CMP SERIES CERTIFICATION MADE POSSIBLE
Smart Strategies The “use-by” date of hotel rooms and F&B makes meetings procurement “one of the most complex commodities to contract,” attorney Stephen Guth said. “Hotel rooms are like ripe fruit in the produce section at your grocery store — if a hotel room isn’t sold for a particular night, it’s gone rotten by the next day. The hotelier has forgone the revenue on that room forever and will never get that revenue back.
“Consequently, hoteliers want contractual assurances that shift financial risk to groups. The most obvious examples of that are liquidated damages for attrition or cancellation. On the other hand, groups want to limit their financial risk. It’s a classic negotiating conflict of competing objectives.”
Experienced meeting buyers understand this revenue model and are able to use it to their advantage. Even as the industry heads back into a seller’s market, buyers are increasingly savvy about how to get the most bang for their buck, according to hospitality industry lawyer Greg Duff. Some pointers:
› Virtual friends can turn into real savings, said the American Hardware Manufacturers Association’s Cookie Walner. “I use my LinkedIn community and Facebook friends,” she said. “Their insight and suggestions are beneficial. I also search past issues of Convene from the PCMA website.”
› Arm yourself with market research.
“Especially when it comes to the increase in room rates year to year — projected and actual,” Walner said. “I watch for reports on trends in target areas.”
› Focus on upgrades and amenities such as waived resort fees and parking discounts, instead of those areas over which hotels have little control. Audiovisual services (which are often subcontracted to a third party) and food and beverage (which already operates on low profit margins) are typically areas that are dificult to discount, Duff said.
› Flexibility is key. If your organization can consider more than one location or date for its event, hotels and other vendors can give you optimal pricing, Duff said. Guth added: “The single best way to maximize cost savings is to get leads for your meeting well in advance and be willing to consider more than one location or date for your meeting. Once your stakeholder has fallen in love with a hotel and has to have the meeting at that hotel on a particular date — and the hotel figures that out — you’re no longer negotiating. You’re begging.”
In addition to flexibility on dates and location, be open to hotel brands you may not have used in the past, Walner said. And cities with multiple convention centers, such as Chicago, Atlanta, and Boston, may provide additional options.
› Develop your own contract templates, Duff said. Buyers often negotiate a discount on services, but then sign a standard hotel contract that exposes their group to liabilities and penalties that dwarf whatever negligible discounts they achieved on rates. “I’ve heard some groups say that the size of their business doesn’t support using their own contract,” Duff said. “I don’t agree. If you plan in advance and the hotel knows that using your contract template is an important part of winning your business, the hotel will use your template.”
› Enter negotiations with a “wish list” of freebies, discounts, and upgrades that would be most valuable to your organization. High- level events may appreciate room upgrades, regional meetings may like free parking, and almost all attendees are looking for free Wi-Fi.
“Everyone has a laundry list of nice-to-have’s,” said Amy Allen, director of marketing for Caesars Entertainment. “But no supplier in the world can give you every single one of those things and have it be a mutually beneficial transaction. So be honest with your suppliers about which things are really important to you, and they’ll make it happen. Our vice president of sales, Jordan Clark, has a great saying that really applies here: ‘We can’t do everything, but we can do anything.’”
business to put more sales managers in local markets to build personal relationships with customers. Long-term partnerships can make a big difference to your
bottom line, Ryan said. “Relationships are still the name of the game,” she said. “The senior people in this industry need to teach the younger generation on how valuable these relationships are. I’ve had situations in which planners were going to run into an attrition penalty and the relationship and history with the hotel was taken into consideration when negotiating what the penalty was going to be.” CVB websites are ideal for gathering information about
what is going on in the city over preferred meeting dates, said Cookie Walner, CMP, CMM, CAE, manager of events for the American Hardware Manufacturers Association. She finds the websites a powerful tool to find open availability for more flexible rates, and advises meeting organizers to try to
80 PCMA CONVENE SEPTEMBER 2012
fit smaller events around posted citywide meeting move-in, move-out dates. “It’s no secret,” Walner said. “Involve CVB representatives and national hotel sales [staff] from the very beginning. They are valuable partners during the negotia- tion process.” At the end of the day, both sides of the negotiating table
want a good experience for attendees and a successful event. Keeping that in mind is the best approach to negotiations. “I know some planners that are really ruthless in their negotia- tions. I think you can still get the same result by having hon- est conversations,” Pelletier said. “Everybody wants to win.”
Corrie Dosh is a freelance writer based in Brooklyn. .
PCMA.ORG
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