NEMICE contract/negotiations session, part 3

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More from Tim Brown's negotiation session at NEMICE yesterday:

Variables that affect pricing include transient demand at the property, room-to-space ratio, group F&B, lead time, whether you're in high, low, or shoulder season, history, arrival/departure patterns, the potential for incremental revenue, and the total value of your business. Another factor is the potential for risk to the hotel, such as the likelihood you won't be able to fill your room block and the cancellation and attrition clauses in your contract.

Generally speaking, hotels like Sunday-Wednesday and Thursday-Sunday arrival/departure patterns, he said. "The pattern is very important--be sure to ask your salesperson what their patterns are." He also suggested that you add your square footage needs in your RFP where possible, and that you calculate the total financial contribution of your meeting will be for the hotel. "Calculate your average F&B for each function, room rates, spa usage--everything," he said.

Another tip was to not depend on your relationship with sales to fix problems after a contract is signed, such as asking after the fact if you can rebook another meeting to replace the one that just got cancelled, fixing an attrition problem by working out more F&B, etc. "That should all be in your contract, not handled after the fact," he said.

If you do have to cancel, be sure to have a sliding scale also in the contract, he said. "The further out you cancel, the less you pay because you give them more time to recoup their loss." He added that managed hotels really like to be able to rebook business within their fiscal time frame, since once that quarter's numbers are in, that's it as far as they're concerned. Business in the next cycle won't help this cycle's numbers.

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