July 01, 1999
Meetings & Conventions: Planner's Portfolio July 1999 Current Issue
July 1999 lawandplan.gifPLANNER'S PORTFOLIO:

The Law & the Planner

By Jonathan T. Howe, Esq.


Identify what you need; anticipate what they want

Q: What areas of the typical group sales contract are negotiable?

William R. Lemaster
Trade Show Manager
Syntron Bioresearch
Carlsbad, Calif.

A: The title of world-renowned negotiator Herb Cohen's book, You Can Negotiate Anything, pretty much sums it up. Nonetheless, you do not want to haggle over every detail. The key here is knowing what will make the most beneficial difference for the group.

Planners should determine the most important things that must be provided and look at those as the key elements in the negotiating process. I suggest a negotiation format that identifies the planner's needs and wants, as well as interests that might make the meeting even more successful than expected. Planners then should anticipate the property's needs, wants and interests.

If the basic fundamentals in the "needs" column cannot be met, there is no sense in going forward with negotiations. These fundamentals would be dates, rates, room block and perhaps some other issues unique to the event. Also, some basics that should be in every contract are agreed-upon approaches to attrition, cancellation, indemnification, duties under various laws (such as the American With Disabilities Act) and best rate available.

A current watchword in the hotel industry is "revpar," which is short for "revenue per available room." In days gone by, the important thing in negotiating was to recognize the room rate would drive the value of the meeting. Now, the value of the meeting is viewed in terms of the property as a whole. This includes revenue not only from those events that are sponsored by the meeting organizer, but also revenue from attendees' peripheral spending, on room service, in the bar, at the gift shop and on greens fees, for example. In other words, "revpar" is determined by how much money will drop to the bottom line as a result of this group being on property, not just those revenues generated by the meeting sponsor.

To establish clout in negotiations, it is essential for planners to have complete histories of all their meetings. The property is the main source for much of the data, so contracts should require the hotel to provide this information in the post-meeting reporting process.

Attach to the contract a form to be completed by the hotel before the master account is finalized and paid. Included on this form should be the following information.

  • Total room nights used
  • Average room rate for occupied rooms and revenue received
  • Total food and beverage charges and a breakdown of breakouts, meals, hospitality suites, etc.
  • Room service charges
  • Food and beverage charges from dining rooms, lounges, gift shop, etc.
  • Valet services including laundry and dry-cleaning
  • Valet parking and parking charges
  • Business center charges
  • Telephone charges
  • Any early departure fees
  • Guest rooms used before and after the meeting
  • Meeting room charges
  • In-house A/V and other captive-services costs
  • Attrition fees for rooms, and food and beverage
  • Room block adjustments
  • Percentage of available rooms used by the group
  • Any other revenue generated by the meeting
    By the way, "win-win" situations do not exist. In contract negotiations, what you want is a partnership, where both parties share in risk and reward.
  • Jonathan T. Howe, Esq., is a senior partner in the Chicago and Washington, D.C., law firm of Howe & Hutton, Ltd., which specializes in meetings, travel and hospitality law.

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