Negotiating a hotel contract for your conference can be a daunting task, especially if you are not familiar with the legal and financial aspects of the deal. However, with some preparation, research, and communication, you can secure a favorable agreement that meets your needs and budget. Here are some tips on how to negotiate a hotel contract for your conference.
Before you start looking for potential hotels, you need to have a clear idea of what you want to achieve with your conference and what are your non-negotiables. For example, you may have a specific date, location, capacity, or theme for your event that you cannot compromise on. You also need to know your expected attendance, room block, and food and beverage requirements, as these will affect the rates and fees you will pay. Having a realistic and flexible budget will also help you negotiate better terms.
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My best advice after having been in hotel sales booking conferences for Hilton , Hyatt and LeMeridian is to NOT overestimate your skills and negotiating prowess if you don’t have volume to offer (multiple conferences & meetings WITH the number of guest rooms in equal proportion to the amount of meeting space you are needing) , haven’t done it before or only a few times, or have not worked in hotel sales.Find & utilize a third party planner (from companies like ConferenceDirect or HelmsBrisco) who book thousands of conferences a year & have the experience & volume you don’t. Put your ego and desire for hotel perks aside and get professional help which is in most cases at no cost to you the planner. They WILL get better terms then you can.
Once you have your goals and priorities, you need to do some homework on the market and the hotel you are interested in. Find out the average rates and occupancy levels of similar hotels in the area and the season, as well as the demand and supply of conference venues. This will give you an idea of how much bargaining power you have and what kind of incentives you can ask for. You also need to research the hotel's reputation, facilities, services, and policies, as well as its previous contracts with other conference organizers. This will help you identify the strengths and weaknesses of the hotel and the potential risks and opportunities for your event.
Cultivate leverage by first amassing a portfolio of viable hotels, each capable of accommodating your event's unique specifications. Utilize this array of options as a battleground for competitiveness, encouraging hotels to hone their offerings, sharpening room rates, and refining fees. With a foundation of competitive options laid, escalate the negotiation, delving into additional concessions. This phased, meticulous approach ensures each contract facet is optimized, enhancing overall value and positioning your event for unparalleled success.
I like to utilize a hotel sourcing software like Cvent that will send out the same RFP/RFQ to several hotels that fit the criterias that is being sourced. This helps to level the playing field and can also result in favorable pricing, concessions and terms.
After you have narrowed down your list of potential hotels, you need to request and review their proposals. A hotel proposal is a document that outlines the terms and conditions of the contract, such as the rates, fees, deadlines, deposits, cancellation policies, attrition clauses, and amenities. You need to compare the proposals carefully and look for any hidden costs, exclusions, or restrictions that may affect your conference. You also need to evaluate the value and quality of the proposals, not just the price. For example, you may prefer a hotel that offers more complimentary services, flexible payment options, or better customer service.
When comparing proposals, it is so important to not just go with the "cheapest" rates. You must ask the question, why is that property offering such lower rates than others? Why is this property charging so much more? It is imperative to review the goals of what you are trying to accomplish. I would recommend you look at the reviews on both ends of the spectrum. The good and the bad. No property is perfect but if the reviews are more favorable at the higher cost property, I would think it might be worth the increased rates for a better guest experience.
Once you have chosen the best proposal, it is essential to negotiate the contract clauses with the hotel. These clauses outline the rights and obligations of both parties. For instance, the rate clause specifies the room rate and any discounts or surcharges that apply. It may be possible to negotiate a lower rate, a rate guarantee, or a rate adjustment based on occupancy or market conditions. Additionally, the attrition clause outlines the percentage of rooms that you are obligated to fill or pay for. You can try to negotiate for a lower percentage, a sliding scale, or a waiver of attrition fees if you meet certain criteria. Additionally, the cancellation clause defines the conditions and penalties for canceling the contract. It may be possible to negotiate for a lower penalty, a grace period, or a rebooking option if you have to cancel due to unforeseen circumstances. The force majeure clause states the events that are beyond control of either party and that may excuse them from fulfilling the contract. You can attempt to negotiate for a broader definition of force majeure, a mutual right to terminate, or a refund of deposits if the event is canceled due to force majeure. Lastly, the indemnification clause details the liability and responsibility of each party for any damages, injuries, or losses that may occur during the event. You can try to negotiate for a limitation of liability, a waiver of subrogation, or an insurance requirement for the hotel.
Absolutely! And I would also like to add that you should have the company attorney look at the contract as well to ensure that you are not overlooking important terms or contract clauses that could increase your liability.
The final tip on how to negotiate a hotel contract for your conference is to communicate and collaborate with the hotel. Negotiation is not a one-sided or adversarial process, but a mutual exchange of value and trust. You need to communicate your needs and expectations clearly and respectfully, and listen to the hotel's concerns and interests. You also need to collaborate and find solutions that benefit both parties and that align with your goals and priorities. By maintaining a positive and professional relationship with the hotel, you can ensure a successful and smooth contract negotiation and execution.
I once had a conference that I booked that started out with events and rooms for 200ppl. The event became so popular that it grew to almost 700ppl! It is so important to let the hotel know if they can actually accommodate the growth of the event as soon as possible. Not only is it important to inform the hotel right away, the hotel has to inform all of their key staff as well to put a massive plan in place. Having a pre-convention meeting ahead of time with the onsite contacts/ team members of event as well as the hotel leadership staff. This will ensure that the event is started out on the right foot and to ask and answer any last-minute questions or any operational challenges that may arise. Communication = a successful event!
Part of that communication should include a timeline for tasks that are due from you the sources and from the hotel to te sourcer. I would highly recommend that this be spelt out in the contract and added to the overall conference timeline. This will help with transparency on both sides, and clear and timely communications!
I agree with the comments about utilizing a 3rd party. Their services are usually free for the client (they get paid via a commission from the hotel, which does not increase rates). Most 3rd parties have extensive hotel backgrounds (like myself) and their organization has developed stronger relationships with both the destinations (aka CVBs) and the hotel chains. Why try and figure everything out yourself when you can bring on an expert at little to no cost who will do the majority of legwork for you? Another set of eyes on a contract (including your legal department) never hurts. The goal is to reduce your financial obligations as much as possible while getting you the best hotel at the best value at your ideal time period.