Negotiating with Hotels: How to Meet in the Middle (and Still Come Out Ahead)!
12 Nov, 2013By: Laura Nakoneczny
No matter how comfortable sports-oriented professionals are when it comes to the court, the field or the track, that competitive confidence somehow evaporates when they find themselves in a new arena -- the negotiating table. And when what they’re negotiating is a hotel contract, it’s easy to understand the jitters: it’s unfamiliar territory.
Negotiations don’t have to be awful; in fact, they’re generally not. After all, a hotel and a team each has something the other wants: the hotel wants to sell rooms and the team wants a place to stay. The object is to work together so that both sides are satisfied.
Having said that, here are some points to keep in mind:
Understand the Parameters: Some parts of the equation are out of your control as a planner. The city and the venue in which your event is taking place are already a given. To a certain extent, this creates limits on the hotels you are going to consider as official hosts. After all, you will need to find lodging that is convenient to the competition venue and to things like entertainment and dining options for your team. The hotel has the advantage is this situation and may be prepared by having higher rates over that time frame, particularly if the event is taking place during a period of high demand for rooms.
That doesn’t mean all is lost, however. It just means you need to be able to show the hotel what you as a prospective client can offer the property in exchange for their space, their amenities and more.
Understand Your Group: If you know what your group can bring to the hotel – and more importantly, what it can leave behind outside of just heads on beds, you have an advantage of your own. Say you’re traveling with a youth team. You’ve noticed that once the athletes hit the hay each night of the tournament, their parents come down to the on-property bar/restaurant and spend a few hours catching up with their friends from other teams. That means they’re also spending money on food and beverage. If you can come into the negotiations with a history of how many people have used those facilities over the years, and how much they spend on average, you have a good tool to use in your negotiation.
Ask for Flexibility: In blocking rooms for your group, don’t be afraid to block slightly lower than the number of rooms you might need – but build in the provision that if registration grows unexpectedly, you can add rooms and still have participants able to access the negotiated group rate.
Ask for Room Block Audits: Make sure the hotel will allow you to find out who is in your room block – and who isn’t. People will always try to get a better deal on rooms by using a third-party organization (Internet travel sites are usually the culprit here) and if they have used this method, they may not show up in your rooming list and may not be counted toward your room nights. Regularly audit the rooms sold in the hotel and make sure that all people in your group are counted toward your room block. (Remember that your room block numbers from each year are what the hotels in years to come will be looking at when you go to negotiate with them in turn).
If you see that unexpectedly, people in your group are not reserving into the room block, and are using an Internet travel site fare, a Groupon rate, etc., arrange your contract so that you are not beholden to filling your room block unless the hotel counts those people toward it.
Make Your Group the Priority: Hotels often oversell rooms, knowing there will be no-shows and knowing people will cancel at the last minute. On the occasions when there are no cancellations, however, it is possible that the hotel will need to ‘walk’ clients; that is, send them to another property. You can guard against this kind of inconvenience for your athletes. When negotiating your hotel contract, ask that, if anyone in your room block needs to walk, the hotel will do the following:
- Arrange for a comparable room at a comparable nearby property
- Arrange for cab fare or shuttle service to move the person and their luggage to that property
- Arrange for transportation of that person to the competition venue and back to their new hotel as needed each day
- Pay for any amenities the person would otherwise be getting in the host hotel as part of the negotiated package (Internet, free breakfast, etc.)
With enough safeguards in place, the hotel will give your group priority space and make it far less likely that anyone will have to stay anywhere else since, after all, it creates an extra amount of work for the hotel itself.
Having said all that, it is essential to remember that many sports events go back to the same cities year after year. If you are booking a multi-year contract, you may find that your hotel sees you as a more valuable client and is able to offer you more as a group and as a planner.
Don’t Be Afraid to Ask for More: Occasionally, planners will accept a group rate offered by the hotel because they don’t think they have any options. But if you ask: “Can you do any better than that?” or even, “Our group can really only pay between $X and $Y per night and they typically leave behind $Z in food and beverage sales,” the hotel may be willing to work with you. After all, they would rather have the guarantee of rooms being sold (and income from the bar and restaurant use).
Damage Control: Any hotel contract includes a clause pertaining to damages and the fees you will incur if you cancel an event. In general, it will say that if you cancel your event, you are liable for 100 percent of the lost income. In reality, though, hotels write their contracts based on profits vs. revenue. About 70 percent of what you’re spending goes back to cover the hotel’s cost: staffing, maintenance, etc. The remaining 30 percent is profit. When you write your contract, revise the damages clause to make yourself responsible only for the profit lost by the hotel. Even if you don’t anticipate having to cancel (nobody does), this will safeguard you. Remember that the hotel can always rebook the space you won’t be using.
Give Yourself an Out: Make sure the contract is contingent upon your need to hold your event. Say your hotel is a cheerleading tournament at the convention center attached to the hotel. You want to indicate in the contract the fact that you are booking the hotel because of its relationship to the convention center. In the event that the convention center suffers some kind of structural catastrophe that will prohibit you from holding your event as planned (a burst pipe that causes widespread flooding, a power failure, a roof collapse, etc.), note that you reserve the right to cancel your event. It probably won’t happen, but if it does, you won’t be held responsible for room nights.
The Little Things: When you’re negotiating your hotel contract, don’t lose sight of the fact that little charges can add up. For example, a hotel may state that wi-fi costs $X per day. Find out in advance if that means $X per day for each room as a flat rate – or whether it means $X per day for each device each person is using in that room. (In an era of laptops, tablets and smartphones, that can really add up). If you can negotiate a room rate that includes all wi-fi, your participants will be happier.
Overall, it’s essential to remember that your group is bringing business to the hotel. The hotel, in turn, is providing a service to your group. If you enter into a good relationship based on openness and trust, you’ll both have success in the long term.