Today’s meeting planner is presented with a problem. Due to recent hotel mergers, airline consolidations, and other general price increases, costs are higher than ever and negotiations are not as easy as they once were. For example, hotel contract negotiations are an overwhelming 63% more challenging due to these recent changes.1 Likewise, group air rates are predicted to rise by 4.7% in the coming year.2 However, this does not mean negotiations are impossible, but they do require more than a lucky guess. Meeting planners must come with a thorough knowledge of what they have to offer and where there is room for negotiations.
SET YOUR BUDGET
Before you can dive into negotiations you need to have your event’s budget in place. Even if you already have an amount allotted, you must decide how to divvy up your budget among the necessary components. According to M&C’s Meeting and Spend Survey the average break down of costs is as follows.3
Being aware of the major costs will help you identify how to use major budget items to leverage savings in other areas.
BUILD A RELATIONSHIP
Meeting planners can easily feel flustered during negotiations, especially if they aren’t going as planned. However, it is vital that you focus on building a relationship rather than aggressively demanding the lowest rate. Whether negotiating with hotels, venues, airlines, or other vendor-partners, most businesses are eager to establish a long-term relationship. Take the time to learn their objectives and needs. This will not only make you more pleasant to do business with, but it will also give you an edge on where you can cut costs. If the vendor-partner seems like a good fit, signing a contract for future events is a great way to receive optimal pricing.
KNOW YOUR VALUE
When selecting services for your meeting it is easy to think merely as a buyer, but don’t forget you are also selling yourself as a potential client. Before you can move into the specifics of negotiating, you must prove yourself a desirable customer. This may feel daunting especially when dealing with a big company, such as a major hotel chain, that likely has many potential clients lined up. However, don’t forget that even in a seller’s market, hotels still rely on the business of large groups. Be ready to give estimates of the amount your group will spend. Offer a realistic picture of past spending by bringing the numbers from previous events. This will prove valuable not only with hotels but with airlines and venues as well.
Leverage Major Areas of Spending
After demonstrating your value as a client, you can naturally turn the conversation to negotiations. Higher spending in big areas such as meals or rooms will boost the likelihood of receiving freebies and discounts.
For example, when negotiating with hotels use the number of rooms you plan on reserving to negotiate a complimentary room rate, such as 1 free room for every 40 rooms booked. You can also use the number of rooms booked to ask for free concessions such as internet or parking.
The same can be done with your venue. Ask if they will throw in a couple smaller meeting spaces to correlate with the number of large rooms rented. Just as with the hotel, it is worth asking if your venue will throw in any free services such as WiFi or décor in exchange for the amount of money spent in other areas.
When negotiating with airlines, you can try a similar technique and leverage your estimated spending to ask for some cushy upgrades, such as loyalty perks or lounge access. However, don’t let that distract you from the main area of savings. Keep in mind that airlines are most likely to negotiate on flat rate flights from a single destination or conference window rates.4</>
Bundle Deals and Alternate Options
Bundle deals can also be a great way of negotiating lower costs. Bundling your hotel and venue ensures that the hotel will receive the majority of your event’s spending. Because of the obvious advantages hotels receive from bundle deals, you will likely have more success driving down costs of A/V equipment rates, WiFi, and even room rates and food costs.
However, don’t make the mistake of assuming that bundle deals are always the right choice. Instead of booking a hotel with a connected venue, it may be more cost effective to go with an independent venue. Likewise, consider independent vendor-partners for other aspects of your meeting.
For instance, prices on A/V equipment and labor are notoriously high. After food and hotel rooms, it is the typically highest cost. When securing your group’s A/V needs, consider going with an outside organization. You will typically find lower prices than you would through the hotel or venue. Better yet if your business has its own equipment, consider bringing it to the event. You might even be able to look internally for someone who is qualified to set it up.
By looking outside the venue or hotel, you might also secure savings on décor and even food and drink. Local businesses can be a great asset in eliminating costs. For example, you might save on décor by asking a local florist to donate some flower arrangements, or art galleries might be willing to show exhibits in exchange for some publicity. Similarly, if you find that prices on food are too high, look for a venue that won’t enforce a food and drink minimum.
When it comes to negotiating the details, the most important step is also the most obvious: come prepared.
Be Attentive to Contract Details
Make sure you have a thorough knowledge of the contract with each vendor-partner. If you rush past this step you may miss the fine print that you otherwise could have discussed. Don’t forget to apply the same tactics mentioned above when negotiating attrition rates and cancellations policies. Whether you are booking a large block of rooms or bundling deals with a connected venue, you can ask hotels for lower attrition rates and more lenient cancellation policies. Also, keep an eye out for unnecessary extra services that you can eliminate.
Do Your Research
Most everyone knows that vendors have peak times of the week, month, and year. However, this is a detail that can easily be overlooked when selecting the event’s date. Aside from researching these variables, providing flexible dates can help you procure lower rates.
Once you land on the desired date range, you can begin the process of selecting your vendor-partners. Even when it appears you found the ideal space, it is important to explore other options. Gather prices from surrounding venues, vendors, airlines, and hotels. If a competing business offers a lower price for a given service, inquire whether your desired company might price match. Be on the lookout for newer establishments that will likely be more flexible when it comes to lowering rates.
Even though speaker costs make up a substantially smaller amount of spending compared to other areas, you can still save funds by engaging local speakers or entertainment. If your location makes this too difficult, you can cut down on transportation costs by asking keynote speakers to do more than one session.
Know Your Own Needs
Finally, have a detailed list of your company’s needs and rank them in importance. Having a written list of your needs will help reduce the risk of being upsold on unnecessary services. Be especially mindful of your list when considering any bundle deals.
It is also easier to negotiate when you are dealing with specifics. Don’t hesitate to go into detail regarding specific WiFi needs. You can even include bandwidth used from past events. Be sure to bring meal propositions as well. Look through the venue’s menu for areas where expensive ingredients can be substituted for more common ones. You might also drive down costs by sharing a menu with a previous or co-existing event. By doing your research ahead of time you will make a good impression as one who is both knowledgeable and efficient.
Although few enjoy negotiating, it can be a valuable part of building healthy relationships with vendor-partners. By coming equipped with the essential knowledge you will show yourself to be competent as well as reasonable. You will not only lock in better prices for your event but establish a long-term relationship that will benefit your company for years to come.
Looking for an experienced meeting planner to set up your corporate meeting or event? Contact Gavel International for more information.
1 https://www.amexglobalbusinesstravel.com/content/uploads/2017/12/2018-Global-Meetings-Forecast-US.pdf, 23.
2 Ibid, 26.
4 https://www.amexglobalbusinesstravel.com/content/uploads/2017/12/2018-Global-Meetings-Forecast-US.pdf, 30.