Why Aren't SIAM Conferences Cheaper?January 1, 2005
Ilse Ipsen, SIAM's vice president for programs, makes a point of attending as many SIAM conferences as she can. Here, she responds to questions she's frequently asked about the cost of rooms at SIAM conference hotels.
Why is the conference hotel so expensive? Why is the SIAM conference rate higher than the rates offered at, say, hotels.com or Orbitz?
In general, a SIAM conference takes place in a single "conference hotel." A contract with the conference hotel is signed two years prior to the conference, if not earlier. Arrangements are made so far in advance to make sure we get a good location and facilities at the best possible price.
In addition to the room rate negotiated for a SIAM conference, the contract guarantees SIAM the use of meeting rooms, registration space, Internet cafe space, and reception areas. This is a large portion of the hotel's public space, and it is reserved for SIAM. In return, SIAM guarantees that a specified number of room-nights will be filled by conference participants at the specified price (this is called a "room-block").
If too few of us stay at the conference hotel---if, say, the number of booked room-nights falls below a specified percentage (usually 80%) of what was promised in the contract---SIAM will have to pay "attrition" damages. The amount can be substantial, as high as $50,000-$100,000 for large SIAM conferences and about $10,000-$15,000 for smaller conferences. To cover these costs, SIAM would have to increase registration fees for future conferences.
Sleeping rooms are the primary source of revenue for a hotel. When SIAM negotiates a contract, the hotel checks room bookings at past SIAM conferences (like a merchant who requests a credit report to check your credit worthiness). If SIAM acquired a reputation for attrition (failure to occupy the agreed upon number of sleeping rooms), hotels could respond by refusing to host our conferences or by charging us higher rates. As a result, finding affordable conference hotels in attractive locations would become even more difficult.
The problem of attrition is widespread. The American Association of Pediatric Dentistry, the American Concrete Institute, and the American Society of Neuroradiology, to name just a few, have faced the same problem. ASNR now requires prepayments for rooms and charges cancellation fees for no-shows and early departures, to cope with the rising costs of attrition. Other associations limit participation in the social events of a conference to those who stay at the conference hotel. SIAM does not want to penalize those who cannot afford to stay at the conference hotel. We feel that it is important to network with each other; we need the social events to connect with old friends and meet new colleagues.
Why doesn't SIAM use cheaper hotels?
Cheaper hotels are normally smaller and often do not have the staff or the meeting space necessary for a typical SIAM conference (e.g., a general session room and six concurrent session rooms, space for coffee breaks, and an Internet cafe).
Why not reserve a smaller room-block at the conference hotel, and promote cheaper alternative hotels?
Because a SIAM conference occupies most of the meeting rooms in the conference hotel, the hotel cannot sell its remaining sleeping rooms to another group holding a meeting or convention. The sleeping rooms not occupied by SIAM can be sold only to business or leisure travelers, which is much harder for the hotel. This is one explanation for room rates that seem high in conference hotels. No hotel would sign a contract for a small room-block while allocating a large part of its meeting space to SIAM, unless SIAM agreed to pay for the meeting space. For such "space-heavy" meetings, hotels charge for the meeting space: up to $100,000 for large SIAM conferences and $15,000 for small ones. Again, SIAM would have to increase registration fees to cover these costs.
What if I reserve a room at the conference hotel and then cancel the reservation or decide to leave early?
The hotel will remove this room from the SIAM room-block and sell it to anyone who wants it. This means that a late conference registrant may not be able to get a room at the conference rate or, in some cases, may not be able to get a room in the hotel at all.
SIAM staff work hard on our behalf to negotiate affordable hotel room rates, often below AAA or government rates. Moreover, prior to a conference, SIAM staff review projected attendance and renegotiate the room-block if attendance appears to be lower than expected. During and after the conference, they check the hotel's room lists to make sure that all conference participants staying in the hotel are indeed included in SIAM's room-block.
Are there other options?
Yes. One option is to hold SIAM conferences at universities. Because of classes, however, universities have restricted availability. Moreover, conference sessions may have to take place in physically distant locations. From experience with several SIAM linear algebra conferences held at universities, we know that it is not always easy to negotiate with universities and that they are sometimes not as affordable as we might expect.
Another option is to hold large SIAM conferences at convention centers, and not to reserve hotel rooms. In this case, SIAM would have to pay for the meeting space. The cost for the convention center would be included in the registration fee.
Ipsen encourages readers who would prefer any of the options presented here, or who have other suggestions, to contact her (firstname.lastname@example.org). She looks forward to hearing from you.