Last week I was training one of our newer team members on the art of negotiation. For this particular exercise we were reviewing hotel concessions; what they are, what to ask for, and how to ask.
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:
- Everything is negotiable
- Never answer the budget question
- Sell your event by knowing your total spend (costs of event plus individual spending)
- Distinguish between “must have” vs. “nice to have”
- 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.
- 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!