Location, price, attrition clauses, food and beverage minimums, concessions, cancellation clauses, and more — the maze of evaluating and negotiating with hotels can lead down a rocky path, many times reaching several dead ends. However, understanding some basic points can guide the event owner or organizer down the correct path ensuring the best deal for the money is achieved. Negotiation Bundling Identification and negotiation with the host city or venue and the host hotel is best achieved when handled simultaneously. Once an event owner or organizer is locked into a binding contract with the host city or venue, the negotiation power with the host hotel will be diminished, especially with the hotels closest to the venue. Therefore, tie in the success of the negotiations with the hotel to the decision to bring the event to the city or venue. Many times, the city or venue will offer to provide subsidies as it relates to the hotel to ensure the event comes to the particular city or venue. In addition, have a Plan B ready in case negotiations do break down. It is always best to have options available. Homework Pays Off During the evaluation process, it is best to be as thorough and exact as possible. The first consideration when evaluating A host property will always be location. It will be the attendees’ primary preference to stay as close to the host venue as possible. This provides the flexibility of walking versus the added expense of a rental vehicle and venue parking charges if applicable. It also provides easy back and forth access to multiple day events. However, just because a property is closest to the venue does not mean it is necessarily a shoo-in. Pricing, room types available, and concessions all go into the evaluation process. By building history, a sports event owner or organizer will know the price point in which the attendees are willing or able to pay. With today’s economic challenges, attendees are willing to stay further from the venue if all other things are equal and the other option(s) provide significant savings even with transportation and parking included. The hotel room configuration will be the other evaluation factor. Because of economic factors, more and more sports groups will double the sports event with the annual family vacation. Therefore, families of four to five members will be utilizing one room. Also, more group clubs and teams are putting multiple members in one room to save on costs. Therefore, double/double rooms are becoming a premium item. It is our experience that single rooms are becoming harder and harder to sell. Thus, single rooms are becoming 10 percent or less of the overall room Block. Experience tells us that corporate hotels will try to compensate for the lack of single rooms by offering single rooms with roll-away beds. This option is least desirable. Once the research has been done, an actual physical inspection of the option host hotels is best. In the long run, the cost and time associated with an actual sight inspection will be worth the effort. This will allow the event owner or organizer to actually walk the distance between the hotel and venue. Also, it will allow the opportunity to meet face to face with the people who will be doing the negotiations for the property. The majority of the time, the hotel(s) will provide a complimentary room to let the event owner or organizer experience their property firsthand. On the sight inspection, bring along a wish list that includes pricing issues and concessions to give to the property. This will let the property know where the next phase, negotiations, will start. Let the Fun Begin It is best to go ahead and lay it all on the line in the beginning. This includes the price that is best suited to fit the group, concessions and perks requested, room and room type flow, food and beverage requirements, meeting space requirements, and any other information that may be unique to the event. Have a standard set of concessions that can be added to as time goes by. This list should include but is not inclusive of the following: • Attrition Issues • Complimentary Rooms • Complimentary Meeting Space • Minimums on Food and Beverage • Staff Rates • Free or Reduced Charges on Internet Service • Free or Reduced Parking Charges • Free Shipping • Commissions/Rebates • Online Booking Capability. Predetermined which items are negotiable and which ones are not. Sometimes it takes compromising on one concession to get another concession that may be more important to the group. Just know going into the negotiations that the more room nights and food and beverage that the hotel will receive, the more they Will be willing to concede. If meetings and functions are part of the event, consider having them on property instead of off property. First, transportation will not be an issue. Second, the revenue that was going to be spent anyway could be used as a negotiating tool to drive the rate down on room nights or getting the property to agree to the concession requests. History Counts If the event is an annual event, come in with solid historic daily numbers. This will go a long way in negotiating attrition and food and beverage minimums. Do not panic if the property starts with 100 percent attrition. Know that this point is always negotiable. If persistent, hotels many times will be willing to drastically reduce or even eliminate attrition if history shows that the block consistently picks up contracted blocks. Be wary of months in advance cut off dates in lieu of attrition. Normally, sporting events entail a qualification process that hinders this type of cut off. However, also know that the hotel will call and verify numbers so always be upfront and honest. It is always helpful to partner up with a hotel brand. Becoming national account status will not have the hotel chain corporate office on your side; historical numbers will always be readily available. Free is Good The next concession items are issues that are budget relieving. Let the hotel know up front if a rebate per room night is requested. Many properties will want to put in a clause letting the attendees know that a rebate is part of the rebate. Ask to have the clause omitted. This normally is not a problem. With a good size block, negotiate a 1 for 35 complimentary room policy versus the normal 1 for 50 policy. Ensure the complimentary policy is on an accumulative basis and not on a per-night basis. This will be budget relieving for rooms that the local organizing committee is responsible for. Hotels will normally provide staff rates that are free of rebates for staff-member rooms. Also, if food and beverage functions are being given to the hotel, ask for complimentary meeting and event space. The revenue will more than be made up for in the food and beverage cost. Trust but Verify Once the fun ends and all issues have been agreed upon, the hotel will work up all language in a contract. Read in agonizing detail every iota of the contract and ensure that what was agreed upon is what is actually in the contract. Once the contract is signed, it is very hard to go back and change. Have other people read and ensure all issues are covered. Ensure that a provision is included in the contract in case the hotel cannot come up with the correct number and type of rooms. If, after the fact, a change is mutually agreed upon, ensure an addendum is drawn up and added to the contract. Never depend on verbal agreement.
Published by Due North Consulting, Inc.. View All Articles.
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