If you’ve ever been tasked with securing a hotel for a group meeting or event and got frustrated working with the hotel sales representative because you didn’t get the best dates or rates for your sleeping rooms and meeting space, it’s more likely than not related to one of these five things you haven’t considered when working with hotels.
Secret #1 – Be flexible with your dates. Hotels are always looking for groups who can fill the empty spaces in their calendar. If the dates of your meeting or event are not set in stone, but all other aspects are suitable to your needs, allow flexibility and you’ll look like the hero! Day patterns are important to hotels, so be sure to look at the pattern of days in which you’re booking the meeting. Hotels love booking mid-week meetings and events; for example a Wed. – Sat. meeting. Avoid the weekends, that’s when the rates jump regardless of where you go.
Secret #2 – Book your sleeping rooms to check in on Sunday. Hotels prefer a Sunday-to-Wednesday or a Wednesday-to-Saturday pattern, so if your group can work with those patterns, you have added leverage in your negotiations. Most hotels are always looking to pick up business for groups who want to book sleeping rooms on this major check-out day. Generally, the exception to this rule is a resort property.
Secret #3 – Be flexible with your space requirements. I always tell my clients to “be the big fish in a little pond”. For example, why go to a convention center hotel for a two-day meeting of 500 people when you can go to an airport or business park property and be king! Bigger hotels cater to bigger meetings. So just because you’ve always wanted to go to property “XYZ”, it doesn’t mean that it’s the right fit for your event.
Secret #4 – Have a good ratio of space needs to sleeping rooms and food and beverage requirements. Understand that a hotel makes it revenue from guest rooms, meeting space rental, food and beverage and ancillary services like Wi-Fi, business center services, etc. They make the majority of their revenue on sleeping rooms using a formula called RevPAR (revenue per available room) and it changes on any given day depending on a host of factors including time of year, number of bookings, and type of hotel. However, it is generally calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. Your job is to figure out the most efficient use of the space your event needs along with other services before sending the RFP. Let’s say for example, you’re planning an event and you ask the hotel to put its largest ballroom on a 24 hour hold but you only want to contract 20 sleeping rooms and have one meal function. Unless you have done a lot of business with that particular hotel or, represent a client who does meetings throughout the hotel’s chain, you can expect to pay for meeting space and pay a higher rate on sleeping rooms. Why, you ask? The problem is your group wants to book a smaller number of rooms and a disproportionate amount of meeting space, and this prevents the hotel from booking a better piece of business that uses less space. Additionally, your event won’t produce the same level of revenue as a larger group to impact the hotels other department’s i.e. catering, room service, spa services, restaurants, and all the other services guests partake in when staying on property.
Secret #5 – Know your group’s history before you start the process. Too often planners are surprised with proposed contracts that contain ridiculously high rates and needless offerings from the hotel. If you know your groups’ history you can put an end to this by stating up front in the RFP what your exact requirements are. If you know your attendees value free WI-FI in the guest rooms then a free coffee break is of little value to your group as a trade-off. Most importantly, know the credit and billing history of your group. Slow payments or defaulting on paying for a previous event can seriously hinder your ability to get the best terms for a group contract. If you do not deal with the issue of credit up front you will automatically be subject to the hotel’s payment policy which is usually full payment three days before your event. Knowing your groups history will allow you to negotiate the option to establish credit (direct billing) so that you can retain your payment until 30 days after the event. You will however, be subject to a credit check and the hotel will do its due diligence in seeking out your credit references.
Secret #6 – Use a professional meeting planner to navigate the details of negotiations. If you do not engage in negotiating hotel contracts on a daily basis you should hire a professional meeting planner to do it for you. I was once asked to solve a problem for a group that was hit with attrition damages when they received their final bill. The issue: the group’s contract stated “they would be charged X amount of money for meeting space if they did not meet X amount in food and beverage”. The group thought they met the food and beverage amount and therefore, did not owe for meeting space. The clause relating to food and beverage however was exclusive of tax and service charges; something the group did not realize even though it is stated in the contract. It was a simple mistake that could have been prevented, but one that ended up costing them five figures and a damaged credit record.
As planners, we already have the knowledge to develop and RFP that will produce winning results, the tools to find the right property for your meeting or event, and the expertise to negotiate contractual language that makes the hotel accountable for its performance and protect your group. Like the old adage says, “If you think it’s expensive to hire a professional, try hiring an amateur!”