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.

CONCLUSION

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!

Cheers,

Related Post:

• Everyone Loves a Surprise — Except When It Comes to Event Budgeting
• Why Event Production Is Costing You More
• What You Should Know About Hotel Concessions

The post Meeting Planners: 10 Event Budgeting Gotchas! To Watch Out For appeared first on dynami.

As I’m sure you already know, hotel concessions are a great way to add value to your event and help your bottom line. The trick is to know what discounts and special services to ask for. Which leads me to our topic, what everyone should know about hotel concessions.

For starters, I always like to share these five golden rules:

1. Everything is negotiable
2. Never answer the budget question
3. Sell your event by knowing your total spend (costs of event plus individual spending)
4. Distinguish between “must have” vs. “nice to have”
5. Be yourself and strive for a win-win outcome

Something to remember is negotiation is a skill you learn. The more you train and practice the better you get. And when it comes to hotels, a majority of the chains train their sales staff on a monthly basis.

WHAT CONCESSIONS TO ASK FOR
Here are the most common concession areas you will want to discuss with a hotel before signing a contract.

• Sleeping Room Rates
  • Complimentary room ratio: The average is one free room for every 50 rooms you book and occupy (1:50). However, it doesn’t hurt to ask for more. We’ve managed to negotiate this ratio down to 1:35 for some of our clients.
  • Room block terms: We recommend asking for a cutoff date of 10-15 days before your event’s booked rooms are released to the public.
  • Attrition rate: The average attrition rate is 15%. Meaning out of a 100 room block you are responsible for the cost of 85 rooms.
  • Extended rates: Ask how many days the guests can receive the group rate before and after the event.
• Food and Beverage (F&B)
  • Discount: Ask for a 10-20% discount for the total F&B cost.
  • Lock-in current year’s menu pricing: For example, let’s say you booked a meeting for 2017 in 2016. You will want to request 2016’s menu prices for the 2017 meeting and write this into the contract.
  • Complimentary bartender fees based on agreed consumption: For the right amount, most hotels will waive the bartender fees.
• Meeting Space
  • Waive rental fee: Most hotels will waive the rental fee for meeting spaces if you meet the F&B minimums.
  • Complimentary room flip: If you know you are going to need your meeting room rearranged during the event, go ahead and negotiate a complimentary room flip up front.
• Technology
  • Ask for free wifi: Some hotels still charge a guest for wifi in their sleeping rooms.  Some even charge per device. Starting with the initial RFP, request complimentary wifi for guest rooms and meeting space. Most will grant this in the guest rooms, but may not be as willing to provide free of charge in the meeting space.  It’s important to lock in what it will cost in the meeting space in the contract to ensure you stay within your budget.

HOW TO ASK
Before negotiating concessions you should have painted a clear picture of what all your event will entail. The more details, the better. The key here is to communicate the true spending value of your meeting.
Be transparent about the areas that are crucial to the success of your event.

Next, review each section of the RFP with the hotel’s representative. Do this by asking for more information about their policies for each section. In my experience, this process lets me see which areas are more negotiable than others.

In summary, always read a hotel’s contract carefully. Don’t be afraid to mark it up. Know your numbers, they will help you sell the value of your business. Ask for special deals. The worst that can happen is they say no. Lastly, remember golden rule number five, be yourself and strive for a win-win outcome, the rest will fall into place.

Related article: 2016 Meeting Game-Changers

Until next time!

The post What You Should Know About Hotel Concessions appeared first on dynami.