weight of variables in the meeting planner's buying decision. Such considerations would be instrumental in the development of appropriate marketing strategies for hotels interested in the meetings market. Hotel marketers should know that meeting planners consider both the internal and external variables of the hotels to select meeting places. Hotels in destination areas have a mutual relationship with other hospitality organizations. Hoteliers would need to know that associations consider both the hotel and destination variables. Association meeting planners initially select a destination area and subsequently research for hotel accommodations. Despite the importance of the factors for hotels and destinations, little research is available on this topic. This study will attempt to identify important hotel and destination variables for state and regional association meeting site selection.
The Destination Mix
The hospitality industry relates to organizations significantly impacting the marketing of hospitality services. Organizations are mutually dependent from a marketing standpoint. Understanding and managing these relationships may be a key for hotel marketers to succeed in satisfying the target market. Morrison (1989) suggested different marketing approaches needed for hospitality and travel industry. He proposed a destination mix of five components: attractions and events, facilities, infrastructure and transportation amenities, and hospitality resources. Attractions and events play an important role in drawing travelers.
In addition, Morrison (1989) revealed that both federal and state tourism marketing agencies and convention and visitors bureaus work to market destinations for travelers. Destination marketing organizations should work with local hospitality operations to maximize advertise promotion. Consequently, hotels should have a very strong relationship with other hospitality organizations in destination areas to attract their target markets.
RESEARCH DESIGN
A number of important attributes associated with hotel and destination selection will be identified based on the extensive literature review. A self-administered questionnaire will be designed to measure state and regional associations' perceptions of important attributes in site selection as well as demographic information.
A survey will be faxed or mailed to a random sample of associations listed in the Index of 1997 State/Regional Association Directory. A facsimile machine will be used as a primary survey tool. If an association does not own a fax machine, it will receive a mail survey to reduce the possibility of a confounding variable. Names will be deleted for reporting to protect participants' confidentiality. Survey response rate will be compared between the two research tools. The pilot study will include 100 randomly selected associations located in Kansas and is to be conducted in spring of 1998 to test survey validity and reliability. The actual study will include 500 associations randomly selected from 5 Midwestern states (Kansas, Missouri, Iowa, Oklahoma, and Texas) to be conducted in the summer of 1998. Systematic random sampling will be used.
The goals of data analysis are to obtain basic information concerning the characteristics of the associations and to investigate selection factors of hotel and destination sites important to annual meetings of state and regional associations. All the attributes associated with meeting sites will be evaluated based on a Likert scale because of the power and simplicity of the format (Alreck & Settle, 1995). The 5-point scale corresponds to 1 for non-applicable, 2 for unimportant, 3 for neutral, 4 for important, and 5 for extremely important. A factor analysis will be used to reduce the attributes. The expected result of factor analysis is the reduction of a large number of variables to a few factors without serious loss of information, because only redundant material will be removed. Attributes will be grouped to the same factor provided by a computer based on the mean score. ANOVA will be used to determine whether differences in factors are present. Once the data is collected, the questionnaires will be coded and SPSS will also be used for data analysis of the actual survey.
SUMMARY
This study provides a review of the growth of the meeting industry and its economic impact to the hospitality industry. The relationship between hotel businesses and the meeting market is significant. Since associations were found to consider a destination prior to a hotel selection for a meeting, factors influencing associations' meeting site selection are examined using two kinds of variable, hotel and the other destination variables. Those variables will be analyzed using factor analysis.
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