Meetings & Conventions: What you don't know can hurt you
- September 1998
What you don't know can hurt you
"Don't ask, don't tell" might be your venue's policy when it
comes to hidden costs
By Carla BeniniG
regory Kurdian sees maraschino cherries in a
new light. No longer are they just complements to a Manhattan or a
whiskey sour. The president of Fort Lauderdale-based Sunbound, a
destination management company, now knows that at his next event,
they may cost him money.
His broadened outlook on drink garnishes is thanks to a venue in
Atlanta that pre-assessed a 50-cent per-person garnish fee --
whether or not attendees actually got a cherry, olive or orange
slice with their drinks. And the venue even charged two dollars per
person for glassware.
"My client was livid," says Kurdian. The charges were never
listed on proposals exchanged before the event; they only appeared
on the final catering contract. By then, says Kurdian, it was too
late to find another location.
According to planners, the garnish fee is indicative of the
unanticipated costs that can blow the budget of a meeting or event.
In some cases, items once automatically included are now considered
extras. Hidden costs aren't buried in any one area, either.
Planners have discovered them on bills for meeting room rental,
labor, food and beverage, room rates and audiovisual setup. Some of
the charges are just plain exorbitant; others are downright
Some planners chalk up these charges to a booming hotel market,
where the convention services manager has the upper hand. "Right
now, the hotel has control," says Linda Vest, CMP, meeting planner
for State Farm Insurance in Dallas. "And they admit that."
Terry McCaffrey agrees. As director of communications and
meetings for Sertoma International, a volunteer service
organization in Kansas City, Mo., she deals regularly with hotels
trying to beef up contracts that she signed five years ago. "I
actually had one hotel try to charge me 87 cents for each chair in
the meeting room," says McCaffrey.
The question is, can you avoid paying a charge that takes you by
surprise? That depends on the terms of agreement in a contract,
says Robert J. Proctor, principal at Proctor, Felton &
Chambers, a hospitality and real estate law firm in Atlanta. Most
contracts don't list every item of service and its cost, he says.
That doesn't mean the planner won't have to pay for them. "There's
probably nothing in a contract about long-distance phone charges,
but [planners] are legally obliged to pay for them," he says.
"You're liable for those services, even if you didn't agree on the
Catch a hidden charge before the meeting and you may be able to
negotiate. "If I see it on the banquet event order, I'll get it
waived," says Amy Powell, CMP, senior meeting planner for St.
Louis-based Ralston Purina Company, who has noticed a setup fee for
any meeting of fewer than 50 attendees. "If the function has
already happened, I can't get out of it."
What's the recourse on hidden charges? Proctor says planners
could simply refuse to pay the bill, though that may lead to time
in court. A judge, says Proctor, would look at the "usual and
customary" billing practices within the industry. However, that
still leaves plenty of gray areas. "Hotels are billing for things
like note pads and pencils," he says. "Customarily, one would
assume that those are included."
A planner's best defense is to be specific in the contract. "The
more attention to detail, the fewer surprises you're going to
have," says Proctor. For example, Kurdian tries to avoid unexpected
charges by addressing in his contract some hidden costs he's been
hit with in the past. He includes a clause that specifies his
company will not be responsible for frivolous costs, such as a
charge for the use of a stepladder. But it's difficult to cover all
your bases in a contract. These days, don't take anything for
granted. Just ask, "Are there any charges that we haven't yet
discussed?" The following may be among them.
1. Clean-up fees
On top of a 20 percent gratuity, Linda Vest has seen a charge for
tidying up meeting rooms. ÒThat should be included in the meeting
room cost,Ó says Vest. The charge, sometimes $200, is added when
the room has to be turned over for an evening event. To counter the
fee, she tries to negotiate a discount off meeting room rental.
Other planners have found hidden costs in the meeting room
rental price. Susan D'Ercole, CMP, president of Liaison
Professional Meeting Services, an independent planning firm in
Eustis, Fla., near Orlando, is now finding a 20 percent daily
service fee on her final tab. That's on top of setup and take-down
fees and gratuities for food service. "It may not be a big deal for
some planners, but I do 21-day training programs," says D'Ercole.
"If I'm paying $300 a day for a meeting room, that charge adds up."
She usually spots the fee on the banquet event order and gets the
CSM to waive it.
To keep everyone connected at a meeting, Bari Pollack, CMP,
typically rents walkie-talkies from an outside A/V company. But
recently, the director of conferences and special events for
Secaucus, N.J.-based Cahners Travel Group, which publishes M&C,
was encouraged by her host hotel to use its walkie-talkies (if she
didn't, she would incur a $100 charge to use the hotel's
transmitter connection). Pollack, who needed 10 walkie-talkies for
the five-day conference, was charged $25 per day for each. She was,
however, able to negotiate out of an additional $5 per day fee for
a backup battery. "That's the kind of thing you donÕt budget for,"
3. A/V plug-in fee
Debbie Mills, president of Debra S. Mills Meeting and Convention
Management in West Palm Beach, Fla., trusts her A/V needs to one
company. Now, sheÕs finding a line on her master account for patch
fees. The hotel is charging her $25 per meeting room per day to
allow an outside A/V company to use the hotelÕs sound system.
4. A/V labor
For a recent meeting, Judy Stern, conference manager for the
Michigan Association of CPAs in Farmington Hills, Mich., thought
the hotel's $10 hourly labor rate to set up A/V equipment was
reasonable. But the hotel changed its billing procedures between
the time of the contract signing and the meeting -- and never
notified Stern. Fees that were once hourly were now based on the
cost of the equipment. For each room, the hotel wanted to charge 18
percent of the total value of the equipment. "Needless to say I
disputed this," says Stern, who negotiated a 9 percent charge.
5. Extra electricity
Debbie Mills was preparing for a 20-person workshop for which each
attendee would need a computer. What she hadn't figured on was the
cost of electricity. "We signed the contract five years out," says
Mills. "I didn't see anything about extra electrical charges."
Mills learned the room only had enough amperage for three
computers. The price tag for extra amperage and labor? More than
$1,000. Luckily, Mills was able to cut the charges in half. She
wasn't happy to be paying labor charges, since she was bringing in
her own A/V technician. "They told me that there was some labor
involved in bringing in the extra electricity."
6. Pads and pens
Even necessities like paper and pens can be considered extras.
"I've had two hotels try to slide that [charge] through," says Dave
Klemish, a Milwaukee-based regional meeting and event planner for
Ameritech Corp., a telecommunications firm. He managed to get the
charge waived by one hotel; with the other, the CSM refused to
budge. "I told them that it would jeopardize future business," says
Klemish. "They said that that was unfortunate, but it's a charge
they will enforce."
7. Phone calls
"I'm still surprised at the cost of long- distance phone calls,"
says Barbara Griswold, director of meetings and special events for
Reader's Digest Association, Inc., in New York City. Griswold asks
up-front about fees for local calls and access to long-distance
carriers. She also advises participants to use phone cards. For
multiday or senior management meetings, Griswold may hook up her
own phone lines. The $50 to $75 installation fee from the local
phone company is cheaper than the bill she would run up with the
hotel, she says. And charges for outgoing calls may not be the only
phone-related costs. McCaffrey was recently told that it would cost
$75 per day to use three house phones. "That's ridiculous," she
8. Shipping and receiving
Shipping materials can be costly, but so can receiving them. Mills
has been charged $5 for each package received after the first 50
pounds. Mills also warns about getting hit up for vendors'
packages; vendors should incur the costs of receiving their own
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