Negotiating Hotel Contracts

It is often said that everything is negotiable in hotel contracts. While that is not 100% true, there is still quite a lot that can be negotiated beyond the guest room rates, rental rates, and food and beverage prices. So how do you go about getting what you want and/or need for your event? Negotiation, of course, and that’s where knowing what you can reasonably negotiate in your contracts can make a difference. Let’s take a look at some common approaches…

There are some that believe that, if you want the moon (so to speak), you should ask for the sun and the moon – knowing that your request will be rejected and a counter offer will be put forth. The idea here is that, by asking for more than you need, you will get what you need as well as, possibly, something extra on top of that.

Others take the position that you should only ask for what you really need when putting out an RFP to hotels. This allows you to easily weed out those who cannot provide your basic needs while still giving you some choices among respondents. Anything they offer above and beyond the basics are considered a bonus.

I, and many others, tend to take a middle road of sorts. I outline the absolute minimum requirements for the event in the RFP. [Read this post for an outline of what that should include…] Once those are listed, I then will often add another layer or two of special requests. The first layer consists of the items that are desirable to get as part of the package. By themselves, none of these items are deal-breakers, but they can help make a bid more attractive to my client by providing certain perks that are of value to them. The second layer is made up of the client’s “wish list” items. These are things that will really take a proposal “over the top” but that we really don’t expect to get. This way, I ensure the event’s basic needs are met, without the hotels having to guess what those items are, and gain a few additional extras in the process that I know the client would like to have, without having the hotels offer items that are worthless to the client (and thinking those are deal-clinching incentives).

So, what do I ask for? What do I negotiate on? Well, that depends on the client and, if there are items that I absolutely must have, I am sure to include them in the RFP. Knowing what to ask for means that you, as the group’s planner, need to really know what the group requires, what would be of value to them, and what their ideal, pie in the sky, response would include. The better you can picture those three lists, the more productive your negotiations can be. Although there are those who view negotiations as “how much can I get from the hotel”, I prefer to view the process as one in which I am searching for the intersection of desires that maximizes what my client wants with what the hotel wants (yes, they want something, too – and it’s not always money!). If I can identify what the hotel wants, and can give it to them, then I can get more of what my client wants in return.

Every property is different and that will shape my approach. One may be able to negotiate on room rates but not on space rental, while another may be able to waive rental fees but cannot alter their food prices or guest room rates. As the planner negotiating on behalf of my group, it is up to me to find those areas that the hotel can negotiate on and work with them. Remember, if you cannot find an acceptable intersection of needs, you can always walk away – as can the hotel.

How do I know where the hotel can bargain? Some of it comes down to experience but, ultimately, if you don’t know where they have room to negotiate, ask them. Their goal is to book your business, which means they have an incentive to find a workable middle ground, too, and many sales reps understand that an informed opposite in negotiations can help them make it work for both parties.

While “everything” may be negotiable, I have found that being realistic about what I ask for and expect to receive in return for what I have to offer at the bargaining table is an excellent way to begin – and leads to a successful contract/partnership more often than not… And, a final thought here, if I can make the negotiations work for both sides (my client and the hotel), they are each happier with the results and my value to both of them goes up, too.

~ Karl Baur, CMP • Project Director, RDL enterprises