In the current state of our industry, it is highly likely that you have bumped into a competitive situation where you lost business to an inhouse audiovisual provider. You may have felt the frustration of watching your client pay service charges and premium pricing on gear so they ended up paying more for less…while you stood by with incredible discounts and best-in-class labor and gear. Les Goldberg of LMG wrote about that in a previous issue of Rental & Staging, pointing out that consolidation has led to a fewer number of key players in the audiovisual world, and highlighting a common dilemma among meeting planner—whether to bring in an outside audiovisual company or contract with the inhouse supplier based in the hotel or convention center.
When this happens, you lose business to a less-qualified and/or inhouse AV provider, perhaps it’s because the client didn’t closely review their contract for an exclusivity clause. Or, more likely, the inhouse used other negotiating tactics, such as offering reduced-cost or free WiFi. Speaking from experience, this is one of the most frustrating bargaining chips a competitor can lay down because it’s one area where you can’t throw in a few free printers or provide an adequate substitute. Yes, if there is one stronghold that we need to watch closely, it’s the current status of hotel High Speed Internet Access (HSIA).
If you’re thinking you can sit back and ignore this problem because it’s not “staging,” you may want to think again. In an AVGirl poll recently conducted of 621 users on Twitter, 100 percent of suppliers said that the exorbitant prices on bandwidth/WiFi at meeting venues are hurting their buyer’s budgets for technology at events (including AV spend). And 85% of buyers answered affirmatively. And if you’ve ever gone up against the in-house and they used the WiFi pricing against you, you know this situation impacts our bottom line.
So what is driving these ridiculous prices—and just how ridiculous are they? Well, right now it basically boils down to, “because we can.” As a champion of being fair and balanced, it pains me to say that there is generally no real reason for the prices we see now. These hotels are, well, sticking it to us folks. First, look at the costs associated with a hotel’s pipeline. What they pay their Internet Service Provider (ISP) to deliver is no different from what you pay at your place of business; it’s the same Internet wherever you go! Something just doesn’t feel right when you pay $8,000/day for 50Mbps dedicated Internet in the meeting space. Especially when you think about fiber-optic 1Gbps speeds that are available at just a few thousand a month. Call me crazy, but those numbers sound like a whole heck of a lot of padded profit. And when the hotel sales person is suddenly willing to hack that number into half or a quarter as much to keep the AV business in-house, it becomes pretty apparent what kind of margins we are up against.
For the staging company that is trying to compete in this environment the stakes are tough. How can we continue to battle the stronghold on WiFi? Unfortunately, as of now, there is no true antidote to the toxin. However, there are a couple of ways we can arm ourselves with possible solutions. First, get educated on WiFi/bandwidth. Learn about this technology so you can offer advice and resources on how your client can be better prepared to negotiate pricing, as well as get what they need. Next, look into external ISPs for events. One possibility is Tradeshow Internet, a company that has been educating the industry and supplying alternatives to expensive in-house Internet for many years. Finally, keep an eye open for venues with reasonable pricing and updated technology so you can recommend those outlets for your clients (for example, the LVCC just switched from Smart City to Cox Business Solutions– dropping a comparable product from $1674 to $745!). If there is one thing I have discovered in my consulting on bandwidth over the last couple of years, it’s that buyers are frustrated and overwhelmed. They are often given misinformation (usually just because of ignorance rather than malice), paying too much, ordering too little, and just generally lost in the process. Arming yourself with a deeper degree of knowledge and familiarity with HSIA in the venues where we work will not only ensure our needs from a technical side are met, but will also give you one more opportunity to provide outstanding service to your clients.
Midori Connolly ([email protected]) was chosen at InfoComm 2012 in Las Vegas to serve as the Chair of the InfoComm Rental & Staging Council. She is the “chief” in new staging/live event technology company Chief AVGirl. She is best known for producing the first set of best practices for Sustainable AV Staging. Since her start in hi-tech at the age of nineteen, she has been training and teaching groups in places as far-reaching as South Korea to spread her gospel of the strategic use of technology and sustainable meetings as a business strategy. Midori is recognized as a Platinum Speaker by Meeting Professionals International, Best-in-Class Speaker for Professional Convention Managers Association and was most recently named as a Most Innovative Event Professional by BizBash media and 40 Under 40 by Collaborate and Connect Magazines.