NOTE: This is Installment 2 in a periodic series of blogs highlighting industry practices that can have a negative impact on your corporate meeting or event budget. (Click here to read Installment 1. – “Everyone Loves a Surprise — Except When It Comes to Event Budgeting“)
In Vegas, it’s generally understood (less so by those left dazed and wondering, “Wuh happened?”) that “the house” will always finish ahead. You may win a little here, a little there, maybe even hit a biggie from time to time but, as a rule, the house will nearly always walk away the winner.
In corporate meeting and event planning, not every planner knows all the emerging, subtle tricks and sleight of hand used in hotel contracts that can leave you wondering, “Wuh happened?” at budget reconciliation time. Don’t gamble with the Gotchas! Knowledge is power and you need all you can get when it comes to corporate meeting and event planning.
Here are 10 things to be on the lookout for.
1. Taxes, Service Fees (and Taxes on Service Fees)
This seems to be a newish trend. We’ve all become accustomed to the “plus-plus” phrase used when referring to taxes and service fees. But now, there’s a movement toward adding a special “tax” to the service fee, turning “plus-plus” into a “plus-plus-plus”.
For example, let’s say you’ve got a $100 charge for a gallon of coffee on your bill (hey, it’s good coffee). Add in the local and state tax at, say, 8% then toss in a 22% service fee and you’re at:
(Step 1) $100 x 1.08 = $108.00 County/State Taxes
(Step 2) $100 x 0.22% = $ 22.00 Service Fees
PRESUMED TOTAL $130.00
But wait, there’s more! There’s a new “Step 3” appearing in hotel contracts and bills.
(Step 3) $22 x .08 = $1.76 “Tax” on Service Fee
ACTUAL TOTAL $131.76
Now, “a buck-seventy-six” upcharge may not seem like much at first blush but consider the many hundreds of dollars within the hundreds of thousands you spend on a typical program and it adds up, up, up. Don’t say you weren’t warned!
2. Charging per Person vs. Consumption for Coffee
Most hotels charge a flat fee for coffee by the gallon. But some hotels are now insisting on “per-person” fees. A hotel in Charlotte recently charged us a $14 per-person fee … and you had to order for a minimum 85% of the people in your group. If you’ve got a group of 500, your minimum is 425 x $14. Factor in the plus-plus-plus, and yikes, that adds up, too.
3. In-House Recommended A-V Company for Breakouts vs. Sole Provider
A new twist we have seen is a Sole Provider for Breakouts This arrangement is vaguely referenced in the main contract but all the details (including pricing, service charges, special requirements, etc.) are detailed in a separate, free-standing document. A busy planner may not think to read carefully the satellite document and, Wham!, you discover, ex post facto, your breakout A-V charges are 50% higher than what they usually are. “Captive market” is a nasty thing.
4. Absurd Inbound/Outbound Shipping “Handling” Charges
This one’s a headshaker. We recently shipped a rolling case from Atlanta to a Houston hotel and literally were charged a $250 fee on the front-end and another $250 fee on the back-end for a tidy sum of $500. Mind you, this wasn’t for literally “handling” the cart, storing it in a secured area, and delivering it to the appropriate meeting space. Nope, this was merely for saying, “Yep … it arrived” and “Yep … it just left”.
5. From the “Truss and Up”
We all know rigging can get quite expensive but, at the same time, we understand a hotel needs to protect its physical plant by ensuring heavy work like truss rigging is handled properly by in-house techs. A corporate meeting planner typically has the selected A-V supplier bring in the truss, understanding in-house techs will handle the actual rigging. Now, more and more hotels are insisting on providing the physical box truss along with the rigging labor and, yep, bigtime upcharge versus what you’re used to paying. Again, “captive market” is a nasty thing.
6. Fees for Guaranteed Room Flips
You’ve got a packed agenda and your General Session room needs to be flipped for your Awards Gala ASAP. Hotels are now charging a premium for a guaranteed “flip time”. This, too, can bust your budget.
7. Late Fees for Last-Minute Registrants
Beware the Book Late, Dig Deep, Gotcha! trap for the air and travel portion of your program. Encourage your attendees to book early and often or your budget will be burdened (or busted) by “procrastination penalties”. Like airplanes, air and travel rates go up, up, up the longer you wait to book.
8. Alcohol on Consumption vs. Package Pricing
This is nothing new but it’s worth a reminder. Like coffee (see #2 above), hotels want to steer you toward actual consumption fees versus package rates which are typically more affordable. Know your audience and their consumption levels. And manage your time windows for alcohol-served events carefully. You also need to have a checks & balances system to ensure the drink tally is accurate and fair when you opt to bill on a consumption basis.
9. Feed the Masses (and a few more)!
When developing your F&B budget, be sure to consider those hungry souls beyond your actual attendees. If you’ve got a five-piece band playing, a linens & florals team, a décor team, etc., they expect to be fed and they expect said food to be hot. Since the number of “over-and-above” folks typically falls below the required minimum for a buffet, you have no choice but to order costlier plated dinners. Again, this adds up!
10. Daily vs. Weekly A-V Rental Rates
This one applies to in-house A-V providers, as well as outside production companies. Like “Long-Term Parking” and “Short-Term Parking” at the airport, you’re going to pay more for short-term. Compare weekly vs. daily rates carefully. Even though your program is only four days in duration, you may find the weekly rate is a more favorable option.
Don’t roll the dice when it comes to event budgeting. Know where the Gotchas! lurk and work around them … or you’ll pay the price, literally.
When it comes time for budget planning for your next corporate meeting or event, be on the lookout for subtle clauses and conditions that can cost you dearly in the end!