In every area of event management, we are boldly navigating new territory. Every day seems to bring new challenges, including how we work with hotels.
The unique circumstances we now operate under have created interesting twists and turns. For example, leisure travel is faring somewhat better than business travel, and some hotels have responded by realigning their business models. Unfortunately, this phenomenon can wreak havoc on group sleeping room rates, shake up the ratio of sleeping room to meeting space availability, and basically weaken -- if not nullify -- many of our more traditional negotiation tactics. For instance, guaranteeing the lowest published room rates and/or getting complimentary meeting space is becoming increasingly difficult.
Below are some new rules for negotiating with properties, including pointers that can help you survive the recession and beyond.
Think big picture
While planners have taken advantage of buyer's markets over the years, some might have shown poor judgment by asking for too much when the market was in their favor, and ended up alienating their hotel partners. Planners who are experiencing a buyer's market for the first time might think an aggressive approach will make them look good to their superiors, but it is difficult to build partnerships with suppliers based on that shortsighted tactic.
When the tide turns and it becomes a seller's market again, your hotel partners will clearly remember (even if your sales team has moved to new properties) who beat them up to get the lowest prices and most concessions. Long-term relationships always provide the best return. You will need favors down the road -- for example, last-minute upgrades or extra rooms -- and you don't want to negotiate these savings away by being unduly aggressive now. Showing an intelligent understanding of the market, as well as some sincere empathy, is the best investment you can make in your future business dealings. You can get outstanding value for your future programs, as long as you acknowledge that both you and your hotel partners need to generate revenue and contain costs.
In a well-negotiated hotel contract, overall risk is shared by both parties. In the current economy, it is wiser to negotiate down overall risk for your company or client rather than asking for the best overall pricing. For example, request reduced attrition, rather than bare-bones room rates. Of course, you should still aim to ensure you have the lowest guaranteed published rates or you could undermine your room block, as attendees will book by other means or jump to properties with better rates. Similarly, negotiating later final payment terms for your firm might be more valuable right now than asking for lower deposit amounts.
Use timely tactics
Work with billing early. Traditionally, disputes or discrepancies over bills are settled between planners and hotels at the end of the event. A better idea is to work with the hotel's billing department well in advance of the event to set up and preapprove billing codes; it will make reconciling the bill much easier.
Be the communicator. Don't expect the property to handle all the basic communication to your group about the agenda, payment terms, travel policy, etc. Communicate such details directly to your attendees well in advance of the program.
Show your appreciation. You probably don't have much of a gratuity budget right now. In lieu of cash gratuities, make one modest but meaningful donation in the property's name to a charity with which the hotel has an affiliation.