The meek may be set for a pretty sweet inheritance, but they won’t get very far with hotel negotiations.
While a seller’s market might make cutting an amazing deal tough in today’s landscape of low supply and high demand, planners can still embolden their leverage and raise their ambition through one key factor: knowledge.
“In order to be aggressive, you need to know what you’re dealing with,” says Jonathan Howe, a seasoned negotiator and meetings industry attorney who channels this experience in his role as president of Howe & Hutton, a law firm with offices in Chicago and D.C. “Knowing the market, doing your homework on the property, paying attention to supply and demand are all key.”
Part of that knowledge, he emphasizes, is knowing—and selling—the value of the meetings group you’re bringing to the table.
“A lot of planners don’t sell the value of their meeting,” Howe explains. “The issue today is how much clout you bring to the table, and you really need to sell the sales manager on your group; make them drool with expectation.”
Upselling the positive side of your meeting is crucial as well, regardless of the size of your group, he says.
“You might only have 20 people, but if they’re CEOs, that’s substantial added value,” Howe offers as an example.
Know the Hotel Side
Analyzing situations from the hotel’s perspective is huge for a number of factors, from learning where your clout lies to understanding their flex points and beyond.
“Very few planners have been on the hotel side of the business,” says Tim Brown, CEO of Meeting Sites Resource, based in Irvine, Calif. “So they’re just not involved in the minutiae of [hotel] management. I tell planners today to think like a hotel manager.”
Five key details, from Brown’s perspective, are looking at your room block and peak nights; your proposed group F&B spend; your rooms-to-space ratio; potential ancillary spend on items like audiovisual, tech and spa; and the season and timing of your event.
Taking charge, Brown believes, “isn’t just about saying ‘gimme, gimme, gimme.’ It’s justifying your position based on information.”
Much of that 411 is about tracking your own data and spending, looking at details like contracted rooms versus actual pick-up and your true F&B spend. Brown knows every hotel that his groups have stayed at and exactly how much they have spent with them in every essential area—a task simplified with a technology platform created by his company named Meeting Evolution.
For more on the hotel perspective, we “checked in” with Colin Sanderson, a 20-year veteran in the industry and director of sales and marketing for the Eagle Ridge Resort & Spa in Galena, Ill. He opines that two key routes to planner success at the hotel bargaining table are being flexible and understanding the points where lodgings are actually able to negotiate.
Sanderson explains that in looking at a hotel’s ‘need dates’—the calendar slots where they often struggle with occupancy—and being flexible on their own event timing, planners can save substantially. Being flexible on space needs, he adds, also allows the hotel to be more open about pricing.
As for pinpointing key negotiation points, he says those areas include—but aren’t limited to—guest room rates, meeting room rental, AV needs and usage, teambuilding activities and amenity fees.
Three Simple Steps
Lisa Morris, president of Road Concierge in New York, works with more than 100 groups annually, with an emphasis on hotel negotiation. She shared three of her top insights on gaining an edge and taking charge of the situation.
First off, she advises “bucketing” your business if possible, for those planners working with multiple groups.
“I always reach out to the hotels with not only the meeting group I am trying to book, but with all other groups I have coming to their city to see if the combined business volume will allow me to do better for all my events,” Morris explains. “Sometimes you have a group whose dates are not ideal for the property and the rates would be too high, but then if you provide the property with other groups that have more favorable dates, their revenue managers will consider the bigger picture and reduce the rates for everyone.”
Another essential item, from Morris’ viewpoint, is leveraging a hotel’s “comp set” in the area, even if you have a first choice in mind; nearly all hotels, she says, will come back with a rate that is not a true “walkaway” quote—and you can then use your lowest quoted rate to bargain against this. And for her third tip, Morris urges planners to negotiate directly with a hotel sales contact.
“Never ever use an RFP delivery tool and just accept the offer made,” she advises. “Get on the phone and talk to the hotel about the people who will be attending and the exposure for their property. Talk about the amount of food and beverage attendees will likely spend in addition to any of the covered meals and how much money they can make from it. Talk to the hotel about potential marketing and advertising opportunities. There is always a creative solution if you are willing to look at all angles.”
And if you’re also willing to arm yourself with info, you’ll be one step closer to truly becoming the boss of the bargaining table.
UPCOMING FREE WEBINARS
Negotiation Part 1: The Art of the Deal, Wed., March 11, 2015, 1:00 p.m. EDT
Negotiation Part 2: Leveraging Meeting Spend, Wed., March 25, 2015, 1:00 p.m. EDT
