Effective Hotel Negotiating Means Doing Things Early

Many inexperienced individuals, when dealing with hotels and their banquet/ food and beverage department, falsely believe that there is no urgency to agreeing to terms. In the last three decades, I've witnessed how costly this can be. I have observed these individuals request information, and fail to assure that their request was followed through on in a timely manner. I have witnessed these individuals adopt the attitude that they had a terrific relationship with the Event Manager assigned to them, only to end up either being disappointed by that individual, or even more often, that individual "moving on" from their position. Many positions in hotel's food and beverage and event management departments are often transitional, and the reason that so many of these individuals are so young and energetic when you meet them, is that they are "auditioning" and getting experience for a better opportunity. While this is often the nature of the industry, and you have no control over that aspect, experienced negotiators realize the importance of negotiating thoroughly, getting the best deal possible on a "win-win" basis, and never assuming anything. Everything must be in writing, and you need to save all correspondence, both written as well as digital/ electronic. It is therefore essential that you review all confirmations and commitments carefully and thoroughly, and make sure that the terms, etc., are all "crystal clear" to anyone looking at the correspondence.

Failure to do the above steps puts an organization holding in event at the "mercy" of the hotel - - never a smart position to be placed in. I have often "cringed" while listening to inexperienced, naive individuals say that they didn't need that, or that they feared it might offend, as their explanation of why they didn't follow the proper and effective protocol. Unfortunately, because of the fact that so many of an organization's leaders are inadequately trained, they "innocently" make extremely costly errors in judgment. These individuals should come to realize that it is often difficult enough to get everything you expect from a hotel, even if you take every precaution, and that if you don't, the results are often far less than ideal. These individuals should realize that hotels are businesses, and while they will honor the terms of their contracts (in almost all cases), failure to "lock things up" properly, getting the "I's" dotted and the "T's" crossed, can give the hotel an undesirable advantage.

It is also important to lock up details of a future event, especially in times when the hotel industry is experiencing less than "ideal" circumstances. Negotiators have to realize that the Food and Beverage division of a hotel traditionally experiences the second greatest profitability for the property (the bar is first, of course), and thus, an experienced negotiator can discuss various methods that might be used to reduce the hotels costs without negatively impacting event quality, and thus give the hotel some "wiggle room" to offer better pricing. It is important to realize that most things regarding food and beverage are often "flexible" and "negotiable," and if approached with a win- win, non-adversarial negotiating style, an experienced negotiator can secure "more bang for the buck."

I urge organizations and their leaders to avoid what appears to often be their natural tendencies to procrastinate and delay. Doing so can be a financially costly behavior!

Making A Hotel Group Booking?

In the last three decades, I have observed countless organizations that cost themselves, financially as well as in time and energy, by arranging groups with hotels in an amateurish, rather than professional manner. Organizations that have set up a professionally designed approach have better fulfilled the needs of the group, the organization, and the attendees to the meeting, event or conference. Organizations should set up a procedure for contacting hotels with their group that they use whenever they shall be using twenty or more rooms per night. This is even more true when the meeting will also include Food and Beverage requirements. The following are some of the steps that should always be included:

(1) It is essential for the group organizer or coordinator to fully understand the group's needs. There must be a realistic estimate of guest rooms required, as well as any meeting rooms, food and beverage, etc.

(2) The group organizer must prepare a detailed budget, and must fully understand all costs involved. These costs include any needed complimentary rooms, guest room rates including all taxes, service charges and fees, meeting room rental (if applicable). and food and beverage expense (including taxes and mandatory service charges).

(3) A professionally prepared, detailed RFP (Request for Proposal) must be utilized, and must be sent simultaneously to multiple properties that might meet your needs. In the RFP, all needed hotel concessions, group rates offered, food and beverage concerns, and special needs and requests must be requested. The RFP should be accompanied by a cover letter with a brief overview of the organization and the history of this event, if any. In this cover letter, each hotel should be informed that the RFP is being submitted to multiple hotel properties, for competitive bid? The letter should also clearly list a cutoff date for return of the RFP for review. Today, much of the Request for Proposal procedure has been dramatically simplified, as many properties offer online requests.

(4) Much has to do with who is footing the bill for this meeting. Is the full cost being underwritten by the organization? Is the full cost being underwritten by attendees? Are the costs being shared in some manner?

(5) From a budgetary standpoint, is the intent to make money on the event?

(6) If the guest rooms are being paid for by attendees, what is the point where price becomes a major factor, in terms of attracting attendance?

(7) How does the organization pay for the master billing? Is there a need to establish credit? If there is, the organization should be prepared to submit a minimum of three references to establish the needed credit, and these references must be hotel properties that the organization has previously established credit with.

(8) What are the full costs that the organization will incur, per attendee, as well as in total? Is this cost justified in terms of the value of the event?

(9) A procedure must be in place prior to receiving the proposals back. This procedure must be how the proposals will be reviewed, by whom, what checklists to use.

(10) The organization must create a set of internal priorities, so that the competitive proposals can be compared, reviewed and evaluated. Are there any particular issues that might be "deal breakers?"

These ten items are not nearly all the factors that come into consideration in securing a group booking that will be optimum. However, they are a good beginning, and organizations that do not follow a procedure similar to the above, generally either overpay, don't get what's needed, sign a bad contract, etc. In today's competitive market, organizations should carefully review clauses regarding attrition, guarantees, givebacks, etc. Organizations need to have a thorough understanding of factors that impact their group bookings process, including optimizing hotel negotiations, food and beverage negotiations, needed hotel concessions, and letting several hotels compete for your business. If an organization utilizes the steps listed above, in addition to having an understanding of these other relevant issues just mentioned, the organization will get far more "bang for their buck."

The Art&Science of Hotel Negotiations

All too often, organizations and corporations end up paying far more than they need to because they do not follow the basic rules of hotel negotiations:
(1) Always use a comprehensive Request for Proposal (RFP). This RFP should include ALL anticipated needs of the group, including approximate number of guest rooms, meeting room utilization, Food & Beverage requirements and budget, Audio Visual needs, complimentary needs, etc.
(2) Send the RFP to numerous hotels in area that might be able to meet your needs. Let the hotels know that you have done this. (Competition is good for you)
(3) Ask for either discounts to F&B list price if event is in same calendar year, or lowest of a discounted price in this versus subsequent years.
(4) Let the hotels know that you are on a relatively tight budget, and can only pay "x" for your F&B requirements. NEGOTIATE whenever possible!
(5) Ask if F&B department would be willing to work with you to have menus that both fit your needs, as well as your financial requirements.
(6) Ask for some accomodation re Audio Visual.
(7) Ask for waiving of Meeting Room rental charges if you either have a certain number of guest rooms or F&B revenue.
(8) NEVER lie to the hotel. In today's world, they know what you've done in the past, and how your group was to work with.
(9) Book as far in advance as possible
(10) Be flexible on dates, if possible
(11) Remember to structure all deals/ agreements as a "win-win" situation for both you and the hotel
(12) Let the hotel know of anything complimentary you might require
(13) Let hotel know your priorities
(14) Get everything in writing, and make the RFP an addendum to your hotel contract.
(15) Get give-back dates, where you can return a certain percentage of rooms without penalty (aka attrition)
(16) Don't be greedy, but be firm in what you need, and don't give back important needs
(17) Have an "expert" either within your organization or outside your group oversee all arrangements from the onset.
(18) REMEMBER that once you sign the contract, there is NO reason for hotel to offer anything additional.
(19) Depending on your group size and revenue, certain concessions available might include: % giveback to master bill; welcome drinks; welcome party; complimentary internet; complimentary meal(s); reduced or complimentary health club/spa; complimentary guest rooms, etc.
(20) THINK AHEAD- Consider any and all possibilities and the ramifications!

This is just the beginning of good negotiations. Doing this properly, and proper and thorough follow-up, in advance, will make life much easier once the event occurs.

FOLLOW ME ON TWITTER: @rgbrody (www.twitter.com/rgbrody)
CONSULTING WEBSITE: http://tinyurl.com/rgbcons

NEGOTIATING WITH HOTELS

When one wants to arrange a meeting, conference or convention at a specific location, it is important to follow certain basic techniques:
(1) Utilize a professionally prepared RFP and submit to several properties, and let the properties know that they are competing.
(2) Make sure that you approach this negotiation from a "win-win" point of view. Know both your needs, and what the hotel's requirements are. Negotiate your entire package together-- i.e. Room rate, Food&Beverage,Meetings&Meeting Rooms;AV;Comps;Throw-ins, etc.
(3)Know the restrictions of your budget, and let the hotels know that there are financial limits.
(4)If you need something other than what they are showing, ask the property if they can accomodate you.
(5)Never lie to a hotel. Hotels know the history of your group, so if you aren't frank, you'll lose!
(6)Understand timing. When is your meeting? Are you at all flexible?
(7)Ask the hotel what they would recommend that would help both the property and you.

These are just a few of the very basic ABC's of Hotel Negotiations. If you want or need more information, or if you feel a Professional & Experienced Conference & Convention Planner might be helpful (most of the time a professional can save you time, money. and your sanity!), then go to my website at: www.rgbconsults.weebly.com, or e-mail me at rgbrody@aol.com.