Everything impacts the bottom line. Read that again: Everything impacts the bottom line. In every discussion with colleagues we hear frustration expressed about “hidden charges” from hotels, venue and vendors.
Remember, everything impacts the bottom line — whether you thought of it or not. So here are 10 questions you should be asking. Will you be giving vendors or facilities ideas by asking them? You might, but the better your questions are, the more information you’ll get, and your business relationships will be better, with fewer or no surprises.
Ownership, brand and management. Hotel owners are far more demanding about profit than they’ve ever been. Knowing who owns the business, whose name is on the door, and who manages the company gives you clues to how the profit pie is split. It also will tell you more about their economic health. You can follow the various entities by using Google alerts to see what may be news with the company. Worst case: If there is a dispute, you’ll know how many separate parties you’ll meet in the legal proceedings.
Meeting rooms. Everyone says they won’t pay for meeting room rental. That may not be realistic in today’s economy. Consider the costs to operate a venue: power, labor, cleaning, furnishing. Better to ask about cost upfront than be hit with a huge bill at the end.
Power. It’s not free. Hotels are adding charges for use of electrical outlets in meeting rooms regardless of who or what plugs in. Consider the amount of power a meeting might use: HVAC, A/V, individual devices plugged in to any available outlet and utilities used throughout a facility. Ask if there is a charge for any use of electrical outlets in meeting rooms. Again, it’s better to know upfront.
Upgrades, comps, concessions. There is a real cost to any facility or vendor for concessions (discounts on equipment, services, labor) and for upgrades to, or complimentary use of, premium rooms. Take nothing for granted regardless of deals negotiated before. Discuss the real cost and what is best for your group and your business partner.
“Plus Plus Plus” for labor, taxes, and administrative charges. It used to be “++” -plus tax and plus gratuity. Now it’s usually “+++” and the pluses of service (not gratuity), and administrative charges are taxed in most venues. Factor in all the “pluses” (including tax) to any pricing and determine the impact. Watch industry and business journal websites for tax increases. Even if these are not negotiable, you can budget more accurately.
Markup. DMCs may charge a markup on venues and labor they subcontract. Hotels may mark up charges for extra equipment (tablecloths, chairs, specific décor). This isn’t bad, it just is, and you want to ask if they do. And ask if those fees are negotiable, and why or why not.
Food. We don’t need the Food Price Index to tell us how much the cost of food has increased. We can see the impact of drought and floods, labor shortages and all sorts of costs to get food to the facilities we use. But are these prices negotiable? Maybe. Unlike guest rooms, there may be far less wiggle room for venues in negotiating food prices. Acknowledging that upfront to a hotel, conference center, convention center, restaurant or caterer makes you a smarter negotiator and budgeter.
Beverages. When planners say they are “just serving water” so there should be no additional cost, I wonder if labor and equipment costs are factored in. Water itself has a cost, and it’ll become more expensive as it becomes more scarce. As for sodas, alcohol, juices and other beverages, consider the same issues you do with food. Ask for more information and see if there is room to negotiate. (And even if your organization thinks it can’t afford it, have plenty of water stations. Dehydrated meeting participants will cost you more.)
Audio-visual equipment. We are used to seeing a charge for patching into a house sound system if we don’t use the in-house A/V company. You may not know that there can be extra charges for bringing in your own (or another company’s) equipment; plugging equipment into the electrical outlets (see No. 3); obtaining power strips, screens, carts with draping; and labor and equipment from the in-house company, if needed in an emergency. You also may need to rent a meeting room (see No. 2) for securely storing outside equipment. Find out what negotiating power you have with the A/V company before you finalize your contracts.
Write a thorough RFP, read the proposal and take time with the contract. This is my best budgeting tip. Too often the process is rushed (because it has to be, because we wait too long or because it’s quarter- or year-end for the salesperson) and we lose by not asking the best questions and contracting for exactly what we are buying and our business partners are selling. Being deliberate will, short-term and long, save much money.
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