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This guide examines a shift meeting planners are experiencing in negotiation power with venues. We'll show you how to get the most out of strategy, opportunities, and tools available to strike the best deal.
The world of meeting planning is in flux as new technologies flood the marketplace, creating RFP Spam. eRFPs have changed the landscape dramatically and have changed how everyone gets their jobs done. When it comes to venue sourcing, RFPs are just 10% of a planner’s job. What about the remaining 90% of the work that goes into booking meetings and events?
As a meeting planner, you have some very compelling ways to build strong value for your attendees. And entering negotiations with a strategy in mind will ensure that you do just that.
This guide will examine the shift meeting planners are experiencing in negotiation power with venues and is packed with research, strategies, tactics and tools successful event professionals use to secure the best deals with venues.
When your actual room block pickup is less than what you agreedto in your contract, you're in attrition - meaning you'll be charged a penalty for those unused guest rooms. In order to avoid this situation, you need to understand how hotels forecast group occupancy. Learn how hotels typically use blind cuts, cut-off dates and attrition, so you can make the right decisions in managing your room block.
Asking for 100 rooms for three nights? Both you and the hotel want to see that happen just as planned, but the hotel will often hedge its bets a bit and will forecast your actual pickup at 80-85% of your contracted numbers. This process is known in the industry as a “Blind Cut” because that forecast is often not shared with the client. Some hotels may take it a step further and proactively reduce the room block that is committed to your group if they are concerned that your contracted numbers are too high and not representative of what you will actually use.
How the hotel arrives at the forecasted pickup numbers and how they decide when and how much to Blind Cut a room block is a process that includes a review of your group’s previous meeting history, the type of event, and the overall demand in the hotel and the city. Hotels have more data on how room blocks pick up than you’ll ever want to know, and they’re usually right.
What does this mean for your group?
Generally nothing, if the hotel isn’t going to sell out. If you need more rooms than the hotel is forecasting, it will be able to meet those needs. However, if the hotel is very busy over your meeting dates and has your pickup forecasted too low, you can save a bunch of pain and get ahead of any problems by knowing the real room block numbers that the hotel is actually expecting from your group. Here are some strategies for managing this conversation with the hotel.1. Knowledge is power: Before you sign the contract, ask what the hotel will be forecasting for your actual pickup. The sales manager may be surprised to hear that question from you, but gaining an understanding about how the hotel manages your block after the contract is signed will give you the insight you need to stay on top of things.
3. Ask for the hotel forecast: When your event is 60 days away, ask your sales manager what total occupancy they’re forecasting over your meeting dates. Then have them update you every other week until your arrival date. Most hotels actually begin building forecasts months in advance. However, there are still a lot of assumptions in place. If you find that the hotel is forecasting a 90%+ occupancy on any day over your meeting dates, you’ll want to have a conversation. The conversation can go two ways:
Negotiating your reservation cut-off date is just the beginning of the process. Learning to effectively manage it is the real trick.
When it comes down to negotiating your hotel contract, few clauses are as impactful to the overall success of your event than your reservations clause and cut-off date. As a refresher, the cut-off date is the date when all of your room reservations must be made. By "made," I mean either the date your rooming list is due to the hotel or if there’s no rooming list, the date when your attendees must have made their own reservations. Any rooms left unused in your block after this date are returned to the hotel inventory and put up for general sale. And often these rooms are sold at a higher rate than your negotiated group rate. This becomes a real bummer for those who procrastinated in making their reservations.
Why do Hotels Care About My Cut-off Date?
Before we dive into some key strategies you can use to better leverage the cutoff date, let’s quickly review why the date exists in the first place.
Everything a hotel does relating to your room block is for one purpose: to drive occupancy. The cut-off date is no different. By forcing groups to fill their room blocks early – hence, the cut-off date – the hotel has a better shot at managing around the block to fill as many rooms as possible. The more time they have to fill the rooms, the more likely they’ll actually fill them.
Strategies You Can Use to Mitigate the Effect of the Cutoff Date on your Program:
The first, of course, is in your contract negotiations, by working to get the cut-off as close to your arrival date as possible. The hotel will probably agree to anywhere from a 30- to a 21-day cut-off, depending on the demand. Less demand means more flexibility on the cut-off date. In peak season, you may find cut-off dates as long as 45 days from arrival.
The Key: Hotel Occupancy Forecasts
Start by asking one question to the hotel reservations manager at 90, 60, 45, and 30 days out: “What’s your forecasted occupancy over my group’s dates?” You see, hotels today have some very slick technology that enables them to predict their occupancy pretty far out. This is great news for you, as you’ll be far more effective at managing your own block with this information. The hotel’s response will drive all of your decisions from this point forward in managing to your cut-off date. I should mention here that if your group is generally good at timely reservations or registrations, then you probably don’t need to read any further. However, if your attendees are like most, procrastinating all the way to the end, read on.
1. Hotel’s Response: “We’re forecasting 90% [or higher] occupancy.”
Anything above 90% means the hotel is yielding their inventory – that is, charging higher rates as the occupancy grows – and will not allow you to have your negotiated rate after the cut-off. Assume the hotel will sell-out, and act accordingly.
Steps to take:
React now: Communicate to your attendee list immediately. Let them know to get their reservations in by the cut-off date or they’ll likely be out of luck.
Track it: Create a simple chart to track the hotel’s occupancy forecast each time you call. Click here to download a simple hotel occupancy tracking spreadsheet. This will give you more insight into the speed in which reservations are being made and allow you to adjust if, for instance, the hotel is on pace to sell out earlier than expected. Hotels also have tools available to help you track your progress with the room block. Ask them to include the hotel’s forecasted occupancy when sending you the updated pickup report.
Pick up the pace: At 45 days out, create a communication plan to get those latecomers to make their reservations quickly. Maybe offer up a special inventive or do a drawing for those who make their reservations prior to the cut-off date.
2. Hotel’s Response: “We’re forecasting [something less than 90%] occupancy.”
Steps to take:
Rest easy, but with one eye open: Likely, your cut-off date is now just an exercise to get you to fill the block early. In reality, if you needed more time – in fact up to the day of arrival – you just might get it. A good practice during the contract stage is to ask that the guest room rate be honored after the cut-off date, based on the hotel’s availability. That way your latecomers are able to make reservations under the group block and still get the benefit of the great rate you negotiated.
Don’t be fooled: Still ask the “What’s your forecasted occupancy over my dates” question at 60 and 45 days out from your group’s arrival. Things often change quickly (like a last-minute group selling out the hotel).
The most important thing to remember: By communicating frequently with your hotel, you’ll gain the most control over your reservation cutoff date. I should add that it’s also critical that you let the hotel know of any challenges you’re having in filling your blocks. Often they’ll step in to lend a hand, whether by creating marketing pieces for you or even by offering early-bird incentives. No one wakes up in the morning and says, “Gee, I’d loooove to manage my group’s reservation cut-off dates today!” Nevertheless, keeping an eye on the calendar and talking with your hotel sales manager 90, 60, 45, and 30 days before your event will go a long way to controlling costs and eliminating surprises.
It’s a little like the plague: Everyone wants to avoid it.
As a refresher, attrition is a term used describe when your actual room block pickup is less than what you contracted – if you don’t “make” your room block, then you’re “in attrition.” The term also describes the amount of leeway a hotel offers you if you don’t pick up your block – as in, “You have 20% allowable attrition.”
You may not think the hotels care about attrition since they are still getting paid. However, if you consider they would much rather have the room occupied by a guest that is going to spend money in the lobby bar and order room service, then you can see why they would like to avoid attrition just as much as you.
Hotels have figured out a few different ways to calculate attrition. Let’s talk about the different options.
Here are the three key points to keep in mind when negotiating the allowable attrition clause in the contract:
Properly setting up the attrition clause in your contracts can save your company thousands if you ever find yourself in a situation where your block isn’t picking up as planned.
There are typically two types of timeframe concepts hotels use to help them proactively manage your room block: The stair-step method and the cumulative method. (Some hotels may use a combination of the two.)
Stair-step method: In this method, a hotel lets you gradually reduce your room block over a series of timeframes. This was originally done to help the hotel better manage their inventory by asking you to reduce your block further out. The clause will look something like this:
Negotiating the stair-step method: The challenge with this method is that you are being asked to make a decision on your block further out– when it’s likely you won’t have the necessary data to make an accurate decision. Another problem is it requires you to remember each date, which if you’re at all like me, requires triple reminders.
Minimize the steps: Your goal here is to remove as many steps as possible, starting with the steps that are furthest out. Looking at the example above, try to get all steps combined so that you can drop 20% up to 30 days out.
Make the largest reduction as close to arrival as possible: The example above sets the largest reduction as the earliest decision. That’s great for the hotel but not so great for you. Work to reverse that so you can reduce the highest percentage when you have the most information about how your block is picking up.
Cumulative method: This is the simplest and, in most cases, the most advantageous to your organization. With this method, the calculation occurs after you have checked out. The hotel adds up your total contracted room block (including any pre- and post-event rooms), then subtracts your actual total pickup to determine whether you’re within the allowable percentage.
Negotiating the cumulative method: Here are two tips for getting the most out of the hotel when you are negotiating this type of clause.
The percentage refers to the amount of your contracted block the hotel will allow you to reduce without penalty. The typical attrition allowance ranges from 15% to 20%.
Negotiating the percentage: Pushing for any more than the typical range can be a challenge, as it sends the message that you don’t have confidence in making your block. Hotels may ask you to reduce your contracted block: “If you’re only looking to commit to 75 rooms [from 100 rooms contracted], then let's bring down the contracted block.” That said, it’s not impossible, especially if your meeting isn’t happening during peak season.
No bones about it, paying for unused rooms is a drag. Hotels hate asking their customers to pay nearly as much as customers hate paying it. But there are things you can do to mitigate the pain if, after all of the shrewd negotiations, you still find yourself in “that place.”
Negotiating the penalty clause: Typically, hotels will ask for a payment equal to the number of rooms in penalty, times the room rate. Strategies to mitigate this rely on leveraging your total meeting spend and knowing a little about hotel profit centers.
Hotels have seen a 300% increase in RFPs over the last five years with little to no growth in salespeople. What does that mean for you as a meeting planner? Your RFP is getting lost in the 40, 50 or even 90 other RFPs that your hotel is receiving. In 2010, Zentila coined a term that is now standard in the industry to describe this phenomenon: RFP SPAM.
So, what does RFP SPAM have to do with your meeting request? Plenty.
For planners everywhere – whether you use an eRFP tool or not – your meeting RFP is getting caught up in this hairball of leads in the sales office. Sales managers are now resorting to picking through the pile to find leads they want to fully respond to, then trying to find time to get to all of the others.
The trick for you is to make sure your meeting request jumps out and says, “Yo! I know you’re busy, but you should respond to this meeting request first!”
So, what can you do to get your RFP to stand out and get detailed, accurate proposals the first time around?
Answer: Think like a salesperson!
Salespeople “sell” you. Then they “sell” your meeting. Hotel managers have gotten very good at picking which meetings to take and which meetings to pass on. This process has many names, but it’s usually called RevMax or Business Review. Each day, salespeople go before a group of internal decision makers, which likely includes the revenue manager and general manager, to convince them that your meeting is appropriate for the hotel. They may even find themselves competing with other sales managers for the same dates.
What happens when two or more groups are interested in the same set of dates? Your hotel salesperson starts by presenting all of the reasons why your business is the best business for the hotel. The guest room and Food & Beverage budgets are a huge consideration. However, there is another important factor when determining a great piece of business: the Space-To-Rooms Ratio (SRR). Meeting space is the most valuable resource in any hotel. Without it, hotels aren’t able to maximize their occupancy and revenue.
Don’t worry if you don’t. Most planners have never thought of it. The calculation is simple, but the knowledge is critical to negotiating the best deal. The lower the SRR, the better the meeting. If your SRR is over the hotel's budget, you’ll know quickly what to adjust to get a good deal. And if your SRR is under the budget, the hotel will really want to book your meeting, which means you’ll be able to ask for more concessions up-front.
Your SRR is first calculated by day and then averaged out over the length of your program. Here’s an example program for one day:
Simply count the number of seats in unique meeting rooms that you’ll require. Leave out any evening events, when space isn’t at a premium. The events that count are highlighted in red above. You can see that Monday’s events require 150 total seats in four rooms.
Now it’s time to get the total square feet needed for 150 seats. To do that, multiply the seats by 20 square feet. That brings the total space needed to 3,000 square feet.
Last, take your room block (the number of guest rooms) for that day, and divide it into the total square feet. Let’s say that you need 50 guest rooms. This means the SRR for this day is 3,000 / 50 = 60.
Here’s where it gets tricky: Your first and last days often have very a high Space-to-Rooms Ratio, because you’re blocking a lot of space but few guest rooms. In this case, the hotel may ask you to delay your set-up or reduce the space needed for set-up. This is all in the name of maximizing their meeting space use for every group. Work with them to reduce your set-up time, bringing your space needs in line with your room block on those days.
Now I’m not talking about when Columbus discovered America. In this case, I’m talking about your meeting history: Where and when you’ve held this meeting before, and how many guest rooms you occupied.
When you provide the hotels with at least two years of history regarding your meeting, you create instant credibility for your event. You’re showing the hotel that you have consistent room pick-up every year, and that your group will meet its contracted room block commitment. You also give the hotel a chance to forecast its guest room inventory more accurately, allowing the best opportunity to sell out the hotel.
First-time meeting with no history? No problem. The key for hotels is understanding why your group will attend the meeting. So, although it’s never been held before, it may be a meeting in which it’s mandatory to attend. Tell the hotels this right up front.
Or use some other meetings that you’ve held every year to show you know how to block rooms. Leveraging other meetings is often overlooked, but the hotels will use the information in a similar way.
Finally, if this is truly your first meeting and you have no other meetings to help prove your credibility, be prepared to describe how you’ll get attendees there. And also, be flexible. Hotels will likely take your meeting and put it over dates where there’s less risk. I’ve seen some remarkable deals made for groups that are willing to fit the hotel’s need dates.
Nothing takes the air out of a salesperson's balloon than those dreaded five words, "these dates are not flexible", it stops them in their tracks. And you’re more likely to get a turndown or no response.
Worse yet, you limit your ability to be a true savior and budget-conscious guru. Yes, I know – sometimes you’re really not flexible on dates. But why not let the hotels show you what they’re willing to offer if you were to be flexible? I have both offered as well as seen offers made that could easily save 10% to 20% off your overall budget if you’re willing to be flexible.
Why not have these options to take back to your meeting owner? Imagine going back and saying, “Hey, I know these dates aren’t flexible but the XYZ Luxury Hotel just gave us a complimentary opening reception worth $10,000 if we push the meeting forward four days.”
So, how do you get these types of offers? At the top of your RFP, add the words: I’m willing to explore alternate dates if you make it worth the effort to change from my preferred dates.”
Every great salesperson loves a little competition. But it’s discouraging when you know that you’re competing against every hotel in a 200-mile radius.
In fact, there’s plenty of evidence that the “shotgun” approach can hurt your search. A recent American Express study drew a strong correlation between the number of hotels receiving a meeting request and the percentage of hotels that respond late or don’t respond at all.
Sending an RFP to too many hotels can hurt your chances of getting the right response from the right hotel, and the overall proposal will likely be higher.
By sending your meeting request to fewer than eight hotels, you’ll send a strong signal to hotel salespeople that they have a real shot at earning your business. This is the #1 motivator for salespeople: Less competition means a higher chance to close, which in turn means they’ll drop everything to respond to this lead. But first, you have to get credit for your keen sense of sales motivation.
Tell them how many hotels are receiving the request and, if possible, tell them who they’re competing against.
As a former salesperson, nothing motivated me more than knowing who I was competing with. This information enabled me to put together a killer proposal that focused on my hotel’s strengths in a way that was meaningful to you, the customer.
Beyond knowing the competition, the next big motivator for salespeople is knowing whether they’re in contention, or whether they’re out. The short list date isn’t your decision date ... it’s simply the date when you’ll tell the hotels whether they’re still in the hunt or not. This important step in the RFP process is a great way to get the salesperson to respond promptly and completely.
The short list date works best when you follow two simple rules.
The short list date also gives salespeople valuable information that they can use to sell your meeting internally at the RevMax meeting (from tip #1). Because they know you’ll tell them quickly whether their proposal has a shot, they can “sell” your meeting hard.
It’s all about revving their competitive engines. Great deals come when your salesperson is engaged once they’ve made your short list … and not before.
Often, salespeople are asked to jump through incredible hoops before they even know if they’re in the hunt. It goes something like this (with just a little exaggeration for thematic affect):
"I’m sending this meeting lead to eight other cities with 10 hotels in each city, but before you can be considered for this meeting you must respond to the attached 5-page, single-spaced, concession list and 12 contract addendums.”
Seriously. If you were in their shoes, would you spend time on this? Or would you pass it up to find a meeting that you can actually book?
So, save the important requests for when the stakes are the highest and when you have the salesperson’s undivided attention … that is, once they’ve made your short list.
Once on the Short List, salespeople will dig deep to earn your business. That means agreeing to many requests that likely would not have been approved prior to being shortlisted.
Sending regular updates to salespeople ensures they and their teams know exactly where you are in the decision process. What you don’t want is a salesperson who, when asked during a business review, “What’s going on with XYZ group?” has to say, “I’ve left 15 voicemails, 25 emails, and I even wrote their company’s name in the sky and … nothing!”
The poor salesperson looks uneducated about your meeting, and pretty soon the team will stop talking about it in the RevMax meeting. That leaves you wide open for losing your dates. It also makes negotiations that much tougher if you do decide to work with that hotel.
Even if you have no update, send them an email letting them know that – and do it before they ask.
True sales professionals delicately balance between being an ambassador for the hotel and an advocate for you. Communicate often and you’ll have confidence that they’ll look out for you and your meeting.
A wise salesperson once said, “I love to hear yes, I can live with no … but I will starve with MAYBE.” It seems so simple, yet so many never close the loop with the salesperson. I estimate that 75% of the time, a salesperson never learns the outcome of the proposal they submitted. This has a real effect on their time management. It means that while they’re trying to get the update for a meeting that already booked somewhere, they’re not responding to your killer RFP that has everything they could want in a great meeting lead.
"75% of the time, a salesperson never learns the outcome of the proposal they submitted"
Keep in mind that while salespeople may be disappointed that their hotel was not selected, they’ll always appreciate the news. It’s also important to share why they did not win your business. When you close the loop, you add to your credibility and increase your chances of receiving a timely and complete response from those hotels next time. Doing so keeps the lines of communication open and creates an opportunity to work together in the future.
RFPs are only 10% of a planner’s job, so what happens to the other 90%? Capturing negotiation details, compiling bids, analyzing spend and more could be automated through new technology that is on the market, as the traditional RFP isn’t designed to handle the other 90%. It is time to change the way that planners manage the thousands of details surrounding each of their events. Get the tools and knowledge to automate 100% of the sourcing and booking cycle.
As a decade-old technology, the conventional eRFP has limited ability to manage data. In an effort to move forward, the industry has tried to put more and more onto this one little tool, loading on responsibilities it was never designed to do. Hoteliers today are getting eRFPs with 20 or more pages of addenda. Now, the eRFP has become so weighted down that it’s hugely inefficient.
Adding to the problem, the traditional eRFP isn’t built to book meetings. It’s designed to sell marketing packages to hotels. Venues that pay get high visibility even if they don’t fit your meeting requirements. With the goal of driving leads, old-school eRFPs encourage planners to send requests to 50, 60, even 75 hotels that might work instead of just five that are perfect for your meeting.
Once you click send, it’s game over. The antiquated, single-purpose eRFP has done its job. You’re left on your own to handle the rest of the work the old-fashioned way. So, bring on the manual calculations, cutting and pasting, and hours of spreadsheet work.
Hotels don’t have it any better. Not surprisingly, they’re drowning in eRFP spam, facing a 300% spike in lead volume compared to five years ago. At the same time, the eRFP closing rate has tumbled – down a remarkable 87% from five years ago. Planners complain that the proposals they do receive are often late and incomplete, leaving them to chase down hotels for missing information.
"Responsiveness of suppliers" is now one of global meeting planners' top three concerns, ranking only below declining budgets and increased workload. These are the findings of a survey released in late 2015 by destination marketing company Development Counsellors International.
Clearly, this system is no longer working. Our industry must get out from underneath this notion of free, marketing-driven technology. The fact is, there’s no such thing as free technology – someone has to pay. And the clunky, outdated eRFP is serving the wrong customer.
With lead volume at an all-time high, our industry is crying out for an end-to-end solution – one that has a short list date and stays with you throughout the entire process to help you get meetings booked.
Over the years, we’ve watched the job of booking meetings and tracking spend become much more complicated than it ought to be. Listen up planners: There’s an easier way. Comprehensive, new solutions are available now that are planner-focused and advertising free. They provide a much simpler approach to sourcing as well as booking and capturing meeting spend data to save time and money.
These next-level technologies provide robust eRFP solutions and do the heavy lifting on the other 90% of your work. So, you book meetings faster, negotiate smarter and drive more value for your organization.
Capture data from start to finish
Here are just a few of the ways these bright, new solutions help you shine after you send your eRFP.
Manage the Madness: With hotel occupancy approaching record highs, finding availability is a challenge. Booking events has become so complicated that it’s nearly impossible to carry on simultaneous negotiations with multiple venues. There’s just too much back-and-forth communication to manage.
Fortunately, nimble new solutions take the complexity out of contracting meetings. They manage the changes automatically, tracking communications and storing it all in one place. There’s no need to hunt through past emails and meeting notes. Information is easily accessible whenever you need it. With changes recorded in real time, you’re always up-to-date.
Power Your Consulting Engine: Event planning today is all about collaboration. Meeting owners and customers want planners who understand their vision and can bring it to life. To that end, the new, end-to-end solutions are specifically designed to build customer collaboration and keep stakeholders easily in the loop.
Toss the spreadsheets, sticky notes and manual calculations. Let technology take care of the admin tasks, and free yourself up to spend more time serving meeting owners/customers as a trusted advisor.
Advanced new solutions compile all bids in a comprehensive summary that calculates costs and savings automatically. That makes it super-easy to compare offers. The bid summary is interactive– allowing you to customize the view to create a professional presentation that prioritizes options for focused discussions that drive faster, informed decisions.
Share bid summaries with meeting owners via read-only web links or easy, one-click reports. Some technologies even allow you to take transparency to the next level and provide a direct portal into your planning process. Let meeting owners view bids returned and concessions won in real time. You’ll get timely feedback to stay in step with their rapidly evolving needs. So you guide sound decision-making and assure the best possible experience for their M&E spend.
Simplify Big Data: In the current seller’s market, demonstrating value can be difficult. True, Big Data offers a trove of insights to make event improvements and measure success. But many professionals struggle to know which chunks of data apply. Without careful management, Big Data can become so complex that it gets in the way of smart decision-making.
The good news is that new technologies are on hand that capture and aggregate data and present the relevant information in bite-size pieces right at the point when you need it.
Hone in on essential data, like savings and spend, past rates paid, brands your organization books and saves with the most, other meetings in the works companywide, and more. Then, leverage these insights to gain additional concessions and increase meeting ROI. With the right analytic tools, technology is a powerful way to drive better deals and demonstrate the value of all you do.
Why settle for a meager 10% when technology allows you to automate 100% of the sourcing and booking cycle?
Banquet events allow your attendees to come together, take a break and create lasting bonds at your event. As a result, your meeting's food and beverage (F&B) is extremely important to the success of your event. Many planners work hard to negotiate the F&B minimum down, even if their catering budget will exceed it. Instead of thinking of your F&B spend as a liability, it is time to see it as a benefit to drive better deals from the hotel. Learn how to feed the right information to hotels to keep your F&B budget under control.
Sounds crazy, right? Not really. If you happen to be spending more than what the hotel requires, you’re leaving money on the table. Think of it this way: The first F&B minimum is for the hotel and the second minimum amount is for your company. Here’s a real-world example. Say you’re having a sales manager retreat, with 50 people for three nights. That’s three breakfasts, three lunches, three dinners, and at least one cocktail reception. You do your homework and come up with your budget for the event.
This additional spend of $4,000 means you have real leverage to add some value to your overall meeting. So, tell your hotel salesperson, “I agree to the F&B minimum … and I want another number put into the contract. If we spend at least $16,000 on F&B, we’ll unlock these additional concessions.”
Then ask for some things that will create real value for your group. Need more suite upgrades? How about I.T. help? Whatever you might be missing from your bag of goodies can be leveraged with a tiered F&B minimum.
Is there a risk in this? Sure. You may find that after committing to the additional spend, your budget is cut. The good news is that as a result of this extra step in negotiations, you have a record of what you traded for a higher spend. In other words, let’s say you were able to get an additional couple of suites and some A/V concessions for the extra $4,000 in spend. If you have to reduce it down later, you know exactly what you’ll have to give back in return.
Most hotels have a minimum amount of F&B spend that they need to earn per room-night. Just like guest room rates, you can bet that this number varies widely based on the time of year.
If you’re planning an event that has a significant amount of food & beverage spend, ask the hotels to quote you their per-day F&B minimum, on a per-person basis. This is a great number to have before you start negotiating. It will help you understand if you have leverage with the hotel already built into your budget. If they are asking for $125 per person, per day and you were budgeting $150, agree to their number and ask for the tiered minimum we talked about earlier.
Knowing this number will also help gauge if the hotel is the right fit for you and your budget. If their per-day F&B minimum seems out of your range ask if there is flexibility moving to another set of dates. Hotels are willing to discount minimums and customize menu pricing, if the right group is willing to “fill a hole” in their schedule.
When your hotel partners are evaluating a business, at a quick glance they consider these three top pillars: rates, dates and space. Basically, they want to know what rates you need (both in guest rooms and F&B), when you want to meet, and how much space you plan to use.
Because you plan meetings, you know there is a lot more to the budget than those three items. Do you use the on-property audiovisual company for the general session and all the breakouts?
Are you one of those planners who put on such a great awards dinner that the evening continues well after the event and into the hotel bar? If so, ask your hotel partners to estimate your group’s “out of the room” spend. This is valuable information to have when negotiating your next meeting.
These all have a monetary value and can be used when you are “lite” or not quite where you need to be with your F&B minimum. By collecting this information for past meetings, you can make a compelling case to future hotel partners. And they’ll factor in this information before submitting a proposal.
Not everyone knows about Complete Meeting Packages (CMPs). Typically, a CMP will include breakfast, morning and afternoon breaks, lunch and basic audiovisual setup (screen, projector, mic). And CMPs are priced per attendee, giving you an easy way to understand whether the hotel can work with you to stay within your budget.
CMPs are gaining in popularity, and for good reason. Most hotels are willing to customize a CMP especially for your group if the basic package will not meet your needs. It may require a little more work upfront but can save time and energy fretting over costs down the road. Many hotels already have CMPs available; you just need to ask for them.
Also, contrary to popular belief, your catering hotel partners love to work outside of the traditional banquet menus. Given the opportunity, most of them will put together a customized menu based on your needs and budget requirements. So, tell them your budget and what you want to accomplish during the meeting. You might uncover a way to spice up that traditional chicken dinner we’ve all grown a little bored with over the years.
Sometimes, despite your best efforts, you miss your F&B minimum. Not to worry, as long as you’ve planned ahead. Hotels have wiggle room with F&B minimums. Why? Because “Penalty Payments Are Pure Profit” (PPAPP).
Here’s the rationale: For every $1,000 a patron spends on F&B, the hotel pays approximately $300 in hard costs (the actual food and beverages consumed). If you miss your F&B minimum, the hotel isn’t incurring the costs of those un-scarfed meals and un-quaffed drinks. Knowing this, you can put a provision like this in your contract:
"In the event that the F&B minimum is not met, the customer will pay the profit difference estimated at 50% of the unmet F&B minimum."
Another way to bridge the gap between your F&B minimum and actual spend when you are not expecting to reach the minimum is to ask the hotel to create elevated menus for your group. In other words, if you come up 10-20% shy of reaching the minimum, you’re better off turning this situation into a nice opportunity to reward your group with eggs Benedict for breakfast and surf & turf paired with a fantastic cabernet for dinner.
Negotiating hotel concessions is one way to improve your next hotel meeting experience - and your bottom line. Concessions are the "special deals" you would like the hotel to include at a discount or sometimes at no charge at all. Those deals may include parking fees, Wi-Fi charges, suite upgrades, food & beverage discounts, VIP amenities and more.
Here are our 10 most popular concessions:
It’s bad karma to ask for all 10, so consider which concessions are most important to your meeting. Your chance of a successful negotiation increases when you focus your efforts on the main ones.
This enables you to get credit for your group’s guest room pickup.
Your request: “1 complimentary room-night for every 50 rooms picked up, cumulative.”
What this does: If you pick up 50 room-nights, no matter how many days it takes to get to 50 room-nights, you’ll get one room-night free. Pick up 150 room-nights, you’ll get 3 complimentary room-nights.
This is a big deal if you have attendees who will be driving to the meeting.
Your request: “Complimentary self-parking for drive-ins up to 25 cars [or whatever you think the number is].”
What this does: Hotels typically outsource their parking and have a large bucket of complementary and discount parking passes to use up. Ask for them.
Believe it or not, most meeting hotels charge for internet in guest rooms. Ask for this every time.
Your request: “Complimentary internet in sleeping rooms.”
What this does: There’s no middle road here; the hotel will either say yes or no.
A bit tougher to get done because this is a big revenue source for hotels. You’re more likely to get a percent off than complete waiving of the fees.
Your request: “Complimentary internet in meeting space.”
What this does: Rather than asking for either complimentary or discount, this leaves the door open for the hotel to fight hard to get your business. This has a big impact on your total meeting cost.
This is only applicable to hotels that provide airport transportation.
Your request: “Complimentary airport transportation for the group.”
What this does: Another big expense for your meeting. Leave the door open for other discount offers.
Want to impress your boss or CEO? Ask for this concession and really wow them. Hotels will likely agree to this if you have a minimum of 25 rooms each night. Less than that, ask for a discount of 50%.
Your request: “One complimentary round-trip town car airport transfer.”
What this does: Makes you look like a rock star when you tell them it didn’t cost you anything.
This is the insurance policy on your meeting in case it cancels. You want a rebook clause to mitigate paying cancellation penalties. An enormous risk mitigation technique: Your company will have an opportunity to rebook a meeting in that hotel within a certain time frame.
Your request: “Please include a rebooking clause.”
What this does: The hotels do this all the time. Let them come to you with the rebook terms. Any rebooking clause is better than no rebooking clause.
Another insurance policy against a last-minute downturn in your attendees showing up at your meeting. Attrition is the number of rooms the hotel will allow you to drop from your contracted block before they start charging a penalty.
Your request: “20% cumulative attrition for the room block.”
What this does: If you’re contracting 50 rooms for 2 nights (a total of 100 room-nights), then as long as you use at least 80 room-nights, you avoid any attrition charges. Make sure the hotel calculates this cumulatively for your program – in other words, on your total room-night block instead of day-by-day.
Depending on your needs, this can save your company a bunch of money. You should always ask for at least one suite upgrade, even if you have just 10 rooms per night, up to 25 rooms per night. Then add another suite for every 25 rooms per night.
Your request: “One [two/three /etc.] suite upgrade.”
What this does: Suites are expensive. Asking for this can save your company $1,000 or more with each meeting.
This helps avoid being charged for meeting rooms by adding value to your catered food and beverage.
Your request: “Complimentary room rental if food and beverage minimum is met.”
What this does: Hotels are asking you to guarantee your catering spend. You’re asking for something in return: that hotels waive the room rental fee if you meet their minimum spend on food and beverage.
You are now armed with the knowledge that will shift the advantage in your favor when negotiating with a venue. You will be better prepared to deal with any of the unforeseen circumstances that might arise during the next meeting.
Sourcing venues for meeting and events is not about looking at a hotel database, which many vendors offer, it is about finally getting the productivity tools that elevate your job. Take the hotels by surprise and ask the forecasting questions. It will show them you take your commitments seriously and have taken the time to understand how the business operates.
These compelling solutions offer an easy path that takes you all the way from sourcing to booking, analytics and reporting. You’ll work faster, smarter and . . . more joyfully, too, with technology behind you 100%.
All of these tools and tactics are built into the Aventri venue sourcing platform. Whether you source through Aventri or not, try applying just a few of these strategies when entering venue negotiations. I promise you’ll get better deals while creating far stronger relationships.
Schedule a demo today to see how Aventri can help you Connect Better and start creating unforgettable meetings and events.