Hotel Contracts: Part 2

SHOW ME THE ROOMS!

Working your way through the contracting process with hotels, convention centers and other event venues might be analogous to navigating through a landmine.  Last month, we discussed the importance of coming to the negotiating process from a position of strength and knowledge.  You accomplish that by:

  • ·         Knowing the Value of Your Meeting
  • ·         Understanding the Concessions of Greatest Benefit to Your       Company

And as we reminded everyone, if you don't ask, you don't get!

 

THE MEAT IN YOUR HOTEL CONTRACT – GUEST ROOMS

Guest rooms are the most profitable category for a hotel.  So be candid and realistic with them from the start.  You certainly want to build a strong partnership over the long term. Do your homework and take whatever time is required to realistically calculate your guest room needs.  The sales staff will appreciate your candor and you guard against the dreaded attrition (see below). If you have history on the same meeting for a couple of years, you will have greater credibility with the hotel and begin negotiating with a strong hand.  Be sure to find out what rate the hotel is offering other groups for the same dates and approximately the same size.  You should strive to assure no other group in the property has a better rate than your guests.  You can easily extend your negotiated room rate for two or three days before and after (shoulder dates) your scheduled program, if your registrants want to arrive early or stay over.  Remember, the total number of rooms booked is the single biggest factor in negotiating from a position of strength.

 

ATTRITION IS THE ENEMY

Avoid this enemy at all costs.  It’s expensive and hard to justify to management, unless it is a first-year program. You will be subject to attrition penalties if you fail to reserve the required number of room nights.  First, try for an 85% or 90% performance requirement and never go below 80%.  Second, (especially for a smaller, first-year program) ask for an opportunity to review the room block at 60 days out with the option to add or cancel rooms, without penalty and at the same negotiated rate.  Finally, the hotel will offer you a standard 30 day (or four-week) cut-off date, but insist on a three-week cut-off.

 

CROSS-CHECKING IS KEY

If your guests are booking reservations directly with the hotel, you should request a weekly update  from your reservation manager.  As required, obtain a full housing list so you can crosscheck and make sure anyone registered to attend your meeting has reserved rooms AND those who have reserved rooms are registered to attend the meeting . This is also a great way to be sure your Board Members, VIPs, Speakers and Staff have all been appropriately reserved.

For larger meetings, if you are concerned about attrition, insist on a registration audit which compares your Housing List with Group Reservations. This is the only sure-fire way to get credit for all your earned room nights and potentially avoid the Attrition Enemy. 

 

MORE COMP ROOMS ARE IN YOUR FUTURE

Your Complimentary Room Ratio will almost always be offered at one per fifty.  But again, the stronger your business is to the hotel, the more likely you are able to get a 1:40 or even 1:35.   And request complimentary staff room and suites over and above the standard to accommodate your VIPs.  Also ask that your comp rooms be based on the total room nights reserved, not the number of rooms reserved per night.

 

IF THE ENEMY STRIKES

If, despite your best, good-faith efforts, you fail to perform on your room block, communicate with the hotel -- early and often.  If you are monitoring your housing reports and cross checking lists, you will know well before the 3-week cut-off date if you are likely to fall short.  If you can, release rooms back to the hotel for them to sell prior to your cut-off date. That will mitigate damages. And if you DO get struck with a penalty, negotiate with the facility to contract another meeting in the property or in the chain within a one or two-year period.  A strong relationship with the hotel company over several years and a great National Sales Manager are your biggest ally here. 

Remember, if you don’t ask, you don’t get.