How often have you walked away from a contract negotiation feeling positive, happy with the deal you struck and like you got the very best deal for your money? Is negotiating hotel contracts one of your least favorite parts of your job? I think very few meeting planners feel comfortable with this aspect, and I believe the main reason is we don’t get as much training in this area as the salesperson sitting on the other side of the table from us does. How many of us attend contract negotiation sales courses or have a contract attorney on our side, reviewing what we are signing and keeping us from making a mistake that will cost our company money like our hotel counterparts do?
Meeting planners are at a disadvantage from the beginning when we come to the negotiating table, so we need to take advantage of every opportunity we can to strengthen our negotiating skills. I try to sit in on at least one contract negotiation session at every industry conference I attend, and when reviewing the monthly industry journals, I make time to at least skim contract negotiation articles and make note of any new tips. The Internet has a wealth of articles and copies of presentations you can review to help bring you up to speed. I also like to pose questions to industry groups like the Meeting Industry Forum, which is a Google group, or one of the Linked In groups for meeting planners to get feedback from both planners and suppliers on tricky contract issues.
The key to successful contract negotiations is to start with a detailed RFP that clearly outlines all your group’s needs and gives the property a good overview of your group and their hot button issues. This helps set the salesperson’s expectation of what you will be like to work with, so keep it professional. Check out this column I wrote on RFPs for more tips about crafting strong RFPs.
I like to be very honest and upfront in my RFPs; I don’t believe in hiding anything from the hotel. I have found that it actually works to my advantage to put all my concession requests and special needs in it, because if the hotel wants my piece of business, they will frequently grant all the concession requests in their initial proposal. The benefit of this is that it’s one less “ask” on my part. This comes in handy as we get further into the negotiation process, because whenever one party has to ask the other for a concession, the granting party usually expects a concession back in exchange. By putting everything I know about at the time of the bid process into the RFP, I start from a position of power.
I’m a big believer in creating partnerships with the sales managers I do business with and, whenever possible, I like to go back to them for my future meetings. Once a sales manager has earned my trust and delivered on their promises to me, that relationship is very valuable and one I’m not willing to risk by trying to force concessions or unrealistic demands on the property.
If you are working with a new property or a new sales manager, take the time to get to know their property and their needs, so you can use that knowledge to your advantage. For example, if you know that this hotel’s base is primarily corporate travelers and your group is a weekend group, then you can expect significant rate reductions and concessions for your piece of business. To gain more leverage, make some small adjustments to your meeting in the hotel’s favor. For instance, if you know that your sales manager is on track to meet a sales goal if they sign your piece of business before a certain date, then you can ask if they can offer any additional incentives for signing by that deadline. By helping them to meet their own goal, you may win additional concessions for your group.
Make sure you know the true value of your business. It’s much more than the revenue generated by sleeping rooms and banqueting. Your attendees spend money in multiple outlets in the hotel: at the spa, on the golf course, in the bar, on Internet fees and movie rentals, laundry services, room service, restaurant meals and in the coffee shop, etc. The easiest way to get this information about your group is to ask the previous host hotel to give you a post-con report that tracks all your attendees’ room charges grouped by revenue center. This information will help you understand and communicate the true value of your business to other potential hosts. Once a hotel recognizes the value of your business, it will be more willing to negotiate a contract in your favor.
Your professional reputation depends on how you conduct business. My personal integrity is very important to me, and if integrity is important to you, be careful of playing “hardball” during negotiations. I find too often that planners make the mistake of forcing an extremely low rate or outrageous conditions on a hotel. They may be happy in the short-term, but it ends up negatively affecting their attendees and hotel relationships. You should expect to pay for quality and good service. I started my career in hotel sales and catering, and I know from first-hand experience that when a sales manager negotiates a deal that is negative for the hotel, the employees the attendees will deal with know about it. That influences the way they interact with your guests. So that sweet deal for yourself ends up creating a sour experience for your attendees. And that circumstance creates a no-win situation for everyone.