What you don&#39;t know can hurt you

Meetings & Conventions: What you don't know can hurt you - September 1998 Current Issue
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 Benini

G 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 ridiculous.

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 payment."

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.

2. Walkie-talkies
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," she says.

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 says.

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 items.

What you don't know can hurt you

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