Leading Meeting Professionals

Professional Convention Management Association

Negotiations $uccess in a Seller's Market

by Terri Woodin, CMP, CHSE | May 15, 2014

 

Post-recession, the hotel industry is witnessing it's biggest meeting demand ever, shifting to a hot seller’s market. For the past three years, there have been consistent increases in hotel occupancy, average daily rates and RevPAR (revenue per available room) and hotels have refocused on Hotel Revenue Management and can now be choosy on what meetings they accept or decline.

Assess Your Leverage & Have A Negotiations Plan

Knowing the value of your meeting is essential in a seller’s market and understanding the basics of Hotel Revenue Management will assist in this process and improve your communications with hotel partners. This starts with the strategic RFP and providing hotels with good information, including all date / pattern options, room / suite block, by night, meeting history, meeting and event space, by day with minimum square footage / ceiling heights, F & B functions, production / technology overview, display or table top needs and any special requirements. Don't forget set up & tear down, office, storage, registration, speaker room, etc)

Hotel Contract Risk Reduction / Cost Containment

In the Strategic Meetings Management landscape, hotel contract risk reduction / cost containment measures has become an important metric. From each countersigned contract, you can create a cost savings / risk reduction / cost containment report addressing the following:

Cost Savings / Risk Reduction Report For Each Meeting (From Countersigned Contract)

  • Sleeping Room Rates
  • Concessions
  • F&B Comp Discounts
  • AV / Production  Discounts
  • Hotel Support Services
  • Meeting Space / Set-Up Fees (for space intense meetings / multiple day 24 hour hold)
  • Internet Discounts
  • Hotel fees & Surcharges (eliminate or reduce)
  • Preferred Suppliers / Volume Buying
  • Master Account Discounts (for larger meetings)
  • Hotel contract performance clauses (based on profit, not revenue)

Six Steps To Value Based Negotiations

  • Utilize a strategic RFP / Assess your leverage for each meeting
  • Calculate your revenue contributions, by category
  • Custom hotel contract / negotiations plan for each meeting
  • Focus on negotiating added meeting value / Cost savings and contract risk reduction
  • Track meeting history & spend, by category /  hotel
  • Create a cost savings / risk reduction report for each meeting

 

Conclusions

Yes, the seller’s market continues to evolve, which changes the way planners plan and execute meetings and how hoteliers & suppliers sell and deliver service. Meetings are big investments and our mission is to have a negotiations plan for each meeting to assure value based outcomes.

For a complimentary copy of MSR's "Top 10 Contract Tips" contact Terri at twoodin@meetingsites.net

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Terri Woodin, CMP, CHSE is Senior Director, Global Meeting Services at Meeting Sites Resource, a global meeting management solutions organization.


 

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