Contract Negotiations: Beyond the Basics

transcript

#toursanmarcos @PYMLive @JeffRasco

Kristi Casey Sanders @PYMLive Jeff Rasco @JeffRasco#toursanmarcos

https://www.flickr.com/photos/stevensnodgrass/5480863464

Special thanks to these PYM LIVE speakers

Melissa Washington - SmartNet StrategiesJoyce J. Ginsburg - JJG MeetingsChristy Lamagna, CMP, CMM, CTSM - Strategic Meetings & EventsPaula J. Rigling, CAE, CMP - Meeting Planning Professionals

What will be covered in this presentation

1. Reminder: The power of relationships2. Contract elements, what affects them & things to consider3. Concessions: group discussion, sharing & tips4. Addenda: group discussion, sharing & tips5. Additional resources

Disclaimer: I’m not a lawyer

This is for educational purposes only. :)

Remember• The person on the other side is a person,

not an “opponent.”

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• The goal for both of you is to book and create a successful meeting.

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• Communicate what you value and why.

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• Don’t be afraid to ask questions.

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• Know what are your “must haves,” “would like to haves” and “can live withouts” and negotiate accordingly.

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• Know what are your “must haves,” “would like to haves” and “can live withouts” and negotiate accordingly.

• Protect yourself and your group. Nothing “never happens.”

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Remember• If the answer is “no,” ask why. See if there

are any alternatives.

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• This isn’t personal. It’s business.

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• Work with your sales contact to find benefits for both sides.

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• Have a back-up plan.

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• Have a back-up plan.

• Know that sometimes you have to walk away.

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What goes into a contract?

Contract basics

• Dates

Contract basics

• Dates

• Number of guest rooms needed

Contract basics

• Dates

• Function space requirements

Contract basics

• Dates

• Food & beverage needs

Contract basics

• Dates

• Food & beverage needs

Each of these areas must be addressed before the contract is signed!

Addenda may be necessary for areas not addressed. Work with legal and procurement to create set addendum.

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Dates• Time of year (what else is happening)

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• Off-season/in-season

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• Off-season/in-season

• Sales quotas (weak dates)

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Guest rooms

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Guest rooms - don’t forget• Shoulder dates (pre- and post-event needs)

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• Number of each type of room

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• General attendees

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• Staff rooms

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• Staff rooms

• Suites for executives

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• Staff rooms

• VIP guests

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• Staff rooms

• VIP guests

• Speakers

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• Staff rooms

• VIP guests

• Speakers

• Vendors, etc

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Guest rooms - rates• Who’s paying for the rooms?

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• If attendees pay: What rate do you need to generate attendance?

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• Will there be a special staff rate?

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• What’s included in the resort fees? Are those amenities your attendees need?

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• Do you need to negotiate a commission to go back towards your association, personal payment (for independents) or client?

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• Do you need to negotiate a commission to go back towards your association, personal payment (for independents) or client?

• Do you need VIP upgrades? Airport transfers for attendees?

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Guest rooms - relationships• Maintain an excellent relationship with your

Convention Sales Manager because …

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• Can they sell the rooms you can’t fill?

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• Do they need to bump a group?

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• Do they need to bump a group?

• Can you make good another year?

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Function space• Actual meeting space needed

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• Take into account:

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• Set-up time / rehearsal time

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• Type of set-up needed

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• Purpose of event

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• Risk management

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• Risk management

• Back-up weather plans

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• Risk management

• Attendee mobility

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• Risk management

• Attendee mobility

• Outdoor lighting/walkwaysQ

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Food & beverage

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Food & beverage• What’s the hotel’s minimum requirement for

those dates?

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those dates?

• What type of functions are required?

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those dates?

• What does your group like?

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those dates?

• Can the chef prepare something for your budget?

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those dates?

• Can the chef prepare something for your budget?

• Can you use smaller cups / plates to save money?

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Group discussion: Concessions What concessions are important to your group? What are you asking for and getting? What do you have to compromise on?

Time to share: Concessions

• What’s important to you and your group/company?

• What are you asking for and getting?

• What are you having to compromise on?

Concessions - Tips from PYM LIVE San Francisco, Chicago & Austin

• What’s important to you and your group/company?

• Free Wi-Fi in sleeping rooms and meeting space

• Discounted F&B

• Free parking

• Free water

• VIP amenities / free room drops

• A/V discounts

• No resort fees

• Free airport transfers

• Free staff meals

• Free staff rooms

• Load in/load out dates

• Waived shipping/receiving fee

• No meeting room rental fee

• Free business center

• No fee for bringing own projector, laptops, tech people, etc.

• Reduced vendor/hotel commission on A/V

• No corkage/reduced corkage fee for wine brought in

• Locked in F&B pricing for future events

Guest rooms • What’s the cut-off date to reduce your room

block? (ex: 15-20% reduction possible within 30-45 days pre-event)

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• Request a room audit so you get full credit for all attendees at hotel, including ones who booked outside the block.

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• Request a room audit so you get full credit for all attendees at hotel, including ones who booked outside the block.

• Negotiate comp room credit (ex: 1 per 40) to be applied to master account

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Function space • What unusual venues/amenities exist on

property (or in the city)?

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property (or in the city)

• Can there be business-friendly amenities comped for the registration desk? (e.g., outlets, phone line)

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• Does the property have any soft goods they have on hand that can be used to augment decor?

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• Does the property have any soft goods they have on hand that can be used to augment decor?

• What can the CVB provide?

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Food & beverage • Base attrition on lost profit not lost revenue

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Food & beverage - attrition• Base attrition on lost profit not lost revenue

• Put in writing (addendum) - no service fees or sales tax will be charged on F&B attrition

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• If you’re in danger of not making your numbers, can you upgrade menus & service?

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• If you’re in danger of not making your numbers, can you upgrade menus & service?

• F&B maximum: Can you unlock additional concessions by hitting a certain number?

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Group discussion: Addenda What clauses are you adding to your contracts? Do you have special addendum already prepared?

Addendum

• Do you already have set addenda in place?

• What clauses are you using?

Addendum - Tips from PYM LIVE San Francisco, Chicago & Austin

• Force majeure

• Sleeping room attrition (based on lost profit)

• F&B attrition (based on lost profit)

• Sustainability requirements and reporting

• F&B maximum unlocking additional concessions

• Reporting requirements (data, energy, attendee spend)

• Cancellation/rebooking clause

• Noise/enjoyment clause

• Construction/renovation

• Concessions (include top 3 must haves)

• Prevent competitors from booking overlapping event dates

• Change of ownership/flag

Need more tips & ideas?

“Contract Negotiation: Prepared & Fair are Effective in Any Market”: ez.com/prepared “F&B Negotiation Strategies,” this presentation and more: slideshare.net/KristiCaseySandersContract Negotiation articles and other meeting planning advice: PlanYourMeetings.com Upcoming webinars: ez.com/pymhangout Claim your free membership to PYM: ez.com/pymsubscribe

Plan well & prosper, friends! Stay in touch! @PYMLive @JeffRasco #yaypym

Contract Negotiations: Beyond the Basics

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