Anyone can make smart bargaining moves when they’re holding all the cards, but wise contract negotiation is a very different game now, with demand outweighing supply and hotels in the driver’s seat.
Meetings Focus gathered some key insights from negotiators far and wide on how you can optimize your position at the bargaining table—regardless of the hand you’ve been dealt.
U.K. Perspectives
Paul Moynihan, with WeFindVenues, a U.K.-based site selection service, regularly negotiates with hotels on behalf of clients ranging from small meeting groups to large conference-holders. He has a number of “aces in the hole” planners can play to save money during bargaining sessions.
“Go for value-adds,” he says. “Venues don’t like to cut prices, but they do love to negotiate on those items that they can provide at cost price, or even for free. Look to get upgraded food and beverage breaks, complimentary breakout spaces or deals like one-in-10 delegates go free.”
Loyalty can pay off as well, Moynihan explains, with venues wisely appreciating the value of repeat, regular clients.
“With more marketing channels than ever before, and an ever-crowded marketplace to contend with, venues are placing more emphasis on customer retention and are willing to reward loyalty with generous discounts and numerous added extras and bonuses,” he emphasizes. “You don’t need to use the same venue for every event, but at least give them the option to quote for your events each time one comes up, and you should see the results.”
In the U.K., Moynihan adds, location—and remoteness—can be everything when it comes to negotiating money-saving deals.
“We see venues out in the middle of nowhere—generally old country mansion-style venues—offering to pay delegates’ travel [expenses] in order to win business,” Moynihan says. “One venue we worked with included return train fares from London in their 24-hour rate and laid on shuttle buses from the station to the venue to secure a booking.”
David Hellard, co-founder and CMO of U.K.-based venue marketplace Zipcube—and previously a global head of events marketing for Accenture—has three main suggestions for gaining some traction in a challenging negotiation landscape.
“Be flexible,” he urges. “Meetings and conference venues always have trouble filling their venues on Mondays and Fridays as well as during the holidays, which allows you to negotiate a better deal. Hosting an event on a Friday can be marketed as allowing your attendees to turn a business trip into a weekend break; add in a partner event and suddenly it’s a trip for the family.”
Going for packages is another way to negotiate price reductions, Hellard contends.
“Bespoke providers give you greater choice, but by buying everything through the venue from cupcakes to audiovisual, they can reduce their profit margin, as they’re still making increased revenues, which gives you better deals,” he explains.
And finally, when possible, Hellard advises planners to book last-minute, filling rooms and space that might otherwise go vacant.
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“It’s slightly more risky, but venues can slash their prices by up to 70 percent [in these instances]. Their space and a lot of their staffing costs are fixed, so they’re losing money by having empty rooms,” he says. “If you can delay booking your venue it gives you greater power to negotiate, and the venues will view your business as helping cover their costs, so they will be prepared to offer better deals.”
Group Sales
Attorney, speaker and author Tali Raphaely, who wrote The Complete Guide on How to Negotiate, urges planners to sell the value of their group and their business, and to be resourceful when doing it.
“Even in a seller’s market there are sleepy great opportunities for bargaining leverage,” the Miami-based Raphaely says. “Focus on what your group brings to the table. Is your group, company or organization one that the hotel sees as a prestigious guest? Does your attendance help the hotel with credibility or allow it to broaden its reach to new industries, or is there any other reason you can find and stress to the hotel for giving you a break? What’s in it for them? Why should they offer you a discount in a seller’s market?
“Focus on any benefits—real or perceived—for having your group involved with their hotel,” he continues. “Show them long-term reasons for working with you. Is your group growing? Will there be many more opportunities in the future, maybe at times when they aren’t quite so busy? Are you able to introduce other organizations to the hotel?”
Other questions to ask yourself, he adds, are whether your group is possibly less demanding than other groups, and if there are possible hotel resources they may not need to utilize. By showing a property how desirable your group is to work with, according to Raphaely—and thinking outside the box—you can help motivate properties to offer discounts or other perks that aren’t presently available.
Give and Take
Mary Craig, CMM, director of meetings and incentives for Balboa Travel, says negotiation is all about building connections and clear communication.
“Almost everything is negotiable!” Craig enthuses. “This business is all about relationships and I try to build a relationship with every hotel sales rep I encounter. Whenever possible, I use my NSO/GSO relationships to maximize on Balboa’s overall purchasing power, not just that of the client. I save hard negotiations for the short, short-list and bargain on the big ticket items first. Don’t beat around the bush, be direct, ask for what you really want and be willing to give back.
“Know hard dollars versus soft and what is easier for the hotel to give; perceived value goes a long way with your client,” she continues. “Keeping it competitive always helps. When a hotel knows they are in a bid situation, they will sharpen their pencils.”
But Craig emphasizes that “most of all, good relationships with the suppliers makes all of the difference. My preferred vendors will bend over backwards because they know I will always try to give them more business.”
UPCOMING FREE WEBINARS
Meeting Contracts in 2015 and Beyond: Are We Entering the Perfect Storm?
With MaryAnne Bobrow & Johnathan Howe | Part 1 Registration, Part 2 Registration
Wednesday, August 19 and 26, 2015 | 1:00 p.m. EDT
