The ABC Of Hotel Negotiation

Perhaps the most important ingredient to successfully negotiate with a hotel regarding a group booking, especially one that is a conference and/ or convention that includes food and beverage, and audio- visual needs, is profession comprehensive negotiation from the beginning. It should all begin with an organization sending out multiple Request for Proposals (RFPs), that pinpoint and identify specific needs of the group upfront, and pits one hotel property against another. The three major issues that need to be addressed before there should be any meeting of the minds are what I refer to as the ABC of hotel negotiations- attrition, benefits and concessions.

1. In a hotel negotiation, both sides are attempting to put itself in the best position, protecting its interests as well as possible. Hotels and groups will determine together their room bloc needs, and it is essential for the organization to be honest in his evaluation of his needs. Since many hotels have been hurt in the past by groups that over- promise but failed to deliver, it is quite common for Attrition clauses to be a standard part of a Hotel Group Contract. Attrition refers to either a fixed number or percentage of the bloc that the group guarantees, and thus assumes financial responsibility if that number is not achieved. While it is clear why a hotel would want fair and protective attrition clauses in their contracts, I have observed groups that were financially damaged because of lack of protections that the group takes. A group negotiator should first try to have attrition clauses eliminated (or at least significantly reduced), and should offer give- back dates so as to protect the hotel's interests. After all, looking at this from a hotel's perspective, a hotel does not want to lose the possibility (and revenue) from having the opportunity to sell these rooms to others. The give- back can be that the group can have the right to reduce the size of the group at certain predetermined dates, or to have some percentage of the Food and Beverage spent count towards its guarantee. Without a fair agreement on this issue, the negotiation must not proceed further.

2. The next major issue to discuss in a negotiation is the benefit both sides will receive as a result of the agreement. Benefits include advantageous group room rates, beneficial food and beverage agreements with significant flexibility, complimentary meeting rooms, fair audio- visual costs, etc. The agreement must benefit both sides, and thus a professional hotel negotiator will always do his homework to better understand the needs and desires of the hotel.

3. Different organizations require different concessions. Some of these include free or reduced cost of internet access (both in guest rooms and meeting rooms), significant parking fee concessions, a favorable comp rate to the organization (many hotels begin this discussion at something like one free room per fifty, but a group must negotiate this to a significantly better comp percentage), significant food and beverage and audio- visual concessions (including such items as dramatically reduced corkage fees for bring in wine and/ or champagne from outside); hospitality rooms and hotel sponsored activity; reduction in health club, spa, etc. fees, etc.

Those organizations that begin the negotiating process properly with a well worded RFP, and then follow the above basic first steps, invariably fare far better than others. It's often the difference between success and failure.