By Beth Buehler
With a solid seller’s market currently in place, contracts and negotiations are getting more complex according to Meetings Outlook, 2018 Summer Edition, published by Meeting Professionals International (MPI). Of those surveyed, 67 percent confirmed the seller’s market status while 55 percent indicated that contract negotiations are becoming more complex. Also, 22.8 percent noted that contract negotiations now focus on very different issues than in the past, and only 3.1 percent of respondents viewed contract negotiations as getting simpler.
So what does this mean for meeting and event planners? When booking venues and supplier services in Colorado or any destination, it is important to know at least basic information about how to negotiate a meeting contract.
Destination Colorado asked two of its board members several questions regarding this important topic. As the account director for groups at Hotel Talisa, Vail, Lauren Lacy, CMP responds from the hotel perspective while Deana Mitchell, owner/operator of Realize Colorado, a Global DMC Partner, answers from a destination management company (DMC) point of view. However, many of the main points apply to all sorts of meeting contracts.
What are a few key things you consider when negotiating a meeting contract in your current role?
I consider the size of event, how long until the event is going to take place, the group’s history with pick up, and spend on food and beverage. I also take into consideration the quality of event; if it is a need timeframe, perfect pattern or good fit for the hotel; and if it achieves 100 percent of our average daily rate and food and beverage expectations. – Lauren Lacy, CMP, Account Director, Group, Hotel Talisa, Vail
Custom event elements, concessions, liability and payment schedule are key things. We also want to make sure we are putting as much detail as we have about the event(s) at the time of contracting and use addendums for changes or additions. – Deana Mitchell, CMP, DMCP, CCSE, Owner/Operator, Realize Colorado, a Global DMC Partner
What are your three top tips for a meeting/event planner who is negotiating a meeting contract?
1. If you need certain or more concessions, consider increasing your room rate by a few dollars or increase your food and beverage minimum. Perhaps you would rather have different concessions than what’s been offered. If so, suggest removing another one to get the one you want.
2. Read it! All too often, groups sign without reading the entire contract and asking questions about clauses. Later in the planning process, they end up surprised about a requirement when we can often make the clauses work for everyone if I know prior to signing. If you don’t read it and don’t tell me that it won’t work for you, I don’t know!
3. If you have clauses of your own and a list of concessions, send them with your request for proposal. Do not wait until you’re at the contracting phase.
1. Get it all in writing … if there is something special you need or a concession you have been promised, make sure it is all in the final contract. This covers all parties.
2. Be up front about your budget as we can help clients a lot more armed with this information.
3. You will get the best deal if you negotiate all needs at once instead of starting small and adding later.
How can a planner and supplier best work together when going through the contract negotiation process?
Always recap in writing what was discussed if negotiating over the phone so there is no misunderstanding later. Use track changes when requesting changes on a contract. Send one email with all of your changes as opposed to multiple emails with bits and pieces; this way, the likelihood of missing something is much less. – Lauren Lacy
It is in all parties’ best interest to have changes, additions and requests in writing. If you have a phone conversation, make sure to follow it up with an email recap so you confirm that all parties are on the same page. Email works great for this or a PDF that tracks changes for each party. – Deana Mitchell
How has meeting contract negotiation evolved/changed over the past few years in Colorado?
Hotel demand has increased, so hotels are less flexible with cancelation clauses as your group is likely not the only group that would have booked those dates. Attrition levels have dropped back down from 20 percent to 10 percent. – Lauren Lacy
I have noticed that lately you have to ask for things to be held for you, whereas years ago, it was automatically held when a proposal was provided. – Deana Mitchell
What lessons have you learned along the way in terms of contract negotiation?
With Colorado being a true four-seasons environment, we have several seasons to consider and some are in higher demand than others. You can get a great deal outside of ski season or prime summer season if you have a little flexibility in your dates, and these other times of years are still beautiful and offer several activities and amenities. – Lauren Lacy
Be straight forward from the beginning about your needs and the needs of your procurement; this will save everyone time! – Deana Mitchell
Anything else you want to mention regarding meeting contract negotiation?
If both sides are flexible, it will be best for everyone in the end. – Lauren Lacy
When asking for a contract, know who will be signing the contract (including name, address, phone and email), how you want to take care of payment, and your process for payments. Also, meeting contracts may need to be defined according to hotel, DMC, conference center, etc. as they are all a little different. While I mainly was speaking to DMC contracts, we also negotiate hotel contracts in some cases. – Deana Mitchell
Beth Buehler is editor of Colorado Meetings + Events and Mountain Meetings magazines, has planned numerous meetings and events and enjoys exploring Colorado.