The Heat’s Rising on a Chaotic Meetings Market
By Ruth A. Hill
Don’t look now, but that great meetings contract you negotiated a couple of years ago may be in jeopardy. Demand for U.S. hotel space is higher than ever, few new hotel rooms are coming on-line, and hotel owners are pressuring managers to recoup revenues they lost during deep-recession years.
These trends have produced a hot 2013 seller’s market that has caught many planners off guard, according to several meetings industry veterans, who warn unwelcomed surprises may be in store.
“You might have cut a really good deal back in 2009 for 2014 business,” says attorney Jonathan Howe, president/senior partner of Howe & Hutton, Ltd., “but it may not be there now. If your hotel gets a better piece of business for the same period, they may cancel you. Hoteliers are thinking things like if a booking is between Little Sisters of the Poor and a Fortune 500 company, I’ll do penance.”
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Seller’s Market Negotiation Tips
Attorney Jonathan Howe and ConferenceDirect Senior Vice President David Scypinski suggest ways to achieve flexible future program contracts:
- Ask for a 65 percent to 70 percent attrition threshold; accept no less than 80 percent, and it should be cumulative for the entire event, not “night by night” or “use it or lose it.”
- Add a room block review clause with specific review dates to your contracts (allows flexibility in case of year-over-year drops in attendance).
- Make sure the hotel mitigates (resells) any unused room commitment.
- Insist the hotel crosschecks for rooms booked outside the “official” block.
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