Planners communicate the details of an upcoming meeting to
prospective suppliers in a request for proposal, in order to
solicit bids for the business. The details disclosed in the RFP
could determine whether you receive a fair proposal or any response
Suppliers generally are seeking business opportunities that will
deliver maximum profits, which gives them license to disregard a
piece of business if it is not financially interesting. Meeting
sponsors are seeking suppliers who will provide the most suitable
fit for the meeting, with cost-effectiveness being at or near the
top of the “suitable” list. To bridge the gap, prepare an RFP that
keeps all possibilities open.
VAGUENESS CAN PAY
Negotiation is a process executed in logical steps, not a one-time
exchange. It is important to reveal only the pertinent information
of the moment in order for the communication to continue.
Many planners put a desired room rate in their RFPs, and most
hoteliers look for that figure when evaluating the potential
business. But here are reasons not to disclose a rate range too
" Compare and contrast. Before rate becomes an
issue, consider how seriously the bidding hotel is assessing your
meeting. A quick response and a thorough, accurate proposal should
make you more interested in working with that property. Also, by
comparing the offers of similar properties in the area, you will
have a better idea of what you should be paying.
" What’s included? A higher rate doesn’t
necessarily reflect room rate alone. The quote might include full
breakfast buffet, complimentary shuttle to area attractions and the
airport, free local calls or free health club privileges. A rate
with these extras might work out to lower total costs when compared
with a hotel offering less expensive room rates and à la carte
charges for amenities. If you had specified a rate on your RFP, you
might have excluded the more expensive hotel before finding out the
" Moving money around. A hotel often is willing
to adjust its bid if creative modification can satisfy both sides.
Let’s say you need a hotel offering a room rate of no more than
$150, including taxes, per night. If you had listed a rate cap of
$150 in your RFP, then you likely would have excluded some very
suitable sites. In this case, a deluxe hotel might be willing, upon
subsequent discussion, to lower its rate from $190 to $150 because
both sides agreed to put the $40 difference into the meeting-room
charge, making the deal more appealing than one with a hotel that
came in under the $150 limit but is charging a high rental fee for
the meeting rooms.
" Push PR value. A hotel might decide to
negotiate the rate once it learns that, say, a prominent VIP will
be the featured speaker. The potential exposure the hotel would
receive from having the VIP’s stay on its résumé might be worth a
Share all revenue-generating information (number of room nights,
and number and size of meeting rooms required) in your RFP in
addition to the basics (dates, times, name of organization,
contacts, final decision date).
Note, however, that sharing revenue-generating details differs
from sharing your specific budget requirements (lodging rate range,
overall spending maximum).
At the same time, hotels must be honest with you, and the
decision to turn you away must be for business reasons. One way to
get at the truth is to provide a checklist to each prospective
hotel for noting why it rejected your business, e.g., the hotel is
sold out or the meeting space is filled.Learning why a meeting is
turned away can be helpful in future negotiations.Oren Jaffe, CMP, is senior conference manager
at Z-TECH Corp, a Northrop Grumman company in Rockvill, Md.