The question that sparked this series – “What’s the most outrageous thing a venue has ever attempted to bill you for?” — was obviously loaded; I knew that when I posted it to several LinkedIn groups. My intention in asking it was to give planners and event producers an opportunity to vent their frustrations, which they did — by the hundreds and primarily at venues. But, to be fair, a lot of fees meeting planners and event producers incur may not be the venue or service provider’s fault. Which is why I wanted to explore the supplier’s perspective in this part of our three-part series.
What has become glaringly obvious is that there is often a major disconnect between what the buyer’s needs and objectives are and what the supplier is able to provide to meet those needs. Unfortunately, this can lead to a relationship that borders on or even becomes adversarial and can create serious issues when it comes time to pay the bill.
As buyers of services, it is the planner’s job to clearly communicate group needs and research all of the prospective venue’s offerings, pricing and fees, before signing on the dotted line. Don’t assume that everything is spelled out in the contract. “Many of our services are not outlined in the contract because it would make it unwieldy, and it’s quite impossible to anticipate all of the possible needs for all of the many and varied types of events we do,” explains Alex Blatt, event manager at the Century Center in South Bend, Ind. “Due diligence [by the planner] would require a thorough reading of the contract and the policies and procedures of the building, and [having] a discussion with the sales representative about the program, asking specifically what other service charges might apply to such an event.”
Steve Lowe, director of sales and marketing for Harrah’s Lake Tahoe [Nev.], believes that the key to negotiating effectively and fairly lies in defining the planner/supplier relationship at the outset. “I think in our industry, unfortunately, we’ve been so impatient to get ‘dates, rates and space’ that we’ve forgotten about the reality of how we’re going to deal with each other,” he says. “From my point of view … the relationship is [based on] trust, comfort and recognition. So how do you get there? [Our sales teams] have to develop and use good listening skills. We’re so busy regurgitating our brochures, we forget to say, ‘Tell me about your program and your budgets. How can we help you with your budgets?’ Building trust and a comfort level, recognizing the needs of the planner’s program and defining the relationship by listening … that’s where it starts.”
Similarly, many planners lose sight of ways in which they may be alienating venue sales people, to their group’s disadvantage. For example, by failing to reveal program details or budgets to the venue or by not understanding what’s most important to their group, planners make it very difficult for venues and other supplier/partners to help them meet their objectives or stay under budget. Richard Boothroyd, director of special projects at GALLO, believes some of that reluctance to share expectations, restrictions and needs may be due to a lack of experience. “The barriers to entry into the event design and production business are so low, entirely too many unqualified folks are presenting themselves as event planner/producers, despite having little experience and fewer relationships with facility management and contractors,” he says. “This is a major problem.”
Another complicating factor is the impact the soft economy has had on the meetings industry. Venues have been grappling with escalating costs and dramatically reduced revenues, while planners are dealing with budgets that are a fraction of what they used to be. Even though planners are now in the driver’s seat, they still may not be able to get everything they want. Former convention center facility manager Bob Cherny, of Paradise Show and Design, feels that planners need to understand some of the economic realities venues are facing before they try and play hardball. “It has been a few years since I had access to the numbers, but … there is not a single major convention center in the world that turns a profit from its operations,” he says. “They are supported by hotel room, rental car and general revenue taxes. Hotels get hit twice. They have the expenses of operating the meeting spaces, and they pay room taxes. While I can’t speak to either graft or corruption, facility managers are in increasingly tight places these days. While it does not make [planners’] lives any easier or less expensive, they should know the truth of the environment in which they work.”
The truth is, buyers have to take some responsibility for the situation, be realistic with their expectations and forthcoming about their needs and budgets. They need to educate themselves and do their homework, or hire people to do the necessary research and negotiate on their behalf. And they need to realize that taking an adversarial stance during negotiations will only sabotage budding relationships that could pay off for them when it’s no longer a buyer’s market. On the other side, as Steve Lowe points out, suppliers have to take better care of their clients, adapt to their needs and come to terms with the competitive nature of this marketplace. Otherwise, they face the consequences of seeing even lower occupancy rates and rev par.
And both sides need to realize when it’s time to say “no” and walk away. Not every piece of business is going to be good for a venue, just as not every situation is going to work for a planner’s group. So in Part III of this series, we’ll take a look at some simple things planners can do to avoid getting slapped with fees or ending up in bad situations. Until then, remember: Knowledge equals leverage, and relationships are key.