Hotel Negotiations from the Hotel Side

Tom Pasha

With many planners working on their 2008 event and starting to look at 2009 and beyond, now is an excellent time to consider what you are doing as a group negotiator to maximize the results for your next meeting or event. 

 

When you are working to negotiate a package for your next meeting or reunion, if you see how hotels work, from the “Hotel Side,” you may be able to negotiate a better package both for your group and the hotel.

 

Like many industries, the hotel business in many markets has seen its peak and is now entering a slower cycle.  The event planners that coordinate their meetings and reunions are in a great position to maximize value-added parts of their booking contracts and stretch their budgets.  If the planners know how to approach a hotel, they can do a great job for their attendees.

 

Another key to negotiating is the fact that hotels have a very perishable commodity—rooms.  If they lose a sale and run less than a full house, they will never recoup that revenue.  Since a hotel runs all its outlets, spa and amenities based on in-house guests, the planner can negotiate a better package than ever.

 

 

Space, Dates and Rates

 

In hotels, the only three products that are sold are “Space, Dates and Rates.”  Hotel sales people are trained that the planner can select any two of the three, and they can quote on the third.  We’ll discuss these items, Space, Dates and Rates, to help you make the most of your negotiations.

 

 

Space:

 

Hotels build meeting space onto the rooms as a way to fill rooms.  Typically, corporate hotels such as Marriott, Hyatt or Hilton are built with meeting space based on approximately 100 square feet of space for every room they can commit for a group.  If they were to build a 500 room hotel, and their maximum group commitment is 400 rooms, a corporate hotel should have 40,000 square feet of hard-wall meeting space. 

 

The problem for many planners occurs when their group wants to book a smaller number of rooms and a disproportionate amount of meeting space.  If you need more than 100 square feet of meeting space per room, the hotels may not be eager to negotiate a good deal for you, because they will be prevented from booking a better piece of business that uses less space.

 

From a planner standpoint, if you can reduce the amount of meeting space you need to get to the 100 square foot per room ratio, you can negotiate a better package.  You can do this by using the same rooms for meetings as well as meals, don’t hold space past 5pm and use your general session room as an exhibit area or break-out room, instead of requesting additional space.

 

Also, be sure to ask the hotel if there are any city-wide conventions near your preferred dates. If you can book your group over the city-wide dates, the hotel typically will have lots of space available for a relatively smaller number of rooms, because a city-wide will host many of its events at the convention center, leaving the hotel space available.

 

 

Dates:

 

Hotel sales base their pricing, or “Yield” on particular date patterns.  To negotiate better rates for your next meeting, it’s good to ask a hotel when they have their peak and valley time periods.  Peaks and valleys work on both a seasonal basis and on weekly basis.  If you can be flexible on the season you’d like to meet and the days of the week you’d prefer, hotels will work to extend very competitive rates.

 

Generally, because of corporate business and city-wide conventions, spring and fall are the highest demand times and have the highest rates, summer and winter are typically slower.  If you  ask your sales contact if they are running a booking special for the dates when they need group business, you may find yourself getting a great deal.  Ask if any groups have cancelled or reduced near the dates you are most interested in, and the hotel may extend an additional incentive for your group to book into the released space.

 

Weekday patterns are excellent areas to negotiate.   An airport or suburban hotel is typically busiest Sunday through Thursday, so booking a weekend pattern helps them fill rooms and will deliver a better rate for your attendees.   Downtown destinations are equally busy on weekdays and weekends, so there will not be the same amount of negotiation available. 

 

Many resorts are busiest over the weekend, so if you can book your group into a weekday pattern, the hotel will quote a much better rate.  With that in mind, since many reunion attendees are retired, if you book your reunions over weekdays, you will receive an excellent rate.

 

 

 

Rates:

 

Hotel room rates are the key to almost every successful event.  If the room rate is too high, your attendance may suffer.  If you have a rate that is too low, such as in a limited service hotel, you can actually hurt your attendance for future events.  The best solution is to survey your members, see what are their priorities, see what their comfort level of rates might be, and shop several hotel options.

 

When you are negotiating with a hotel, a common adage is “Sales People Lie and Planners Bluff.”  After you have discussed the dates and space that you are working on, be sure to ask the hotel manager for their best rate.  In most cases, hotel sales managers have a first-quote and a fall-back rate, so be sure to ask them to see if that is the best rate they can offer.  Sometimes, just by asking that question, you’ll get a better rate.

 

The best strategy to make the most of your planning is to call comparable hotels in the area.  Be sure to ask them for their best rate, and tell each hotel they are being “shopped” against their local competition.  When a hotel sales manager hears they are being compared to their competition, they are very apt to extend an event better package to book your group.

 

After negotiating the basics of Space, Dates and Rates, be sure to bring up the extras that can add to your group’s success.  Typically, hotels will extend 1 complimentary room for every 50 occupied, but there are extras to be discussed.  Be sure to ask for a VIP suite for your hospitality or key officer.  Sometimes, hotels can sponsor an arrival reception, parking, VIP gifts, Internet access, and other features that will help you stretch your planning budget.  Hotels become more negotiable based on the size of the group, so if you are bringing a group of 50 or more rooms per night, most hotels will quote a better rate than they would for a smaller group.

 

Finally, be sure to approach the hotel negotiation part of your job as a positive, “win-win” situation.  Hotels enjoy working with military groups and will extend a better package to you than they would for a standard corporate meeting, so you should be able to negotiate a better package when you see the negotiation from the “Hotel Side.”

Tel: 407-891-2252 | Fax: 407-891-6428 | E-mail: tpasha@contactplan.com | www.contactplan.com