14.6.12 - Tips for Negotiating a Hotel Contract - Old websiteI once heard a story that the lead singer in a famous rock band always had to have a bowl of M&M’s in his hotel room but without the blue ones. The meeting planner negotiating the contract skimmed the contract and never noticed the bit about the blue M&M’s. The rock star, being a prima donna, threw a fit. Now, not every contract is going to boil down to the blue M&M’s, but it is still really important to read, understand and sign a contract that outlines your meeting.

Read the contract before signing it: I know, you’ve read Force Majeure paragraphs a hundred times, Disability Act paragraphs a hundred times, but remember that this contract spells out in detail exactly what you can expect to happen and if something goes wrong, the contract will be the final word on how things should be handled. Read and understand every word.

Be Fair: I know you want to get as many comps and goodies as you can, but the hotel needs to make money, too. After all, it is a business, just like yours. So start out asking for the world, but understand that you will most likely need to drop some comps from your list during negotiations. It helps to decide before the negotiations begin the comps you will be willing to give up.

Know your client: Keep in mind that you are working for your client. So the contract should be tailored to the needs of your client. For example, your client may be a non-profit organization, so cost will be a major consideration. But if your client is a Fortune 500 company, VIP treatment may be more important to them.

Know your room rates: The attrition clause is important in negotiating contracts. Keep in mind that if you do not fill your room block, the hotel will still have the rooms available to sell. You may want to include a clause stating that you will not be charged attrition if they sell out some or all of their available rooms. If your client is getting a commission on the room rate, you want to make sure that the attrition is based on the room rate minus the commission. If the room is not used, there will be no need to clean and refresh the room, so that should result in only a percentage of the room rate being used to calculate the attrition.

The contract is your legal, binding document which states what you will and what you won’t pay for. If you have to read it and renegotiate once, twice, or ten times before you both come to an agreeable contract, so be it. Do not feel like you have to sign the first ‘draft’ of the contract. Do your homework before signing and always make sure everything you want is written in it.

What tips do you have for negotiating hotel contracts? Place your ideas in the comments below.

 

Susan started her second career as a meeting planner (her first one was as a rocket scientist) nearly 15 years ago at Professional Meeting Planners, under the great tutelage of Lori Gershaw.  She has enjoyed her time with GCG Event Partners since its inception, wearing many hats helping to shape and improve operations and processes.

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